ABSTRACT
This chapter considers the various forms privatization may take in the United States, namely, asset sales, contractual arrangements, and design-build-operate-transfer agreements. Privatization can involve a spectrum of arrangements between the private firms and public entities. In an asset sale, a government unit sells and thus divests itself of an asset to the private sector. A private firm then owns the facility or system. The private firms assumed ownership of the infrastructure and received licenses to run their respective systems for twenty-five years. Water storage, transmission, and distribution have the characteristics of a natural economic monopoly, particularly with respect to water capture and transportation. Water supplied to a locality by one firm generally entails lower costs than if supplied by more than one provider. Under the contractual model, infrastructure remains under public ownership, with some type of delegated management to a private firm.
