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Recession whets US appetite for PPP

The recession has prompted US interest in Public-Private Partnerships (PPP), such as the Private Finance Initiative (PFI), a form of procurement the US has traditionally resisted.

According to research from Halcrow and McGraw-Hill Construction, 92% of experienced state and local officials are ‘interested’ in PPP, while 71% think PPP is just as or more attractive during the financial crisis.

“We are faced with a great opportunity—the opportunity to lead with new thinking regarding infrastructure funding, particularly through vehicles such as PPP,” said Halcrow’s North American president Michael Della Rocca.

“I fundamentally believe it is within our collective ability to redefine the funding, procurement, implementation, management and renewal of our infrastructure assets and provide a network that will make a genuinely positive difference to people’s lives and to the broader wealth of America.”

The report suggests that despite massive investment announced in infrastructure in the President Obama’s 2009 stimulus package - £33.2bn (US$50bn) for transportation alone.

According to the research: “This is only a fraction of the funding needed long-term. The U.S. is facing serious challenges as its roads, bridges and tunnels deteriorate.”

“In order to remain globally competitive and move our goods and services effectively, we need to be prioritizing the improvement of our infrastructure, and we need the financing to make that happen,” said Vice President at McGraw-Hill Construction, Harvey M. Bernstein.

“PPPs provide one option that can help fill this revenue gap, and state officials that are working with them are realizing the success they can offer. We think this new research helps move us toward a better, more informed conversation about innovative infrastructure financing options,” he said.

The survey quizzed state and local government officials in the U.S. about PPP. They found:

  • 92% of experienced state and local officials are “interested” in PPP.
  • 71% of state and local officials report that PPP is just as or more attractive in today’s economic crisis.
  • 70% of state and local officials know of PPP projects outside their states, indicating broad awareness, but
  • 61% have had no direct PPP experience and do not fully understand its terms or benefits.
  • Only 10% of state and local officials said they are not considering PPP, and
  • 75% of respondents are ambivalent—suggesting that education is the most important next step.

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