An Evaluation of Public-Private Partnerships for Water and Wastewater Systems

Public-private partnerships (PPPs) are one tool a municipality can use to become more efficient in running their water and wastewater operations. Under PPPs, the public partner owns the assets, controls the management of the assets, and establishes user rates. The private partner operates and maintains the facility under a contract with the public partner. The use of public-private partnerships for water and wastewater services in the United States has been both praised and challenged. However, until recently, neither point of view has been supported by quantitative data. In early 2005, The Water Partnership Council (WPC) undertook what may be the first-ever municipal survey to quantify the benefits of PPPs. The survey results are based on 31 interviews with representatives of public entities that contract the day-to-day management, operation, and maintenance of their water and/or wastewater facilities to a private partner—in whole or in part. The facilities serve populations ranging from 4,000 to 1.2 million. The total population covered by the surveyed partnerships is 4.7 million. The municipalities surveyed enter into public-private partnerships to save money, gain operating expertise, and improve compliance with environmental regulations. According to the survey results, municipal satisfaction with partnerships is high, employees are satisfied, and impacts on the environment, customers and the community are positive.