U.S. President Barack Obama's call for more public-private partnerships could be interpreted as a signal for companies to invest in deteriorating water and sewage infrastructure, according to Bloomberg.
Speaking in his State of the Union address, in which the president pledged to facilitate oil and gas drilling procedures, he also referred to the old U.S. water and sewage infrastructure that needs urgent repair work. He added that companies which invest in improvement of infrastructure would not just bring better ports, pipelines, roads and school systems but would also contribute jobs to the economy. The president proposed a "fix-it-first" program that would prioritize the most urgent repairs, as well as a "partnership to rebuild America" that would aim to attract investments in infrastructure improvement.
Even though water was not specifically mentioned in his speech, Obama mentioned public-private partnerships and this was quite clear, commented Michael Deane, executive director of the National Association of Water Companies. Some 85 percent of people living in the United States get their water from companies owned or run by the government and other public entities, and many of them are short of funds to repair and replace water and sewage systems, Deane said.
RELATED: Public or private, the question is: how to pay for it?
According to estimates made by Su Gao, a water analyst with Bloomberg New Energy Finance in New York, at least $1 trillion needs to be invested in water infrastructure in the United States by 2035. This is a sum of money that the majority of public utilities cannot afford and many of these systems are near the end of their planned lifetime, Gao said. There are many old and derelict pipes, which cannot be seen because they are located underground and people tend to ignore them. This is where public-private partnerships have a major role to play, as municipalities simply lack the money to take care of their sewage systems.
Cindy Wallis-Lage, president of the water division of engineering firm Black & Veatch Corporation, told Bloomberg that pipes and mains that are over a century old and are made of wood and ceramic should be regarded as a top priority for replacement and repair. Wallis-Lage commented that if a pipeline broke due to its age or a general poor condition, the implications could be very serious for a community as it would affect residents, businesses and traffic.
In response to Obama's speech, Colin Sabol, chief strategy officer for water company Xylem Inc, said that the president has brought the topic of infrastructure into the focus of attention and made it a key area for economic health and job creation. Sabol quoted figures from the Water Environment Federation, which estimated that some 28,500 jobs were created for every $1 billion invested in water infrastructure projects.
Other representatives of the U.S. water industry also expressed their satisfaction with President Obama's speech and found the call for more infrastructure investments encouraging, Bloomberg noted.