AWWA JAW18740

This article outlines and discusses the principal elements and keys to the success of privatization from the perspective of the professional engineer. Advantages of privatization discussed include raising capital, obtaining tax benefits, increasing efficiency, and reducing risk. Since loss of control can occur with privatization, six areas of control that should be evaluated in structuring a privatization agreement are outlined: level of service to be provided, future cost increases, environmental concerns, future transfer of ownership, procedures for resolving disagreements with the service party, and application of funding or funding assistance that might become available. Privatization project phases described include evaluation-conceptual, contracting, and monitoring phases. Alternate routes for entering into privatization agreements are addressed. A case study for privatization of a wastewater reclamation facility for the city of Chandler, Arizona, is presented. Includes table.