Legislation is necessary to enable PPPs because they typically require transacting a structured finance deal

Figure 3: Key features of PPP-enabling legislation by state

†Examples include calls for projects, competitive requests for proposal, qualifications review followed by an evaluation of proposer concepts, use of design-build, procurements based on financial terms such as return on equity rather than on price, long-term asset leases for some period of up to 60 years or longer from the time operations commence.

Source: PricewaterhouseCoopers analysis based on Federal Highway Administration and US Department of Transportation data 

70%

A 2009 study by the UK's National Audit Office found that nearly 70 percent of 114 PPPs were delivered on time. 

Meanwhile, President Barack Obama has proposed $4 billion in federal funding for a national infrastructure bank in his 2011 budget. For now, the US Department of Transportation's TIFIA (Transportation Infrastructure Finance and Innovation Act) has become a major source of loans and loan guarantees for transportation PPPs throughout the country since it took effect in 1998. If established, the infrastructure bank would be known as the National Infrastructure Innovation and Finance Fund and would serve a role similar to that of the European Investment Bank in the European Union, which jump-starts PPPs that are slow to get off the ground by kicking in seed money.8 Similarly, the Indian Infrastructure Finance Corporation Limited (IIFCL) bolsters PPPs at both the federal and state levels. For example, from July 2009 to December 2010, India's IIFCL expects to refinance 60 percent of commercial bank loans for PPPs in an effort to ease the liquidity crunch. The Indian government aims to increase investment in infrastructure to more than 9 percent of gross domestic product by 2014.9

Much of America's infrastructure certainly warrants immediate attention. The nation's infrastructure needs hit home in dramatic fashion in 2007, when a busy highway bridge in Minneapolis collapsed into the Mississippi River and cost 13 people their lives. Beyond such human tragedy, the cold statistics show America lagging other countries in infrastructure quality. In a 2009-10 report, the World Economic Forum rated the US at No. 8 in the quality of its overall infrastructure-behind such countries as Germany and France, where public-private partnerships are fairly commonplace.10 Similarly, the American Society of Civil Engineers gave US infrastructure a D grade in its 2009 report card and estimated that $2.2 trillion would be needed over five years to boost the grade to a B, only half of which is covered by budgeted spending.11 In fact, US infrastructure spending as a percentage of gross domestic product-2.4 percent-lags both Europe at 5 percent and China at 9 percent.12

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8    European Investment Bank, The EIB ' s Role In Public-Private Partnerships (PPPs), July 15, 2004.
9    PricewaterhouseCoopers, Budget 2009 Snapshot (India): Specific Proposals for the Road Sector, 2009.
10    World Economic Forum, The Global Competitiveness Report 2009-2010, September 2009.
11    American Society of Civil Engineers, Report Card for America ' s Infrastructure, 2009.
12   " The Cracks Are Showing, "  The Economist, June 28, 2008.