The United States is poised to become the largest public-private partnership (P3) market in the world for infrastructure projects. The opportunity to rebuild crumbling American infrastructure and create first class assets is now.
After decades of underinvestment and an increasing population, today's infrastructure needs are large and continue to grow. Federal, state and local governments are finding it difficult to finance new projects on their own due to decreased tax revenue and shrinking budgets. These two factors have increased the political will and desire to seek alternatives to the traditional "design-bid-build" procurement methodology. Many states and the federal government agree the P3 model maximizes value for their constituents, delivers a lower total cost, and can be delivered quicker.
A confluence of factors, many of which are outlined in this paper, have created a robust and growing pipeline of good investment opportunities in the P3 infrastructure sector. I started an American Greenfield Infrastructure fund to address this need. I also partnered with other leading infrastructure companies to organize the Association for the Improvement of American Infrastructure (AIAI) to assist state legislatures in adopting policies that incentivize growth through P3's, and remove obstacles to these developments and promote more of these opportunities. 33 states have already passed some form of P3 legislation. It is clear the U.S. is moving in the right direction. The growing political will and continued success of this model should create a virtuous cycle to further accelerate P3 growth.
Investors are noticing these trends and are increasingly interested in the sector. Public owners looking to complete or begin new projects find this attractive because of the potential capital available. This convergence of trends has positioned the U.S. P3 market for robust development.
I have been involved with the North American infrastructure and construction sectors for over 30 years and have seen multiple growth cycles. The upcoming P3 boom should allow the U.S. market to learn from its own experience as well as other countries' to adapt a model that works best at home.
This white paper provides a good primer for those interested in learning about the history and current trends in the U.S. P3 market from many of the industry's key leaders. Additionally, this paper explains why all the P's in public-private partnerships are important for the structure. The public sector can stretch its investment for more new infrastructure; the private sector will utilize best practices to deliver this infrastructure more efficiently than traditional methods; and most importantly, each will need to work in partnership to ensure the best results for all stakeholders.
William A. Marino
Founder & Managing Partner,
Star America Infrastructure Fund