Photo by Joshua Brown is licensed under CC BY 2.0
“There’s just too many people.” That’s how British development expert Olivier Brousse describes Great Britain today. While his comments about overcrowded public transportation, bumper-to-bumper highway traffic and aging hospitals and schools make a good case for public-private partnerships (P3s) on that side of the world, they should be resonating in the United States and other countries as well.
Brousse says another 15 million residents are expected to be added in Britain over the next 15 years. And, his question is, “What are we going to do to house, transport and take care of those people?” Other nations around the world are asking that same question.
For years, the answer to that question for the Brits has involved the use of P3s.
Like Britain, the United States is experiencing rapid population growth in many areas of the country. Public school districts are passing bond issues to build new facilities or add on to existing ones. States are passing gas tax increases to bump up revenues to address traffic mitigation. Replacing aging water and wastewater facilities is driving up user fees.
Brousse, who has experience across the pond in numerous types of development projects, is quick to point out that the British invented the P3 during the industrial revolution and that few canals, railways or infrastructure would have been built in that country in the 19th century without them. Since that time, the United Kingdom has recorded more P3s than anywhere in the world.
The same financial tool that helped the UK build its way through the industrial revolution can also help the United States build its way into improved transportation infrastructure, more modern schools and hospitals and expanded water and wastewater facilities that take advantage of the latest technology. And, it all can be done with the risk and financial backing on the shoulders of the private sector.
To gain public acceptance, it is important to note that a P3 is not privatization, says Brousse, and the public must be educated regarding the benefits of delivery by a private firm of a project or service that has previously been the responsibility of the government. Among the many advantages is that while it can take government years to discuss, plan and deliver a project, a P3 follows a strict timeline and can generally deliver a project quicker than government. With current low interest rates, P3s can also be delivered at a lower cost.
In the United States, government entities taking on additional debt to finance much-needed public projects are drawing the ire of taxpayers. When P3s can help the public sector avoid increasing its long-term debt obligations by using private capital to finance projects, P3s become a viable and attractive alternative financing method.
It’s an alternative that’s been working for years for the Brits. What are we waiting for?
To find out how you can benefit from public-private partnerships, contact Strategic Partnerships, Inc. to get started.