Public-Private Partnerships Benefit the American Economy
In a recent op-ed posted on The Hill’s Congress blog, Christopher Lee and Sean Medcalf, managing partner and associate at PEGCC member firm Highstar Capital, tout the value of public private partnerships between local governments and the private sector to jumpstart critical infrastructure projects. Private sector partners, including private equity, bringing the expertise they rely on every day to the table, like innovative thinking, organizational expertise and value creation.
As Lee and Medcalf explain:
These Public-Private Partnerships, or P3’s, are not a privatization or sale. Instead, they are 20 to 50-year partnerships where the public sector contributes assets, such as a container terminal or an airport, and the private sector contributes investment capital to upgrade or enhance these assets. In a Public-Private Partnership, everyone benefits, especially taxpayers.
Lee and Medcalf highlight several examples of successful public-private partnerships, including a port expansion project in Baltimore, upgrading an international airport in Puerto Rico, and an ongoing project to upgrade infrastructure in the Port Authority of New York and New Jersey.
Our Project Service, LLC video case study (see the video below) tells a similar story of success. In December 2009, The Carlyle Group entered into a 35-year partnership with the State of Connecticut to renovate and operate 23 service areas along state highways. The project is expected to bring nearly $500 million in economic benefit to the State of Connecticut and will add roughly 250 new jobs.
Lee and Medcalf sum up their argument perfectly:
Public private partnerships improve our infrastructure, create jobs and enhance our global competitiveness without growing deficits, or placing a burden on taxpayers. They add up to a significant investment in America’s infrastructure and future, with ideas and impetus coming from the public sector and investment dollars coming from the private sector. It’s time for businesses to work with local governments and authorities to move America forward.
