Myth

Fact

Since water is a basic human need, water and
wastewater services should not be provided by
a private, profit-making entity.

The public partner retains responsibility for
safe drinking water and adequate wastewater
treatment but fulfills that responsibility through
a partnership.

Since corporations care more about profits than
about the public interest, partnerships usually
result in decreased environmental performance.

Many communities enter into partnerships to
remedy chronic non-compliance with
environmental regulations.

Public-private partnerships invariably lead to
rate increases.

The public partner retains responsibility for
setting rates, and future rate increases can be
minimized because the private partner
guarantees cost savings.

Massive layoffs often follow in the wake of
public-private partnerships.

Public-private partnerships protect jobs of
existing employees.

Impacts on labor are always negative.

Transition from public to private employment
usually increases opportunities for training,
continuing education, and career advancement.

At times, service and water quality are put at
risk due to understaffing.

Most contracts require the private partner to
meet or exceed levels of service and quality of
water and wastewater set by the public partner.
The private partner also must comply with any
state-mandated staffing requirements.

Checks and balances are missing at every step
in the process, from bidding to service delivery.

Most communities solicit input from all
stakeholders when they form a partnership, and
the partnership contract provides for continual
community oversight.

The private partner gets exclusive distribution
rights for 20 years or more.

The private partner rarely has any rights to the
water or its distribution.

Once a water or wastewater system is handed
over to a private partner, withdrawing from the
agreement borders on the impossible.

Most partnership contracts allow the public
partner to resume operations at any time.
Mechanisms are both legal and practical.

Even if the private partner does not fulfill its
contract obligation, proving breach of contract
is a difficult and costly ordeal.

Most contracts include two termination clauses.
Breach of contract (termination for cause) is
one, and termination for convenience without
any stated cause.

Public-private partnerships are the same as
privatization.

Although the terms public-private partnership
and privatization are often used
interchangeably, they are not the same.
Privatization involves the sale or transfer of
ownership of public assets to the private sector.
In sharp contrast, under all public-private
partnerships, the public partner owns the assets,
controls the management of the assets and
establishes user rates.

Very little can be done to ensure that the
private partner will work in the best interests of
the community.

The performance measures specified in the
contract actually provide the municipality with
more control than it has over public operations.

The private partner will pay higher interest
rates for capital improvements than the public
partner. The higher interest costs will be passed
on to the rate payers.

Because the public partner retains ownership of
the assets, it has access to tax-free and low
interest financing.

Since private firms care only about making
money, the private partner may decide to
export water to areas willing to pay more.

The municipality always owns and controls the
water.

The private partner may take too much water
resulting in ecological imbalance and
destruction.

The municipality monitors and regulates water
extraction.