The current trend toward privatizing public assets, such as municipal water systems or public highways, should be approached with great caution and deserves broader public understanding. Red flags should go up when Wall Street advisers representing billions of dollars in private equity money suggest that selling off public assets will fix all the problems facing politicians. Echoes of the expression "If it sounds too good to be true, it probably is" should come to the minds of the public and elected officials.

The trend began about a decade ago. In the 1990s, selling municipal water systems became a popular way for cash-strapped municipalities to put a pile of money in the bank and shift looming maintenance expenses and fee increases to someone else — someone who the voters could not hold accountable.

In the past few years, the newest asset class to experience a privatization frenzy is public highways. Chicago launched the movement in 2005 by selling a 99-year lease of the Chicago Skyway for $1.8 billion. In 2006, the state of Indiana sold a 75-year lease for the Indiana Toll Road for $3.8 billion.

And in recent months, Gov. EdRendell has promoted the idea of selling a long-term lease for the Pennsylvania Turnpike to raise billions of dollars needed to maintain the state's aging highways, bridges and public transit systems.

The next phase of privatizing public assets appears to be in electric utilities. In Texas, a major electric utility has been sold to private, foreign interests. And here in Western Pennsylvania, an Australian firm that is a pioneer in infrastructure buyouts is taking Duquesne Light Co. private.

Writing for Web-based MSN, columnist Jim Juback suggests that private equity firms are aggressively seeking electric utilities to buy — and that the results will be increased debt, less investment in infrastructure, huge profits for investors — and higher rates for consumers.

Jubak gets readers' attention by writing, "The last time Wall Street applied its best minds to the electric industry, they brought us Enron... brownouts, price-gouging in California, not to mention higher electric bills."

The trend is understandable. Buyout companies have billions of dollars of investment money looking for predictable returns that exceed profits from stocks and bonds. Utilities offer steady cash flow and, even better, captive audiences.

Jubak's conclusion: "This is bad, bad news for your utility bill in the short run. In the long run, it's even worse."

In evaluating these deals, people need to remind themselves that private investors buying the local water company, the turnpike lease or the electric utility are motivated by profits — nothing else. These typically international funds are not looking to help out local water customers or state taxpayers faced with massive bills to maintain roads and bridges.

Buyout funds are the latest craze on WallStreet, and their pitchmen are promising massive profits to their investors. Those profits will come from water customers, highway toll-payers and electric customers.

In each case, customers don't really have alternatives if they don't like the service or the prices. They have to keep paying, and investors love the locked-in customer base.

A financial analysis by Merrill Lynch & Co. suggests that the investors in the Indiana Toll Road could break even in 15 years, with the remaining 60 years in the lease left to make more than $20 billion in profits. It appears Indiana sold for too low a price.

The question has to be asked: If private companies can make so much money from these assets, why can't government or quasi-public entities?

Some financial experts believe that they can. And in the case of Chicago's Skyway, Dennis Enright, founder of NWFinancial, suggests Chicago could have done a deal itself by raising tolls and selling tax- exempt bonds. In that case, benefits and profits would have returned to Chicago and the Skyway, rather than global investors and investment bankers.

The warning signs already are on the horizon. In some American cities, officials are trying to buy back the water company that was privatized several years earlier. In other cities, citizens are actively fighting to prevent privatization from occurring in the first place.

Even before the idea of selling a long-term lease for the Pennsylvania Turnpike is fully debated, there is another privatization deal in the works: Duquesne Light Co., Pittsburgh's electric utility, is scheduled to be acquired by an Australian-led group for $1.6 billion.

The Pennsylvania Public Utility Commission already has given its approval for the Duquesne Light deal. But opponents of the deal raise important questions as to whose interests the newly acquired company will serve — electric customers or international investors?

The more these privatization deals are examined, the more it must be understood that the ultimate motive for buyout investors is profits, and that will mean higher prices for consumers.

Despite the allure to politicians of a big upfront payment, it's not clear how most of these buyouts can be in the public interest.