In the U.S., there will be an increase in operations and maintenance (O&M) outsourcing contracts. Counter-balancing this phenomenon, public sector entities will become more competitive. There will be negligible ownership or asset transfers. Public interest and the fragmented political process, in which the U.S. water system operates, will effectively curtail ownership transfers.
The market forces, as reflected in outsourcing and an increased efficiency of publicly-owned facilities, will drive the U.S. water industry toward a greater level of cost effectiveness. The end result will be for a significantly increased public-private sharing of production, transmission and distribution functions. Ownership per se is irrelevant in a model where resource use optimization is being pursued.
A public-private convergence model, as described above, and one which is evolving in the U.S. will serve a magnet for capital investments. Electric utilities, financial institutions, and a wide array of investors will find U.S. water an increasingly fertile field for investment.
It is unlikely that the U.S. will ever privatize along the UK lines of 1989. However, over time, the process of public-private risk and management sharing will blur. The result will be quite indistinguishable from a private sector model with public ownership. This process could be helped by a tax code with additional incentives, further federal and state budgetary constraints, and the development of a national policy that would implement privatization.
Conclusion 6-