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Public-Private Partnerships (P3s) Continue to Gain Momentum

Eric Singer & Albert E. Dotson, Jr.

Although the public-private partnership (P3) model was used to provide most public infrastructure and services until the early 20th Century, for the past several decades, P3s were few and far between in this country. Recently, three factors have contributed to a renewed interest in the public-private model: (1) aging infrastructure that needs to be replaced; (2) diminished public funds that cannot alone finance the needed improvements; and (3) growing P3 success stories throughout the world, particularly in Canada and Europe. However, in part due to the dearth of recent, local P3 experience, government agencies in the U.S. have opted for a toe-in-the-water approach to P3s.

Yet, more and more agencies are proving that the waters are fine, and with each successful P3, willingness to employ the model continues to grow. Significantly, we are now at the point where some of the early “new” P3s have already been substantially completed, and the results are impressive. Twenty years ago, the Department of Defense initiated the Military Housing Privatization Initiative, which utilized a P3 approach to build, operate, and maintain military housing, and that program is now widely accepted as a major success, with hundreds of thousands of high-quality units having been delivered at a lower cost and in less time than under the traditional model. Based on that success, DOD is now considering more P3s to provide a wider variety of facilities and services.

Similarly, with the continued success of the Eagle light rail P3 in Denver, which opened for operations this summer, more and more state and local governments are now pursuing rail and transit P3s throughout the country. These projects include a P3 train station for PennDOT, a high-speed line connecting Dallas and Houston, and a plethora of potential light rail projects in Los Angeles County. Here in Miami, the Metropolitan Planning Organization recently adopted a plan to prioritize six major rapid-transit corridors throughout Miami-Dade County. Whereas mass-transit projects have in the past withered and died while awaiting for a sufficient allocation of public dollars, the P3 model could be employed to overcome budget shortfalls and move these important projects forward with haste.

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