May 19, 2015 Articles

Public-Private Partnerships

By John W. Ferrara

Public-private partnerships, referred to as P3s or PPP, originated decades ago in Europe and have existed in the United States since the 1990s. Their goal is to design, finance, build, manage, operate, and maintain assets that deliver services to the public and serve as an alternative to financing provided exclusively by the government. The belief that infrastructure could be provided at no cost to the public has long been abandoned, but this belief is often the starting point for many who are now being immersed in P3 as if it had just been invented. A P3 does not make funds suddenly appear or transfer the responsibility for payment away from our citizens. P3s will ideally enable the repair or new construction of assets and allow more consistent delivery of services, generally utilizing already existing tax revenue to pay for projects. The government in partnership with private expertise can deliver better services than the government alone. While the below discussion focuses on P3s that are created as a result of specific state legislation, there is, however, a plethora of "P3-like" work being done through nongovernmental agencies (NGOs) and without any government involvement. The various types of forms a P3 can take can get very complicated.

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