Infrastructure & Environment

Report: Keys to Successful Public-Private Partnerships

Flexibility, public engagement and predictability help attract outside money for infrastructure, experts say.
by | May 28, 2014
Onlookers take photos of one of the first trucks to drive through the new Port of Miami Tunnel.
Onlookers take photos of one of the first trucks to drive through the new Port of Miami Tunnel, which opened last week and was partially financed through a public-private partnership. AP/J Pat Carter

If there is any agreement in Washington about transportation funding these days, it is that any new federal funding will be hard to come by. That's why Congress and transportation experts are exploring how best to attract and use private money to pay for infrastructure projects.

A task force of the Eno Center for Transportation released a report last month looking at the nuts and bolts of making public-private partnerships (P3) succeed. Joshua Schank, the group's president and CEO, notes that the arrangements are not well-understood, even though they have been growing in popularity in recent years. "Many states still prohibit [public-private partnerships] and most others have little conception of how to manage one effectively in order to create benefits for both sides," he wrote in the report.

Thirty-three states, plus the District of Columbia, have laws authorizing public-private partnerships, but only 15 have closed deals using them. Eight states account for 75 percent of all P3 investments in the United States. Globally, only 9 percent of P3 money went to the U.S. between 1985 and 2014.

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But more mayors and state officials are taking a close look at private financing because they face so many budgetary pressures, says Patrick Sabol, a researcher with the Brookings Institution's Metropolitan Policy Program. Federal funds are up in the air, as Congress struggles to find money for roads and other infrastructure before designated transportation funds start running out this summer. Plus, many cities are hitting debt caps and struggling with pension obligations, Sabol notes.

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