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.

Cindy Wallis-Lage, President of Black & Veatch’s water business, said there were two important keys to making a public-private partnership work. “First, it involves partnering with the right funds and the right professionals who know how to structure the partnership properly to the benefit of the public,” Wallis-Lage said.

The second key involves the allocation of funds.

“It is vital to have a good vision for how the municipality will allocate the money that is often provided up front as part of the partnership. Experience has shown this type of forward thinking to be essential for the long-term success,” she said.

“A PPP is a true partnership between the private and public sector, not an asset sale.”

Bruce Allender, Chief Operating Officer at iMG