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BPC Offers Important Tool to States for Infrastructure Projects

Thursday, December 17, 2015

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Washington, D.C. – Today, the Bipartisan Policy Center is releasing a model law that would authorize state agencies and local governments to enter into public-private partnerships (P3s) for infrastructure projects. This would allow the private sector to help provide long-term capital support to projects, while steadfastly protecting the public interest.

BPC believes private sector investment is key to providing the additional money needed for building and maintaining America’s roads, bridges, airports, and public transportation. However, public-private partnerships are currently limited due to the lack of state enabling legislation.

Currently, 33 states (along with the District of Columbia and Puerto Rico) have enacted some sort of public-private partnership enabling legislation—a patchwork of laws met with varying degrees of success and public support. This comprehensive model is based on a review of best practices nationwide and creates broad authority for states and localities to enter into public-private partnerships for all types of infrastructure through a process that encourages private sector involvement and protects the public interest.

The BPC model includes many provisions drawn from Virginia’s P3 law. “Virginia took an important step earlier this year by strengthening laws surrounding public-private partnerships to add increased transparency and accountability to the process,” said BPC Executive Council on Infrastructure member Eric Cantor, vice chairman and managing director of Moelis & Company. “We believe other states should follow Virginia’s example in working with the private sector to help address critical infrastructure needs.”

BPC has estimated a $1 trillion gap between the current pace of infrastructure funding and the nation’s needs.

“A failure to remedy this problem will continue to seriously undermine our economic competitiveness,” said BPC Executive Council on Infrastructure Co-Chair Doug Peterson, president and CEO of McGraw Hill Financial. “The next decade will be a critical time for infrastructure investment. Fortunately, states do not have to take on this challenge alone. The private sector can provide help, bringing innovative ideas and long-term capital support.”

BPC’s Model Law: 

Enables P3s for a wide range of projects. Allows for all government entities within a state that are authorized to develop and operate infrastructure projects to contract with private partners on a range of projects including roads, bridges, ports, and stormwater management.

Creates a state office dedicated to providing P3 expertise and assistance. This office would be a resource not only for state agencies and transportation departments, but for localities and counties that may be unfamiliar with alternative methods of procurement but interested in the benefits they could bring.

Standardizes and promotes best practices. The model is a template that should be customized to suit each state’s particular circumstances and needs. It creates a Guidelines Task Force with members representing all tiers of government within a state as well as public and private stakeholders. It is tasked with recommending the governing guidelines for solicitation, evaluation, award, and delivery of P3 projects.

Protects the public interest. Provides a process for public education and input into the development of P3 projects. The legislation requires an evaluation of the life-cycle costs and benefits of a potential P3 project. Before a contract is signed, there must be a finding of public interest and compatibility with regional plans to ensure that the public agency has fully assessed the costs and benefits of the P3 and disclosed that information to the public.