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Public-private partnerships: a critical piece of the water infrastructure puzzle

Michael Deane, National Association of Water Companies | May 17, 2016

Crumbling and deteriorating roads, bridges and railways are usually the things you hear about when it comes to our country’s infrastructure challenges.  It makes sense, considering we encounter these above-the-ground forms of infrastructure every day.  But it’s what we can’t see and only notice when something goes wrong that often goes overlooked – this nation’s out-of-date water infrastructure. With Infrastructure Week beginning on May 16, the opportunity arises to not only bring the issue of water infrastructure vulnerabilities to the surface, but also point to the role of public-private partnerships to help find, and fund, solutions. 

According to the U.S. Environmental Protection Agency (EPA), thousands of miles of water and wastewater pipes in the country need repair or replacement, many of which are well over 100 years old. So perhaps we shouldn’t be surprised that, according to the American Society of Civil Engineers (ASCE), about 240,000 water mains break every year.  Leaking pipes alone account for more than 7 billion gallons of water lost every day. 

The enormity of this challenge is seemingly overwhelming for many public utilities already stretched to repair systems when they fail, much less updating systems so they won’t.  The EPA estimates it will take $682 billion to rehabilitate the nation’s drinking water, wastewater and stormwater infrastructure. While there’s no dispute about the need to address the country’s failing water infrastructure, it’s these daunting price tags and the need to expedite the improvement projects that present the greater challenge. 

To help overcome this obstacle, in 2014 President Obama established the Build America Investment Initiative, a program designed to increase public-private partnerships to explore and identify innovative financing and management of 21st century infrastructure.  As part of the initiative, the Administration created the Water Infrastructure and Resiliency Finance Center at the EPA to help educate and advise municipalities on effectively accessing private capital and management into their local water infrastructure project to meet specific local needs.  This important resource gives cities and towns the information and tools to explore all opportunities for innovation in design, construction and operation. 

Although the Administration’s initiatives have put a spotlight on public-private partnerships, these partnerships are certainly nothing new. The private sector has helped solve infrastructure challenges for more than 200 years.  Today, there are more than 2,000 water facilities in American communities that operate as a public-private partnership.  There are many reasons why public-private partnerships are particularly vital to our nation’s water infrastructure.

Simply staying compliant with federal health and environmental standards within the Safe Drinking Water Act and the Clean Water Act require sustained investment, which can be a strain on some communities without the budget to make ongoing capital improvements in water and wastewater facilities. Access to capital from the private sector allows municipalities to accelerate the design, construction and operation of water treatment facilities and distribution systems.  

Public-private partnerships also provide communities with a broader base of expertise and new technologies. Private water companies offer a vast national network of experienced water utility water management professionals with extensive knowledge in solving infrastructure challenges. Many also invest heavily every year in research and development to advance water service innovation.  New innovations in water reuse, desalination and leak detection, to name a few, are helping solve water supply challenges across the country.

Perhaps the biggest endorsement for public-private partnerships comes from the cities and towns that rely on them. According to Public Works Financing’s 20th Annual Water Outsourcing Report (March 2016), nine out of 10 municipalities renew their contracts with private partners. These arrangements are a win-win for the community. They can retain ownership of their water systems, while the private company brings desperately-needed capital investment and technical expertise. Plus, public-private partnerships are highly flexible so that projects can be tailored to each community’s specific needs.

No resource is more critical than water and the infrastructure that delivers it.  We cannot exist without water systems that safely and reliably deliver water to our taps.  That’s why of all the infrastructure challenges this country faces, none is more important than a reliable water network that receives regular investment and is continually improved.  While roads, bridges and railways provide conveniences that help improve our lives and communities, without dependable water systems businesses are crippled, communities become paralyzed and, ultimately, life cannot be sustained. 

We can’t afford to wait as pipes continue to fail, and access to clean, safe water is threatened.  The private sector is a good partner primed to provide solutions, and ready to serve.