Evaluating risk allocation and project impacts of sustainability-oriented water public–private partnerships in Southern California: A comparative case analysis

Evgenia Nizkorodov

World Development, 2021, vol. 140, issue C

Abstract: For the last 30 years, California has struggled to manage its water effectively due to demographic pressure, declining financial and technical support at the state and federal level, climatic stress, and outdated water management systems. Public-private partnerships (PPPs) may be uniquely positioned address these challenges through the private partner’s ability to mobilize resources, provide technical expertise, and share project risks. Yet, studies suggest that the private partner’s goal of maximizing revenue can reduce the quality of service provision and can marginalize low income populations. This paper clarifies the role of the private sector in bolstering sustainability and resilience by examining 1) the distribution of risks between public and private partners and 2) the economic, political, environmental, and social impacts of these partnership arrangements. This exploratory qualitative study utilizes interviews, observations, shadowing, and document analysis to compare 10 public–private partnerships in Southern California. This study evaluates PPP projects across the three dimensions of sustainability, paying careful attention to distributional impacts and feedbacks between environmental and human systems. The findings suggest that when carefully managed, PPPs can result in environmentally beneficial projects that diversify local water resources and improve efficiency of water utility operations. However, sustainability-oriented PPPs face a tension between profitability and public welfare due to the divergent goals of public and private partners. A complex permitting process and evolving regulations exacerbate this tradeoff through cost overruns and project delays. Risks to the public partner and ratepayers can be reduced through mutual agreement of project goals and benefits, robust contract structure, and the inclusion of end-users and affected stakeholders in project design and implementation.

Keywords: Risk sharing; Water public–private partnerships (PPPs); Climate resilience and sustainability; Distributional impacts; Southern California; United States (search for similar items in EconPapers)
Date: 2021
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Citations: View citations in EconPapers (5)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:wdevel:v:140:y:2021:i:c:s0305750x20303594

DOI: 10.1016/j.worlddev.2020.105232

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