Full Description

Private sector financing may take several forms including privatization, lease purchase or developer contributions. In its broadest sense, privatization refers to private sector financing, construction ownership and/or operation of facilities that render service on behalf of a public agency. Lease purchasing offers municipal utilities a means of acquiring equipment and facilities in situations where the utility may be unable to proceed if it pursued a conventional financing approach. For many years the private sector has provided funds for main extensions through developer contributions and system development charges. However, the use of such charges is generally limited to only the portion of the improvements necessitated by growth. Improvements due to old age, obsolete technology, regulation, and general renewal and replacement are not funded by system development charges. Developer contributions and traditional public sector financing methods alone are insufficient to meet the growing need for capital improvements. While there remains a strong demand for traditional public sector financing, there are still a growing number of situations in which private sector financing may be preferable and where it will prove to be the best overall solution. In this paper the authors will identify those situations and explain the relative merits of public vs. private financing.

Product Details

Published: 01/01/1994 ISBN(s): 0898677769 Number of Pages: 12File Size: 1 file , 530 KB