Benefits to Public-Private Partnerships: Utilities Are Discovering Advantages
In many countries across the globe, various sectors – such as toll roads, parking garages and airports – have embraced the concept of public-private partnerships (PPPs) since it provides essential capital while meeting a public need. There are multiple public benefits for a government entity, such as a municipal water or wastewater department, to consider when forming a PPP, and utilities are increasingly discovering the advantages.
First, it is important to distinguish the difference between PPPs and outright privatization. Privatization implies selling the entire assets of a given entity. But in a PPP, the government entity can retain ownership of the assets (facilities, pipes, right-of-ways, pumps, etc.) and, depending on the agreed structure of the deal, can then turn over control of the assets to the private sector. This would include the operations, maintenance, capital delivery and investments associated with the assets.
While public-private partnerships in the water sector are very prevalent in some countries, they are a growing concept in the U.S., according to Bruce Allender, Chief Operating Officer at infraManagement Group (iMG), a wholly owned subsidiary of Black & Veatch.
“In the U.S. alone, there are nearly 200 investment funds that have been set up to focus solely on infrastructure. Significant funds are available.”
Karen Daniel, President of iMG and Chief Financial Officer for parent company Black & Veatch