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(Water) Public–Private Partnerships: The Economics
Debaere, Peter; Kapral, Andrew Technical Note GEM-0183 / Published December 14, 2020 / 5 pages.
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With frequent water main breaks, leaking pipes, and lead contamination, the water infrastructure of many countries is in bad shape, and improvements are urgent in light of climate change and increasing water stress. Discussion in recent years has focused on the role of private companies in a sector that has traditionally been in public hands. Since the privatization of the United Kingdom's water infrastructure in the late 1980s, a whole range of novel modes of cooperation have been identified, from 100% private to 100% public ownership. This note focuses on the economics of public-private partnerships (PPPs). PPPs offer a contractual approach to the delivery of infrastructure goods and services that are typically provided by the public sector or by heavily regulated private operators such as public utilities. They tend to involve relatively long-term contracts, in which the public sector shares some decision-making authority and property rights with private companies. This overlap of ownership and decision-making powers between the public authorities and private operators is both the appeal and the challenge of water PPPs.


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  • Overview

    With frequent water main breaks, leaking pipes, and lead contamination, the water infrastructure of many countries is in bad shape, and improvements are urgent in light of climate change and increasing water stress. Discussion in recent years has focused on the role of private companies in a sector that has traditionally been in public hands. Since the privatization of the United Kingdom's water infrastructure in the late 1980s, a whole range of novel modes of cooperation have been identified, from 100% private to 100% public ownership. This note focuses on the economics of public-private partnerships (PPPs). PPPs offer a contractual approach to the delivery of infrastructure goods and services that are typically provided by the public sector or by heavily regulated private operators such as public utilities. They tend to involve relatively long-term contracts, in which the public sector shares some decision-making authority and property rights with private companies. This overlap of ownership and decision-making powers between the public authorities and private operators is both the appeal and the challenge of water PPPs.

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