Water infrastructure in the United States needs an upgrade. The question is how will the needed projects be delivered.
Industry players say water infrastructure projects in the United States are ripe for the P3 model because of a highly fragmented market, tight municipal budgets, and the recognition that building and operating increasingly complex water projects is not an expertise of local governments.
There already have been a handful of recent deals where it has made sense. In late 2014 the Middletown Borough Authority in Pennsylvania agreed to a $250 million, 50-year concession of various water and sewer assets with United Water and KKR. The City of Rialto and Rialto Utility Authority in California signed a $172 million, 30-year operating, management and finance deal with water operator Veolia, private equity firm Table Rock Capital, and the labor union pension investor Ullico in 2013.
Other much larger water P3s are in early stages of the process. P