2. Public Private Partnerships are also known as P3’S
A public-private partnership is a contractual agreement
formed between public and private sector partners, which
allows more private sector participation than is traditional.
3. Another Definition
P3’s
A public-private partnership exists when public sector
agencies (federal, state, or local) join with private sector
entities (companies, foundations, academic institutions or
developers) and enter into a business relationship to attain a
commonly shared goal that also achieves objectives of the
individual partners.
4. Typical Uses
Contracting with a private company to:
Renovate
Construct
Finance
Operate
Maintain
Manage
A facility, system, or for economic development
5. History
Goes back to the earliest construction in the
United States
Used extensively in Europe and other
countries
Significant renewed interest in the 1980s
FHWA Legislation, ISTEA (1991),
SAFETEA-LU (2005)—SEP 15
6. Why?
Traditional funding sources are not keeping
pace with infrastructure investment needs
and the growing public demand for services
like transportation and new water delivery
and waste water systems.
7. Why? Continued
In short, P3 is a tool that can help
governments meet demands for the
development of modern and efficient
facilities, infrastructure and services while
providing value for taxpayers..
9. 4 basic dimensions of P3’s
Although each is unique, all P3’s include four
basic characteristics:
Shared goals
Shared resources (time, money, expertise,
people)
Shared risks
Shared benefits
10. Why are States and Municipalities using P3’s
Changing economic conditions
Maxed out bond financing
Declining value of Credit Rating
Reluctance to increase taxes
Growing infrastructure needs
11. Old way of funding projects
Tolls
Tax Increment Finance
Fees
Grants
Loans
Bonds
Other Revenue Streams
12. Successful P3 projects by State DOT’s
There is no limit to the type or scope of a municipal project. Municipal
partnerships with third party operators are flourishing
13. General P3 Categories
“Greenfield” projects
Involve the development of new infrastructure. Design, Build, Finance, Operate, and
Maintain
“Brownfield” projects
Operate, maintain, preserve, or improve existing infrastructure. Generally limited to
long-term operations and maintenance contracts or lease concessions.
Blended “Greenfield- Brownfield” projects
Example: adding additional high-occupancy toll lanes to an existing highway to
increase capacity
14. Genesis
What’s the need
What’s driving the need, rationale
Facility non-compliance, natural disaster,
budget deficit, new facilities, crumbling
infrastructure, business development and
retention
Preliminary Project Definition
15. Getting Started with Reserve Capital Holdings, Ltd
How do you create a P3?
How do you implement one?
A Public entity’s opportunity in finding and
contracting with the best private sector
partners is right here.
16. 2 Major Steps
1. Crafting the Partnership
2. Implementing the Partnership
Crafting Implementation
19. So what are the benefits versus the way it has always
been done?
Access to private capital
Reduce costs borne by design and engineering
Accelerate project delivery
Shift project risk
Spur innovation
Provide for more efficient management
Utilize existing assets to reduce bonding capacity
Generate cash flow from new technology
Maintain your credit rating by reducing bond exposure
20. More benefits from private operators
Long-term concessions can improve asset
management-the same party that constructs
the project is responsible for long-term
operation. This creates incentives to build a
higher quality facility that is easier to
maintain.
21. P3 usage advantage
P3s can be valuable options for states
seeking innovative approaches and funding
to repair existing and build new infrastructure
projects. They are best suited to medium to
large scale projects that have ongoing
maintenance needs.
