Public–Private Partnerships and Their Application to US Drinking Water Systems

Abstract

It is estimated that there are more than 160,000 public drinking water systems in the United States (US), but most Americans receive their drinking water from one of the nation’s over 50,000 community water systems. Most large water systems are publically owned. Despite the US success in operating and managing water systems, many organizations have expressed concern over the state of the nation’s infrastructure in general and water supply in particular. The American Society of Civil Engineers (ASCE) has graded US drinking water infrastructure at D. Other organizations including the American Water Works Association (AWWA) and the USEPA have called for increased investment in drinking water infrastructure. Public–private partnerships (PPPs) have been suggested to improve drinking water infrastructure. A PPP is a long-term cooperative arrangement between two or more public and private sector organizations. An argument frequently expressed is that PPPs can provide superior access to capital for infrastructure investment. However, medium to large water utilities in the United States generally have access to the capital needed for investment in infrastructure. However, there are thousands of small water utilities that do have difficulty in acquiring capital for infrastructure investments. Therefore, exploring the use of public–private partnerships at the state and regional level and to use state level borrowing authority to assist in acquiring the capital needed to make these investments might be appropriate.