P3 means that the public agency gets to develop land or build infrastructure even if they can’t raise the funds themselves. The private sector entity gets the benefit of low-cost land and/or buildings, and a break on the payment of taxes, fees or rent.
Manhattan Beach, CA (PRWEB) December 05, 2013
Still reeling from the recent economic crash and suffering through the slow and often non-existent recovery, many public agencies are turning to increasingly popular public-private partnerships (P3) in order to achieve infrastructure and redevelopment goals, despite a lack of bonding authority or sufficient tax revenues. But the rate of return on P3 investments can be disappointing for both the public agencies and the private sector companies without an experienced consultant to properly structure the deal, says respected P3 Consultant Maurice Robinson.
“P3 represents a great opportunity for both sides,” said Robinson. “The public agency gets to develop land or build infrastructure even if they can’t raise the funds themselves. The private sector entity gets the benefit of low-cost land and/or buildings, and a break on the payment of taxes, fees or rent. But if it is not structured correctly, getting the numbers to work is more difficult than in “normal” projects. Both parties need someone with experience to guide them in these deals, and that’s why I’ve committed myself to this invaluable service.”
Most public agencies already authorize P3 arrangements at the local level, and 24 states have considered legislation allowing them to fun large infrastructure projects. Such P3 arrangements were once almost exclusively for toll roads, where the investing private sector entity had the right to collect tolls on the road in exchange for building and maintaining the road. Increasingly, states are looking to P3 arrangements to fund new prisons, tunnels, and economic redevelopment plans.
“The key is obtaining the right amount of public financial assistance, and inserting it into the project at the right time,” added Robinson, “and structuring the deal so that the rate of return is enhanced. I’d hate to see anyone turn a win-win like a P3 into a losing venture because they lacked guidance.”