July 2011, Vol. 66 No. 7


Public-private solutions proposed to repair decaying water infrastructure

In the keynote address to the 2011 Pennsylvania Infrastructure Summit, Pennsylvania American Water President Kathy L. Pape said recently that expecting government bailouts is not a realistic, long-term solution to fix aging water and wastewater systems, which require tens of billions of dollars of capital investment.

Instead, she proposed a number of public-private solutions to help tackle the costly infrastructure challenges facing many communities in the commonwealth and across the country.

In light of the massive federal debt and Pennsylvania facing a $4 billion budget deficit, Pape said adequate government funding is simply not available to replace aging pipeline, rehabilitate outdated treatment facilities or build new plants to comply with stricter water quality regulations. She noted that President Obama’s proposed 2012 budget slashed approximately $1 billion from the Environmental Protection Agency’s infrastructure funding.

“Looking to Washington or Harrisburg for a financial bailout is not the answer. The reality is that many communities are faced with tough decisions when it comes to investing limited dollars. Unfortunately, too many systems’ capital needs have been neglected over time, unless a federal or state grant is provided,” said Pape.

“We need to change this cycle of rewarding inefficiency, which leads to bad management practices,” she said. “Government grants typically give higher priority to systems under consent orders for noncompliance with environmental regulations, thereby rewarding poor performance.”

Appointed to the 2008 Governor’s Sustainable Water Infrastructure Task Force, Pape said the panel found that Pennsylvania’s water and wastewater systems need $36.5 billion for capital repairs and upgrades over the next 20 years. What’s more, Pennsylvania’s water and wastewater infrastructure earned a D-plus grade in the American Society of Civil Engineers 2010 report card.

Pennsylvania American Water provides water and wastewater services to approximately 2.2 million people in 36 counties across the commonwealth. To address aging infrastructure, Pape said the company invested approximately $200 million in 2010 alone for water system improvements, including the replacement of nearly 80 miles of water main. The company’s capital investments between 2005 and 2010 surpassed $1 billion.

She advocated public-private partnerships to address the lack of government funds for infrastructure improvements. Although approximately 85 percent of water systems are municipally owned, the private sector has a long-standing record of bringing much-needed capital, efficiencies and innovations to municipal partnerships.

The U.S. Environmental Protection Agency has reported that the nation’s water utilities need $335 billion in infrastructure investments over the next 20 years to replace aging water infrastructure and comply with stricter water quality standards.

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