Colorado Engineering. January 1987
by Dennis Polhill
The infrastructure Colorado’s Pubic Works is falling into increasing disrepair. There is a serious shortfall of money in the public sector to pay for replacement of aging utilities, public buildings, institutions and roadways. There is a movement in numerous other States for the privatization of these public works allowing private investment and operation of these facilities.
Yet Colorado lags far behind in this effort and as of yet has not ventured into this concept. How do you feel about privatization of public works and if in favor of it, what do you think needs to be done to encourage it?
The issue simply is “How best can various services be supplied.” If privatization offers the potential of greater efficiencies, then privatization is a service delivery option that must be looked into by public works managers. Privatization doesn’t mean government will go away. The only thing that changes is the way government conducts its business. When methods can be employed that offer greater efficiencies, more or better services can be provided and overall economic efficiency improves. Overall economic efficiency is what sets the limit on the standard of living that we all enjoy. None of us has anything to gain by encouraging anything but the highest level of efficiency.
Government works under a disadvantage. Inherent within government are various institutional mechanisms that are not conductive to decisive decision-making and operational efficiency. Government is full of people who are frustrated, because their full potential is underutilized.
- In 1974 Cornell University under an EPA Grant, performed an exhaustive comparison of private sector vs. public sector trash collection. For equivalent service public sector service delivery was 67% more expensive.
- Street lighting service is provided most efficiently when the capital facility is owned by government, but operation and maintenance is contracted.
- In California Proposition 13 forced government to be more aware of the “true” cost of doing business. Alternative delivery mechanisms are a way of life. Intergovernmental contracts are common. Most municipal engineering is contracted to consultants. In some cases the entire public works function is contracted to a management consultant who subcontracts the various functions. Contracting of Non-Public Works functions is occurring.
The challenge of the future is to manage public works more efficiently by exercising more creativity. One of our tools is privatization. Privatization must evolve, as we build a new body of professionals: the private sector public works managers. As much as government can benefit from private sector initiative, the concept of privatization of public works cannot succeed without the insights and experience of practicing public works managers. Thus, the private sector public works manager must evolve. He will be one who draws from both the public sector and private sector experience to insure that services are delivered efficiently and effectively.
Privatization has a place in the future of public works management. The sooner we recognize and acknowledge this, the sooner we can get on with the challenge of making things work better.