GAI Senior Director Owen Beitsch, PhD, FAICP, CRE served as a contributing author for the recently published book, “PRIVATE FINANCING OF PUBLIC TRANSPORTATION INFRASTRUCTURE: Utilizing Public-Private Partnerships“ (Rowman & Littlefield). GAI sat down with Owen to find out more about the complicated, evolving world of Public-Private Partnerships (P3s) and how adopting best practices can lead to very successful outcomes.
Congrats on the recent book release! Please describe what the book covers and why it’s an important and timely read.
Owen: First and foremost, local governments can no longer assume the federal government will contribute substantial dollars to infrastructure projects: dependence on federal resources is no longer a strategy, but a wish. Yet despite the increased need to look outside of conventional channels to secure dollars, most governments (particularly small, local governments) are uninformed about available financing options, including the use of private dollars. A public entity partnering with a private entity needs certain guidelines and structure; for most local or state governments that have had exposure to P3s, it has been under the guise of a well-defined and common service (e.g., trash collection) or as small real estate project (e.g., a sale of property accomplished over a period of months).
This book offers some best practices and identifies the good and the bad that will come through complex P3s. It is widely believed the private sector is willing to participate in infrastructure investments because the profit opportunities are immense. But that is not the case, and governments interested in forming partnerships with private vendors need to understand the difficulties and challenges involved.
Who should read this book?
Owen: There are many stories about what to do rather than what not to do. This book delves into the subtleties of P3s and identifies the true sources of risk so they can be properly assigned to the partnering parties. Although focused on transportation ventures, the book’s elements are relevant to almost any venture combining public and private capital. However, not every project is suited to this kind of approach, so the book explores the means of evaluating different options. Perhaps the most intriguing aspect of the book is its discussion about the failures to link all planning and investments together to ensure joint success. Oftentimes state and local governments plan and implement on an ad hoc basis, and it is necessary to coordinate better to secure an investment.
How did you become involved with this book?
Owen: As an adjunct professor with the University of Central Florida’s planning program, I work with other faculty members engaged in ongoing research. The University’s mission is to pursue activities of immediate relevance to the nearby community and region. I am one of the few department members engaged as a full-time consultant outside the educational environment, and the other team members wanted to combine real life practice and academic experience. Of course, as a Director with GAI Consultants, Inc., the firm and I represent both public and private clients, which generally have differing views on this subject.
Can you provide more insight into the chapter you wrote, titled “Avoiding public private partnership failure: Linking transportation infrastructure with economic development”?
Owen: My chapter is focused on the need to coordinate plans at all levels with the financing efforts targeted by public-private ventures. By discussing a number of notable failures, I hope to call attention to the importance of linking long-term plans and actions. There are several case studies provided, and taken together, they begin to form the basis of a checklist. The experience in Florida is discussed in passing because the state has adopted legislation forcing coordination to occur. Readers can download an excerpt from this chapter here.
What do you hope people take away from reading this book?
Owen: That infrastructure projects enabled with private capital are complex undertakings and are not suitable for every initiative. Officials need to think through their goals and make sure a P3 is a good fit. However, once there is a commitment to pursue a public-private vehicle, a range of decisions—occurring at all levels of state and local government—will have a bearing on its relative success. These are not decisions exclusively about the critical path followed for construction. Rather, the decisions involve broad strategic thinking about a range of policy matters. In that context, the targeted project is only one element in a fuller and richer agenda. The more attention given to these details, the greater the likelihood of securing an engaged private partner and the greater the likelihood the project will achieve its intended objectives.
GAI’s staff works with local governments and institutions across the country to identify enhanced funding options and opportunities for their programs. Be sure to check out more information about P3s in the P3: Road to Recovery article. For more advice on P3s, special assessments, economic planning, and/or infrastructure investment, contact Owen Beitsch, PhD, FAICP, CRE at 407.423.8398.
