A one billion dollar investment in domestic water infrastructure would create 28, 500 jobs for Americans. Ninety eight percent of water infrastructure projects happen at the local level. So why aren’t more projects to improve these systems that affect the quality of domestic water sources being conducted?
Erika Berlinghof, Director of Government Relations at the National Association of Water Companies (NAWC) told WaterWideWeb, “Water infrastructure is the ‘out of sight’ and ‘out of mind infrastructure that no one wants to deal with.”
NAWC‘s Water is Your Business campaign started as an effort to raise awareness about the economic value of water. Investments in water infrastructure prevent major events such as pipes bursting in local communities. When pipes burst, small businesses have to shut down because they don’t have access to water after the incident.
“One reason why investments in water infrastructure aren’t happening is because local communities don’t appreciate this reinvestment,” continued Berlinghof. If the public is not interested in water infrastructure issues, engaging private sector constituents in the water dialogue needs to occur. Supplementing funds for water infrastructure projects by private investors can mitigate deficits in public spending and while increasing overall operational efficiency.
Leveraging public-private partnerships for water infrastructure improvement can be a symbiotic exchange between the two entities. Private sector investors will operate on budget in a timely manner while the public sector can provide oversight and engage the local community. Undoubtedly, oversight on such projects is a necessary component of protecting public interests with respect to water supply in the United States.
Involving private investors in such a project requires pricing water appropriately, a topic that is rather sensitive. To attract private investors, one must price water accurately in order to repay the debt to investors. Pricing water for scarcity is far off. Experts such as Piet Klop, Senior Fellow at the World Resources Institute, advocate for pricing the treatment and delivery of water. If water is priced, then it will increase efficiency by end users and attract investments in technology by the private sector.
“The challenge found right now is either political unwillingness to invest in infrastructure or there are some challenges to private capital,” concluded Berlinghof. Ultimately, promoting access to sustainable water sources is the first step toward interesting local communities in the need for additional investment in infrastructure.
Water policy is predominately controlled at the state level. Once local communities are informed about the impacts of faulty infrastructure, they can mobilize efforts for water policy. Investing in water infrastructure is investing in the public health of end users, promoting economic development of business owners, and will provide jobs for people in desperate need of them.
Topics about sustainable water resources and infrastructural development are typically associated with the struggle for clean water in developing countries. However, issues of water in the United States are politically sensitive and intricate as well.
The question that policy makers and local governments should ask themselves is, “Can we afford not to invest in water infrastructure?” After all, hospitals and small businesses in their jurisdiction will not to be able to function if pipes continue bursting and reliable sources of water are not provided. Then, the public outcry will resound and the policy makers will be anxious to act.
Should we wait on creating jobs for the American people, or potentially compromise the revenue generated by small businesses that fuel local communities, simply because our infrastructure needs to be updated? Or, will public-private partnerships be the answer to the lingering issue of domestic water management in the United States?
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I couldn’t agree more with the need for infrastructure investment. Pricing is indeed the issue because local governments are motivated to keep their rates low. I personally don’t think that private investment will help though because private equity and debt can only increase the cost of capital for local utilities without providing much in the way of actual value. Government utilities are already able to execute projects and they get private help doing it all the time with consulting engineers. Political will has to align with utility business needs and the ability for political leaders and utility managers to communicate the capital requirements of our systems is essential to addressing the funding gap.
Great input Jason! I think that’s a great point. Thank you for adding an additional angle to the discussion! WaterWideWeb would love to hear more about your thoughts on this!
Eryn-Ashlei Bailey
Editor