To help foster a better understanding of this emerging delivery model, the Urban Land Institute (ULI) recently held a summit entitled “Public Private Partnerships: A Global Perspective.” In this moderated panel discussion, a group of experts including our own Ryan Brady provided a history of PPP from a macroeconomic perspective and compared the advantages and challenges presented by contemporary global models. The group also discussed funding options and alternative solutions, and illustrated the importance of deal structuring and risk through global case studies.
There is a growing appreciation for the Whole-Life Cost of assets coupled with limited public budgets and debt capacities has led many public agencies to consider PPPs, which when executed correctly can offer significant long term savings.
Ryan Brady, Faithful+Gould's Technical Director and Director of PPP Operations
Ryan, a technical director in the firm’s Phoenix office and director of PPP Operations in North America, said that PPPs have become more common in recent years as a way to support large-scale infrastructure projects. “There is a growing appreciation for the Whole-Life Cost of assets coupled with limited public budgets and debt capacities has led many public agencies to consider PPPs, which when executed correctly can offer significant long term savings.”
At this event, the panel discussed the types of projects that are particularly well-suited for PPP and the forms of PPP procurement that have emerged in the United States, compared to the international market. The group also discussed common PPP team structures and a variety of funding sources, such as federal, equity, capital markets and tax increment financing.
The consensus of the panel was that in the short to medium term, PPP would be most common in transportation projects at the city or county level. Social infrastructure (such as government buildings, schools, hospitals) have great potential but will likely lag as transportation projects are an easier sell in terms of public need. Real estate-centric deals such as mixed-use developments with public participation mostly limited to the use of special taxing districts or tax increment financing will continue to grow; however they do not represent significant long-term risk-sharing, which is the key to generating value for money.
We are a world-leading advisor in the PPP market. Our services include:
- Technical advisory to private developers and investors, including technical due diligence, commercial reviews, risk analysis and management, payment mechanism calibration and analysis, construction monitoring and operations monitoring
- Technical advisory to public agencies, including program management, procurement process creation and development, project prioritization and evaluation, procurement management and risk management
- Independent certifier services, including the necessary tracking and certification of project objectives on behalf of both the government agency and private developer
If you would like more information about our PPP offering, please contact Ryan Brady.