The United States: The World’s Largest Emerging P3 Market
White Paper Summary
America’s economic strength is built upon a foundation of private infrastructure investment going back centuries. Some of the names are familiar: the Lancaster Turnpike, the Transcontinental Rail Road and the Golden Gate Bridge. These impressive domestic undertakings, financed with private equity, were the nation’s norm when forging its vital transportation infrastructure: ports, inland waterways, canals, rail lines, power grids and toll ways. As America’s economy grew, so too did the federal government. Ambitious federal programs such as the Eisenhower Interstate Highway System became the model for the latter half of the 1900s. Today however, severe economic downturn, taxpayer anger and a lack of political will have eroded support for large scale federal projects. Increasingly, state governments are responsible for financing the maintenance and expansion of their infrastructure. Therefore, states are returning to a traditional form of infrastructure delivery: private investment.
The tectonic plates necessary to recreate a robust, sustainable, market for public-private partnerships (P3s) are beginning to shift into place. Dilapidated infrastructure, significant budgetary shortcomings and growing political will among elected officials have created an emerging P3 market inside the United States. As communities attempt to confront current economic challenges, P3s are steadily becoming a viable delivery mechanism in the financing of civic projects, especially large, complex undertakings in the transportation sector. But this brings new challenges along with new opportunities.
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