House P3 Panel’s Report Recommends Changes to Reduce Barriers to Public-Private Partnership

AASHTO Journal, 19 September 2014

A special House Transportation and Infrastructure panel released a report this week that makes several recommendations for breaking down barriers to public-private partnerships, as well as changes to federal programs that would make such agreements easier for state and local governments to consider.

The T&I Committee’s Panel on Public-Private Partnerships was established in January by Chairman Bill Shuster (R-Pennsylvania) and Ranking Member Nick Rahall (D-West Virginia) to examine current uses of P3s across the Committee’s jurisdiction – including all modes of transportation, public buildings, water, and maritime infrastructure.

“Billions of dollars of infrastructure needs in the U.S. are in search of funding, and well-executed public-private partnerships can enhance the delivery and management of infrastructure,” said Committee Vic Chairman John Duncan (R-Tennessee), who led the panel. “P3s cannot provide the sole solution to all of the Nation’s infrastructure needs, but they can offer significant benefits, particularly for high-cost, technically complex projects that otherwise may risk dying on the vine.”

The final report makes recommendations to grow public sector capacity to better structure agreements and ensure the needs of the public sector are adequately protected. It also proposes improvements to traditional procurement processes to ensure better outcomes for all projects. The report includes a series of recommendations for breaking down barriers to P3s, and changes to federal programs to allow for partnerships to be more easily considered by states and localities. The report also recommends steps to ensure transparency and accountability for P3s, which is critical to fostering public support for such complex agreements.

According to the report, a consistent theme identified during the panel’s two hearings and seven policy roundtables was that public-private partnerships are not a source of funding and should not be considered a solution to infrastructure funding challenges.

“P3s are a financing and procurement tool, which in certain circumstances can accelerate the delivery of high-cost, technically complex projects and leverage private sector resources and expertise while mitigating construction and/or operations risk for the public sector,” the report said. “However, regardless of the method of delivery or the source of financing, the cost of infrastructure projects are borne by the public – there is no free lunch. The Panel learned that a clear and transparent understanding of the relative costs and benefits of traditional and P3 project procurements to the public sector is a critical element to ensuring accountability.”

The Transportation and Infrastructure Committee will use the Panel’s recommendations as a resource when considering future legislation.

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