Initially, mid-2014, the general consensus was that Washington would not be playing a part in P3s (Public-Private Partnerships) for water infrastructure projects anytime soon.
Now, in June 2015, with a new federal loan program at his back, President Obama has proposed a budget for 2016 that includes strong support for P3s.
Canada has consistently been upheld as a role model for P3s with what the Canadian government calls, “the largest and longest infrastructure plan” in the nation’s history, and it’s hefty $1.25 billion committal of funds, which go toward a national portfolio of 20 public-private partnerships.
Wharton University, Pennsylvania reports:
“What is the bright idea out of Canada?” asked Richard Anderson, a senior advisor at the U.S. Conference of Mayors and managing director of the Mayors Water Council. “It’s opening up a closed procurement process by requiring local officials to do a lifecycle analysis.” While PPP Canada, the agency in charge of the program, cautioned that public-private partnerships are “not the right solution in every case,” the Canadian government has said these ventures are worth considering. It also said that PPP Canada has the expertise needed to help local officials conduct the “Value for Money“ analysis needed to determine if a P3 makes sense for a given project.
In its simplest form, a “Value for Money” analysis looks at the estimated lifecycle cost of a public infrastructure project in two ways, both as a public-private partnership and as a traditional publicly managed project. The P3 option is pursued only if it provides better value for the money over the lifetime of the project.”
While the U.S. is not going to walk the exact same road as Canada, Washington has begun to make its own way forward in P3 funding and practices, including removing barriers and setting up a 5-year pilot program designed to encourage private involvement in large public water and wastewater infrastructure programs.
Inframanage.com notes that looking for ‘value for money’ is at the heart of infrastructure asset management planning.
P3 funding and practices can be one of the tools used to deliver value for money in long term infrastructure asset management.
There are plenty of examples worldwide where P3 has been very successful in delivering the outcomes required. Equally, there are plenty of examples worldwide of P3 failures that have been very costly.
It is definitely a case of picking the right type and scale of the project for successful P3 engagement, and the Canadian methodology provides a good case study in how to analyze this.