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Public-Private Partnerships Are the Future for Sustainable Infrastructure

Image credit: Tom Barrett

Veolia North America and the Wharton School’s Initiative for Global Environmental Leadership (IGEL) have released a report detailing the demonstrated success and future potential for public-private partnerships (P3s) to provide sustainable solutions for the nation’s infrastructure needs. The report highlights how the P3 framework can be applied to keep up with contemporary fiscal and climate concerns as the US braces for a $3.6 trillion bill for infrastructure upgrades.

In addition to traditional financial considerations, communities now require more sustainable infrastructure in the face of increasingly extreme weather and climate change. This includes utilities designed to support communities that face new economic, social and environmental challenges over time.

“The infrastructure challenges we face are well known,” said Joanne Spigonardo, senior associate director of business development at Wharton’s IGEL program. “But the focus seems to be exclusively on financial constraints. For infrastructure to be sustainable, we need to focus on the critical element of operational expertise. We are pleased to have partnered with Veolia North America, which has several operations underway demonstrating how valuable the P3 model can be for cities' long-term investment in solutions that reflect the realities of today's climate concerns.”

Cities worldwide are increasingly turning to private-sector partners for the long-term investment and operational expertise these new solutions demand. According to a 2016 PwC report, the “P3 pipeline now stretches across more than 20 states, including many that have never closed a public-private partnership transaction before.” A Harvard Kennedy School Review report counts 40 major P3 closed infrastructure transactions at a value of $39 billion in the U.S. between 2005 and 2014. The IGEL report recommends all states take advantage of the innovation and sustainable solutions P3s offer.

“With the number and size of P3s increasing each year and major infrastructure legislation anticipated on Capitol Hill, now is the time to focus on growth potential and expansion of such successful partnerships,” said John Gibson, EVP and COO of municipal and commercial businesses at Veolia North America. “Veolia and IGEL’s report offers three projects representative of the opportunities for P3s in the sustainable infrastructure industry.”

Innovation in Healthcare

In Canada, Montreal’s new $2 billion Centre Hospitalier de l’Université de Montreal (CHUM) has emerged as the largest healthcare project in North America. Merging three older hospitals, CHUM not only is able to provide integrated services to hundreds of thousands of patients, but includes a mandate to use at least 40 percent less energy than a baseline design, representing a more than 40,000-ton annual reduction in greenhouse gas emissions.

Preventing Wastewater from Going to Waste

In Honolulu, Hawaii, a state-of-the-art wastewater reclamation facility has reduced ocean pollution and increased the availability of drinking water, thanks to a 20-year, $140 million P3 agreement allowing the city to save up to $35 million over the course of the partnership. Water reuse projectss are becoming increasingly popular across the country as a way to mitigate the effects of drought and boost water suppliers in communities with limited access to freshwater.

Green Steam for Clean Energy

The third project, which is underway in Philadelphia, has seen new investment in combined heat and power or cogeneration provide the city with sustainable utility infrastructure since 2012. Today, this partnership provides electricity, “green steam” and now a new chilled water plant for the University of Pennsylvania - providing resiliency, saving money and reducing the school’s greenhouse gas emissions.


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