NAWC STUDY CONFIRMS PRIVATIZATION SUCCESS
NEW ORLEANS, June 11 /PRNewswire/ -- Today at the Annual Meeting of the United States Conference of Mayors, The National Association of Water Companies (NAWC) released a study which demonstrates that public-private partnerships between municipalities and private water utilities are overwhelmingly successful in addressing the problems most commonly faced by municipalities.
The independent study, entitled, "NAWC Privatization Study: A Survey of the Use of Public-Private Partnerships in the Drinking Water Utility Sector," was commissioned by the NAWC and authored by The Hudson Institute. The 58-page report examined public-private partnerships in the area of water and wastewater systems in 29 cities serving over 3 million customers throughout the United States.
"The NAWC has always believed that public-private partnerships offer an effective and efficient means to address the large number of issues facing municipal water providers," said Peter Cook, Executive Director of the NAWC. "The Hudson Institute Survey confirms the value of strategic alliances between municipalities and private water companies."
The study found that the most widespread problems faced by municipalities today include: insufficient capital to upgrade municipal water and wastewater facilities, increasing operating costs, non-compliance with federal drinking water standards, the looming threat of significant rate increases and the need to improve customer service. The study evaluated each of the 29 public-private partnerships including asset transfers (acquisitions), leases, operating and maintenance contracts, and specific service outsourcing contracts. Key findings of the report include:
-- Compliance with Safe Drinking Water Act (SDWA): Prior to entering into a public-private partnership, 41% (12) of the facilities surveyed were not in full compliance with the SDWA. One year after entering into a public-private partnership, all were in compliance with federal water standards. -- Capital Infusion: At 31% (9) of the facilities, municipal partners (private water and waste water companies) contributed $55.3 million in capital for new facilities and equipment upgrades. This capital infusion was exclusive of acquisition costs. For the nine facilities in the study that were acquired by a private water/wastewater company, municipalities received $537 million. For the six projects that entered into concession agreements, municipalities received $35 million in concession fees. -- Improved Efficiencies, Cost Savings & Rate Stabilization: 17% (5) of the facilities experienced a cost savings between 10% - 40%, avoiding large water rate increases to the consumers. -- Improved Customer Service: Investor owned utilities have been able to provide a higher level of customer service at a lower cost by integrating the customer service functions such as call-in centers, billing and collections into parent company systems.
The last 20 years have witnessed substantial growth in public-private water partnerships as a result of growing infrastructure investment requirements, shrinking local government financial resources, and regulatory compliance issues. The NAWC study serves as a valuable resource in providing state and local governments tangible research on the problems facing government owned water facilities and effective solutions provided by privatizing the system.
The Hudson Institute is an internationally recognized public policy research organization that forecasts trends and develops solutions for governments, businesses and the public. Founded in 1961 by the late Herman Kahn, the Indianapolis-based not-for-profit 501 (c) (3) organization has more than 70 researchers and employees at its eight offices worldwide.
The National Association of Water Companies (NAWC) is a nonprofit trade association that exclusively represents the private and investor-owned drinking water utility industry. NAWC's primary goal is to strengthen the industry through advocacy of public policy, regulatory and legislative issues that directly relate to the private and investor-owned water companies. NAWC represents over 320 companies in 42 states serving 21 million Americans and has a national office headquartered in Washington, D.C. as well as 12 state and regional chapters.
SOURCE United Water
CONTACT: Public Relations - Matthew J. Stanton, or Marie Ruzzo, both of The MWW Group, 201-507-9500, for United Water