Why Public Private Partnerships (P3)?
"To provide the greatest efficiencies of both the Public Sector and the Private Sector for the greatest Public benefit"
The 3Es for p3
Expedite the contract award process for public projects
Expand the supply of public and public / private projects
Enhance project yields to public partners and private investors
Unlock the value of public assets;
unleash the capacity of Private sector
Challenges
Three challenges, chronic to U.S. based P3, must be overcome in order to realize a renewal of our National infrastructure.
- Chronic design and perpetual solicitation for contract awards compromise the public benefit. Unnecessarily complex procurement processes reduce the values of public assets. This ineffective process encourages reliance on public debt and is largely the source of uncertainty associated with final project approval.
Solution: Expedite contract awards with a streamlined approach and set project delivery for the near-term.
- Erratic deal flow is the result of the chronic design and lengthy procurement process. Each project is created in a silo and, as such, there exists no “portfolio” of P3 projects from which standardized due diligence can occur. A portfolio approach addresses the investment criteria of Infrastructure Funds, it motivates robust private investment and greatly assists the systematic delivery of multiple projects.
Solution: Expand the supply of public projects by addressing the investment criteria of Infrastructure Funds.
- Low project yield on U.S. based P3 inhibits investor enthusiasm and encourages reliance on public debt for project funding. Low yields encourage unnecessary project funding schemes that further diminish investor interest. These legacy formulations discourage private investment, prolong project delivery and are avoidable.
Solution: Enhance project yields by promoting revenue, not debt, as the source of funding.
A Unique Approach
Private Sector is no longer reduced to the role of a generic commodity; the overly prescriptive public bid process is abandoned. Public Asset Strategies avoids this conformity driven process that constricts private sector expertise. The Developer and the Funding source are allowed to scope project outcomes.
S.P.E. (special purpose entity) is no longer relegated to merely an accounting and compliance entity. Public Asset Strategies positions the S.P.E. to have an active role in the assemblage of assets. This maximizes distributions for the public benefit.
Public Sector is no longer a redundant project manager. Public Asset Strategies scales the public participation to integrate the delivery of societal goals to be funded from project revenue. Freedom from appropriations is the primary benefit of maximizing the value of these public assets.
Resolution
Purposeful integration of public assets and complimentary public projects unlocks value
Single solicitation with multiple development agreements locks in the criteria for investment funds
