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O P I N I O N
Public-private partnerships
A s our nation turns to the urgent need to repair, replace, and rebuild our aging infrastructure with limited government financial resources, more and more public agencies are turning to public-private partnerships as a possible solution. By understanding the various risks associated with P3s and taking appropriate steps to manage them, A/E firms can put themselves in advantageous positions.
for the upfront costs of construction, financing and maintaining the roadway over a period of years with a profit, through the collection of toll revenue. At the end of the contract period, the road is turned over to the public-sector owner. A/E FIRMS AND P3. In P3 projects, engineers can play more and more public agencies are turning to public-private partnerships as a possible solution.” “As our nation turns to the urgent need to repair, replace, and rebuild our aging infrastructure with limited government financial resources,
Though still in the early stages in the U.S., P3s are growing as a means of project delivery. So far, 33 states have enacted P3 facilitating legislation. Most of the projects to date have been highways, bridges, and tunnels with toll revenue used as the means of paying back the private investment. Generally, P3s use design-build as the project delivery method. Most include financing as well as post-construction operation and maintenance. For example, on a highway built through a design- build-finance-operate-maintain P3, all aspects of a project from financing through post-construction are transferred to a single private-sector partner or concessionaire. The concessionaire uses projected revenue streams, such as tolls, or pre-determined payments from the public owner, to obtain private financing. The concessionaire is compensated
Michael Herlihy GUEST SPEAKER
See MICHAEL HERLIHY, page 10
THE ZWEIG LETTER February 19, 2018, ISSUE 1236
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