P3s useful, but no “silver bullet”

According to a report from a U.S. House of Representatives panel, public-private partnerships (P3s) are a helpful method of maintaining U.S. infrastructure, but federal investment is still needed.

According to the committee, the Transportation and Infrastructure Committee’s Panel on Public-Private Partnerships was tasked by Committee Chairman U.S. Rep. Bill Shuster (R-Pa.) and Ranking Member U.S. Rep. Nick J. Rahall II (D-W. Va.) to examine the current use of P3s across the committee’s jurisdiction—all modes of transportation, public buildings, water and maritime infrastructure. The Committee Vice Chairman U.S. Rep. John J. Duncan Jr. (R-Tenn.) led the panel, with U.S. Rep. Michael Capuano (D-Mass.) serving as the ranking member.

“We know the private sector has significant interest in investing in U.S. infrastructure, but the challenge has been how to make sure our federal policies allow this potential to be responsibly unlocked while also protecting the public interest,” said Shuster. “Chairman Duncan and the P3 Panel have provided the committee with some worthwhile recommendations as we continue to develop legislation to help strengthen our Nation’s infrastructure and our economy.”

Rahall said while P3s are an important, limited option for certain projects, the report makes clear that they’re not a silver bullet. Continued federal investment in highway and transit is needed. Duncan said although P3s cannot provide the sole solution, they can offer “significant benefits,” particularly for expensive and complicated projects that otherwise might die on the vine. Capuano said although a “transparent and functioning” P3 can meet certain needs, federal investment is a key factor in a project’s success.

The National Association of Water Companies (NAWC) is pleased with the panel’s report.

“The report calls attention to the unique advantages and opportunities for public-private partnerships to accelerate investment and promote operational efficiency for water and wastewater infrastructure projects in the public sector,” said NAWC Executive Director Michael Deane.

The NAWC cited two P3s from the report, including a concession signed by the Bayonne Municipal Utilities Authority of Bayonne, N.J., with United Water and the investment firm KKR in which the private entity will invest $107 million and retire $130 million in debt and the partnership between Rialto, Calif., and Rialto Water Services LLC that will invest $41 million in capital improvements..

Deane said the private water sector can bring innovative solutions to complicated water and wastewater infrastructure challenges by collaborating with the public sector.

The full report can be found here.