Potential benefits of public-private partnerships to improve the efficiency of urban wastewater treatment

Shulei Cheng; Yu Yu; Fanxin Meng; Jiandong Chen; Yongtao Chen; Gengyuan Liu; Wei Fan

doi:10.1038/s41545-023-00232-2

Potential benefits of public-private partnerships to improve the efficiency of urban wastewater treatment

NPJ Clean Water. 2023;6(1):13. doi: 10.1038/s41545-023-00232-2. Epub 2023 Feb 20.

Authors

Shulei Cheng¹, Yu Yu¹, Fanxin Meng², Jiandong Chen¹, Yongtao Chen³, Gengyuan Liu², Wei Fan⁴

Affiliations

¹ School of Public Administration, Southwestern University of Finance and Economics, Chengdu, 611130 China.
² State Key Joint Laboratory of Environment Simulation and Pollution Control, School of Environment, Beijing Normal University, Beijing, 100875 China.
³ School of Finance, Southwestern University of Finance and Economics, Chengdu, 611130 China.
⁴ School of Economics, Southwestern University of Finance and Economics, Chengdu, 611130 China.

Abstract

For emerging economies lacking public budgets, continuous improvement of urban wastewater treatment efficiency (UWTE) requires effective government supervision of wastewater treatment infrastructures (WTIs) and participation of private capital seeking to profit-maximising. However, to what extent this public-private partnership (PPP) model, aimed at a reasonable sharing of benefit and risk, in delivering WTIs can improve the UWTE is unknown. We evaluated the impact of the PPP model on the UWTE by collecting data from 1303 urban wastewater treatment PPP projects in 283 prefecture-level cities in China from 2014 to 2019 and used data envelopment analysis and Tobit regression model. The UWTE was significantly higher in prefecture-level cities that introduced the PPP model in the construction and operation of WTIs, particularly those with a feasibility gap subsidy, competitive procurement, privatised operation, and non-demonstration. Moreover, the effects of PPPs on UWTE were limited by the economic development level, marketisation, and climatic conditions.

Keywords: Economics; Environmental sciences; Water resources.