Analysis of privatization of the Jacksonville MIlitary Complex's potable water distribution systems

Abstract

Privatization of Department of Defense utility systems has become a central issue. It is seen as a way to relieve the Services of their current burden of huge maintenance and repair backlogs for aging systems. This thesis performs an economic analysis to determine whether it is economically feasible to privatize the Jacksonville Military Complex's potable water distribution systems. To address this issue, current legislation affecting utilities privatization was studied. Interviews were conducted with representatives of the Army, Navy, and Air Force regarding their current utilities privatization efforts. A case study of NAVWEPSTA Earle was used to provide the framework in which the Jacksonville decision should be made. Data was gathered from NAS jacksonville, NAS Cecil Field, and NAVSTA Mayport to calculate their annual water consumptions and the current plant value of their water systems. The systems' current plant value was obtained from NAVFAC's P-164 and adjusted for accumulated depreciation to provide the net current cost of the systems. These figures were used to derive the net present value of both the status quo scenario and the privatization scenario. Based upon the net present value calculations, privatization of the systems is recommended.