ABSTRACT
Providing safe, affordable drinking water as well as wastewater treatment services represents a necessary but costly endeavor, as these services often represent a key factor in a locality's economic and public health. Water and wastewater infrastructure in the United States is aging. Many US water and wastewater systems include infrastructure dating back to the early twentieth century. Agreement exists that the US water and wastewater infrastructure is in bad shape and getting worse. In 2001, the Environmental Protection Agency released a survey of the nation's drinking water infrastructure needs. For years, even in economic boom times, state and local governments were less than eager to pay for water and wastewater infrastructure development. Privatization provides a method of financing water supply and waste-water treatment infrastructure. Private operations are said to correlate with greater efficiency and effectiveness. Potential disadvantages of privatization include: workforce reductions, rate increases, service declines, loss of public control, contractor bankruptcy, xenophobia, and transaction costs.
