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Myth's and Facts

M: Since water is a basic human need, water and wastewater services should not be provided by a private, profit making entity.
F: The community retains responsibility for safe drinking water and adequate wastewater treatment but fulfills that responsibility through a partnership.

M: Public-private partnerships invariably lead to rate increases.
F: The community retains responsibility for setting rates, and future rate increases can be minimized because the private partner guarantees cost savings.

M: Massive layoffs often follow in the wake of public-private partnerships.
F: There is no evidence of this. Public-private partnerships protect jobs of existing employees.

M: Impacts on labor are always negative.
F: Transition from public to private employment usually increases opportunities for training, continuing education and career advancement.

M: At times, service and water quality are put at risk due to understaffing.
F: Most contracts require the private partner to meet or exceed levels of service and quality of water and wastewater set by the community.

M: Since corporations care more about profits than about the public interest, partnerships usually result in decreased environmental performance.
F: Many communities enter into partnerships to remedy chronic non-compliance with environmental regulations.

M: Checks and balances are missing at every step in the process, from bidding to service delivery.
F: Most communities solicit input from all stakeholders when they form a partnership and the partnership contract provides for continual community oversight.

M: The private partner gets exclusive water distribution rights for 20 years or more.
F: The private partner rarely has any rights to the water or its distribution.

M: Once a water or wastewater system is handed over to a private partner, withdrawing from the agreement borders on the impossible.
F: Most partnership contracts allow the community to resume operations at any time. Mechanisms are both legal and practical.

M: Even if the private partner does not fulfill its contract obligation, proving breach of contract is a difficult and costly ordeal.
F: Most contracts include two termination clauses. Breach of contract (termination for cause) is one, but the community can terminate for convenience at any time without any stated cause.

M: Very little can be done to ensure that the private partner will work in the best interests of the community.
F: The performance measures specified in the contract actually provide the community with more control than it currently has over public operations.

M: 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.
F: If the public partner has access to tax-free and low-interest financing, there would be no need for the private partner to fund capital improvements.

M: Since private firms care only about making money, the private partner may decide to export water to areas willing to pay more.
F: The municipality always owns and controls the water.

M: The private partner may take too much water resulting in ecological imbalance and destruction.
F: The municipality monitors and regulates water extraction.

 

Other Water Facts

 

 

 

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