Private Finance Crucial To Water Infrastructure Investments

With his latest commentary, In the Public Interest executive director Donald Cohen captures the activist solution to the water infrastructure crisis perfectly through the three illustrations he celebrates: taxes, taxes, and more taxes.

Seattle instituted an income tax for transit funding. Los Angeles instituted a sales tax to pay for highway improvements. And Indianapolis – you guessed it – raised taxes to fund busses and light rail.

We agree with Cohen that communities badly need to invest in infrastructure across the United States, including and especially water infrastructure. However, we disagree that raising taxes is the only solution, and we disagree that raising taxes is somehow “innovative” or “exciting” as Cohen states.

Cohen claims that, “Private financing does nothing to solve America’s infrastructure problem.” Since this is clearly not the case, to help him out we compiled a quick list of a few major water infrastructure projects that have been privately financed. There are many more.

  • In New Jersey, the Bayonne Municipal Utilities Authority (BMUA) began working with SUEZ North America in 2012 through an operations and investment agreement that will yield $107 million in new infrastructure for the water and wastewater systems and retire $140 million in debt. One of the results of this privately financed project has been the installation of a wireless water metering system that helps reduce water loss and improve efficiency.
  • In Rialto, California, Veolia North America is overseeing a $41 million investment in capital improvements while providing operations and maintenance expertise at the water and wastewater facilities. The capital projects that result from this private finance will create hundreds of good-paying construction jobs.
  • Pennsylvania American Water has made significant investments since acquiring the Coatesville water and wastewater systems in 2001. These investments include an approximately $24 million upgrade to the water treatment facility, in addition to building a $55 million sewer treatment facility to replace an antiquated plant dating to the 1930s with a history of environmental violations. Today, the company continues to invest in the Coatesville system to replace water and sewer infrastructure that had deteriorated from decades of neglect.

Hopefully this can help anti-private activists get beyond their ideological rhetoric and see what is really happening on the ground in cities and towns across America: infrastructure investments are happening because of private finance.


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