This content is from: Opinion

The Infrastructure Funding Gap and Public-Private Partnerships

Governments need additional sources of infrastructure funding but many of these governments (especially in the U.S.) aren’t yet on board with the whole public-private partnership concept.

The Global Projects Center at Stanford University (which I run) has just released a new working paper entitled “Public-Private Partnerships for Infrastructure Delivery” (for which I am one of five co-authors). It’s an attempt to develop a better understanding of the roles and responsibilities that private sector agents (e.g., investors, constructors, consultants, etc.) can play in the delivery of public infrastructure assets. To put it simply, governments need additional sources of infrastructure funding (something that some institutional investors would like to provide), but many of these governments (especially in the US) aren’t yet on board with the whole PPP concept. In this paper, we try to lay out the facts as we see them today; the pros and cons. Here’s a blurb:
Given the current state of infrastructure needs in the U.S., does it not make sense for the public sector to draw on all potential project delivery systems -- including public-private partnerships? Together, the public and private sectors can provide the best services to meet the growing needs of U.S. infrastructure -- with the private sector often tapped for its potential to deliver value and innovation. This does not suggest that alternative delivery systems or public-private partnerships are the sole solution for resolving the challenges involved. The art for policymakers is to determine when and where public-private partnerships make sense, to develop procurement and other systems that balance the transfer of risk and reward to the private sector and, most importantly, to deliver value for the public’s money in the form of enhanced infrastructure services.

This paper’s objective is to help governments and policymakers better understand the role that the private sector can (and even should) play in the development of infrastructure assets. In other words, too many politicians have the wrong idea about PPPs. We try to show that PPPs do offer value for money... when they are used correctly.
Anyway, the paper is only 20 pages (with 80 pages of appendices for the masochistic among you). Enjoy.

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