- Mar 12, 2019
As the U.S. Public-Private Partnerships (P3s) market advances, public and private participants alike face a unique set of opportunities and challenges. In 2018, certain P3 sectors – including transportation and utility infrastructure – scaled quickly, while others, including social infrastructure, moved more deliberately. With the U.S. facing an increasing $4+ trillion infrastructure backlog and public or social capital becoming increasingly scarce, P3s have not been adopted as frequently in the U.S. as they have been in other countries.
Several panel discussions at the P3 conference last week included insights from investors, builders, operators, advisors and public partners who explored trends that underpinned past successes and candid discussion on obstacles they have faced. Gilbane is pleased to share the following insights from the conference to keep the momentum moving forward.
How to Define P3
Perhaps this is the one of the biggest challenges facing those trying to determine if P3 is the right solution for a particular challenge. The best advice: define the problem and associated assets to leverage such as land, real estate, buildings, etc. Determine the best possible outcomes. What level of investment and types of services will be required to realize the value of those assets? Seek consultation on what variation of a P3 contract between partnerships (public sector entities and private sector entities) will outline the provision of those assets and the delivery of services. Core services of a P3 may include a blend of development, funding, design-build, operate and maintain, etc. In other words, there is no one definition for P3. Clients have the opportunity to make their own definition within established guidelines and applicable laws.
Trends in P3 Opportunities
The types of infrastructure projects expected to make the most progress in 2019 are:
- Social infrastructure includes vertical projects that accommodate the provision of social services including universities, schools, community housing, courthouses, prisons, and other public buildings and venues.
- Transportation infrastructure such as roads, airports, ports, and railways. Transit-oriented design (TOD) incorporates vertical and horizontal project elements.
- Energy infrastructure including alternative energy, renewables, electricity, and gas.
- Utility infrastructure that includes both communications and water. Communications infrastructure may include broadband, mobile networks and telephone. Water infrastructure includes drinking water, sewer, storm water, and dams.
Anticipate Challenges by Leveraging Lessons Learned and Best Practices
Political obstacles seemed to be the overwhelming challenge discussed. Understanding risks, aligning decision-makers, and communicating schedule impacts were clear lessons learned that helped P3 projects move forward with an intentional sense of urgency. A leader who championed the public vision and managed expectations of stakeholders in the P3 partnership is a consistent best practice for successful project outcomes.
Learn more about Gilbane’s approach to P3 and view success stories in several different markets across the U.S. here: https://info.gilbaneco.com/p3.
Our experts welcome the opportunity to help you define how P3 can move your vision forward!