Growing use of public-private partnerships (PPPs)
Editor’s note: The following is the fifth of a six-part series on government budgets and government spending that comprise the Keating Report mid-year 2012 forecast. The topics we are covering include: federal fiscal trends, state finances, local government fiscal realities, public works and transportation construction, public-private partnerships and economy and government purchases.
“As the fiscal challenges continue at all levels of government, the months remaining in 2012 will continue to see an expansion in the use of public-private partnerships (PPPs),” says Richard Norment, executive director of the Arlington, Va.-based National Council for Public-Private Partnerships (NCPPP). “As public officials learn how to use evaluation tools like Value for Money (VfM), Public Sector Comparators and Full Life-Cycle Analysis, it will become increasingly apparent that private capital can be a cost-effective way to leverage the limited funds and other assets that the public sector has for addressing a growing range of infrastructure needs.”
Government officials can find the tools that Norment describes at the NCPPP website. By using the search tool in the upper left of the NCPPP home page, users can find guidelines and references on how to conduct a VfM and other analyses, Norment says. NCPPP is a non-profit, non-partisan organization founded in 1985 with public- and private sector members.
Increasingly, local governments are looking to the private sector for investment and innovation as they deal with growing and persistent budget deficits, says Mark Talbot, group president, Americas Local Government at Norwalk, Conn.-based Xerox. “From innovative traffic congestion management programs in Los Angeles to intelligent public transit solutions in southeastern Pennsylvania, government agencies recognize they need to do more with less, and the private sector has the resources and capability to bring these solutions to their constituents quickly and efficiently,” Talbot told GPN.
Public-private partnerships have helped governments successfully meet their needs to continue capital-intensive projects by sharing the costs and the revenues with private investors, says Dona Storey, an advisor on procurement at New York-based American Express OPEN. One of the better-known examples, Storey says, is Virginia Beach, Va., “which built a public parking garage next to a hotel built by a private developer. The parking garage is used by hotel guests and provides badly needed parking to other visitors to the beachfront. The joint venture provides a service to the community, to the hotel visitors, and brings in revenues from hotel room tax, food tax and retail sales tax from the local small businesses.”
View additional installments of our second-half 2012 forecast as well as the January 2012 forecast.
