P3s can broaden municipal access to safe water and sanitation
Many communities, both in developing nations and the United States, face significant challenges in accessing safe, reliable water and sanitation services. Limited budgets and constrained financial resources can hinder the development and maintenance of critical water infrastructure. Public-Private Partnerships (P3s) offer a promising solution to overcome these obstacles and accelerate the delivery of essential water services.
Public-private partnerships are contractual agreements between a public entity and a private organization for the development of public infrastructure such as water and wastewater treatment plants. The parties combine resources, contribute key elements to the project, and share the risk. P3s offer numerous benefits to municipalities seeking to improve water infrastructure.
Accelerated Project Delivery
Partnering with a private company that specializes in water and wastewater treatment, and that understands the permitting requirements associated with water infrastructure projects, results in the project being completed more quickly than with conventional contracts. With Seven Seas Water Group’s Water-as-a-Service® contracts, everything from planning, design, and permitting to construction and commissioning, including ongoing operations and maintenance, is taken care of by a team of highly skilled water experts. That helps streamline the process and accelerate project delivery.
Reduced Costs
P3 agreements offer several financial advantages, but the primary benefit is that no upfront capital investment is required. This frees financial resources for use in other areas while still allowing municipalities with limited budgets to get the water infrastructure they need. Costs are kept relatively low because of the economy of scale as well as the streamlined planning process. Once the plant is up and running, operations and maintenance expenses, including staffing, are the responsibility of the private partner. This ensures there are no hidden expenses or unexpected costs, allowing municipalities to keep within their budget and still have a reliable and safely managed water treatment service.
Access to Private Sector Financing
P3 agreements give cash-strapped public entities access to private sector financing to fund infrastructure requirements. There are two types of financing models commonly used in P3 agreements: build-own-operate (BOO) and build-own-operate-transfer (BOOT). Under these agreements, Seven Seas shoulders the responsibility and expense of building, operating, and maintaining the plant, with the public entity paying an agreed amount according to the volume of water or wastewater treated.
Under either type of contract, Seven Seas builds, owns, and operates the plant. The difference between the two is that at the end of the contract term, a BOO contract can be renewed or terminated, while with a BOOT contract, ownership is transferred to the public entity. P3s can also be operated as concessions, where ownership remains with the public entity from the outset, with the private partner financing, building, and operating the plant on their behalf.
Enhanced Service Quality
P3s give public entities access not only to private sector financing, but also to private sector expertise, specialized knowledge, and innovation. With all steps of the process managed by a company that specializes in water and wastewater treatment, municipalities have peace of mind that water quality will meet the required safety, environmental, and regulatory standards. They will also be relieved of the burden of having to hire and train staff to operate the plant efficiently, allowing them to focus resources on other core responsibilities.
Shared Risk
With a private company taking responsibility for all tasks associated with project delivery, much of the risk is transferred to the private partner. The public entity only pays for the water they use.
Where access to safe water and sanitation remains a challenge, public-private partnerships offer an innovative approach to bridge the gap. By combining the expertise, resources, and innovation of private companies with the public sector’s commitment to community health and safety, P3s can accelerate project delivery and reduce costs while enhancing service quality and sharing risk. These partnerships can be used to finance new water infrastructure projects or to upgrade aging and outdated infrastructure to bring safe water and sanitation to all.
Don’t let outdated infrastructure hinder your community’s growth. Contact Seven Seas to explore innovative P3 solutions.
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Erik Arfalk is the Senior Vice President of Business Development at Seven Seas, specializing in innovative and sustainable water and wastewater solutions in the US and the Caribbean. Previously, he was the Chief Commercial Officer at Fluence Corporation, where he launched MABR. Erik has held leadership roles at Atlas Copco and GE in Europe and the US, starting his career in strategy consulting. He holds a Master's in Business Administration and Economics from Lund University, Sweden. Erik's passion for water solutions and his talent for building strategic partnerships have established him as a respected industry leader.