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P3 as a sustainable solution for the water sector in the United States

  • P3 as sustainable solution for the water sector in the United States

About the blog

Eva Arnaiz
Country Manager USA, Aqualia

Published in:

SWM Monthly  frontpage
ACCIONA
Idrica

Themes

Water is the foundation of life. It is a resource that we all need. Our rivers, lakes, and coasts must be protected because without water there is no life. In 2020, the planet has given us all a call, and we need to answer with more sustainable solutions, thinking in the long-term, focusing our efforts on the world we want to leave to our kids and being aware water is one of the key elements we need to look after.

Water consumption in the U.S. is the highest in the world with an average “family” consumption of more than 300 gallons (1,135 litres) per day, and each of the 50 states has its own regulation and licenses for water management. There are about 310 million people in the U.S. served by approximately 50,000 water utilities.  19% of them serve 93% of the total population while only 7% of the population is served by about 40,000 small or very small systems (<3,300 people served) that frequently lack both economies of scale and financial, managerial, and technical capacity; this can lead to problems to meet Safe Drinking Water Act standards.

In terms of wastewater, there are nearly 175 million people in the U.S. served by almost 16,000 wastewater systems, similarly dominated by small systems that make up 66% of wastewater facilities, while the majority of the served population (85%) is covered by large facilities (>10,000 people served). This makes a very fragmented and diverse water sector.

We must also consider the country's infrastructure is ageing, with an estimated national average age of water pipes of 45 years, many of them reaching their lifespan of 75 to 100 years, and an estimated demand for new sewerage systems and facilities that will grow more than 23% by 2032.

All of this should raise concerns for municipal water/wastewater infrastructure investment needs; however, the current amount of investment from the multiple State and Federal financing channels continues to fall short, leaving municipalities alone to tackle the problem (a current $81 billion funding gap).

Water consumption in the U.S. is the highest in the world with an average “family” consumption of more than 300 gallons per day

P3s (Public-Private Partnerships) and concessions are the perfect tools for closing the investment gap and providing long-term sustainable solutions. The private sector has the experience and expertise to help the public sector in many ways. P3s can improve efficiency, optimize O&M, reduce water losses (6 billion gallons/22,700 million litres of treated water lost every day), optimize metering, billing, customer service and communication, through technology and implementation of new management processes.

They can also provide fair value long-term and resilient solutions, not only focused on CAPEX but including OPEX and other environmental and social factors in any sustainable project. They can help consolidate systems and use the scale reduction factor. It is possible to go beyond the regulators and plan for the future, including innovation, awareness campaigns, and treating water as a resource. The circular economy can be introduced. Moreover, these solutions can provide the equity and finance needed to accomplish projects.

In addition, P3s provide other benefits: expedited procurement processes, optimized design and construction save time and money while providing a guaranteed water rate throughout the term of the contract. There are no budget surprises, with guaranteed quality compliance and peace of mind for citizens and administrators. There is also an intelligent allocation of risks to the party best able to handle them. For example, design, construction, financing, and O&M risks lie with the private expert while regulatory approvals risks remain in the public sector.

Ultimately, P3s enable the public sector to focus on its very core competencies. While the private sector focuses on its expert professional activity, the public sector can focus on administration and supervision. The time has come for a clear public-private partnership and Aqualia is ready to share its experience and to bring the circular economy to the water sector in the U.S.

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