What is a Public-Private Partnership?

A public-private partnership (P3) is a funding model for public infrastructure projects such as new airports, waste water treatment plants and new roadways.

The government at a local, state and/or national level make up a public partner. On the other hand, privately-owned business, public corporation or consortium of businesses with a specific area of expertise are what factor into a private partnership.

P3 arrangements are useful for large projects that require highly-skilled workers and a significant cash outlay to get started. They are also useful in countries that require the state to legally own any infrastructure that serves the public.

Different models of P3 funding are characterized by which partner is responsible for owning and maintaining assets at different stages of the project. Below are a couple of examples of types of projects that Terracare Associates has participated in some form:

Design-Build (DB)

The private-sector partner designs and builds the infrastructure to meet the public-sector partner’s specifications, often for a fixed price. The private-sector partner assumes all risk.

CentennialOperation & Maintenance Contract (O & M)

The private-sector partner, under contract, operates a publicly-owned asset for a specific period of time. The public partner retains ownership of the assets. Our partnership with CH2M-Hill and the City of Centennial Public works department, which just became the first accredited P3 of its time, is an example of this type of arrangement.

The primary value of the P3 model comes from delivering a needed project more efficiently and at less risk for the public entity.

Using Denver as an example, CDOT has been able to complete an expansion of Highway 36 between Boulder and the I-25 corridor using private sector funding in exchange for an arrangement on tolling fees. This model has proven itself successful enough that the same type of model is being used for the eventual I-70 expansion project.

Another large scale Denver area project is the connection of Denver International Airport to downtown Denver via a monorail going from the airport to downtown Denver. This project was started first by a public-private arrangement and finished through support by the federal government with large funding to finish the project.

Our P3 experts on staff at Terracare are available for a P3 consultation with your team throughout the United States. Contact us today for more information on this innovative approach to public works requirements.

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