Panel Paper: Why Haven't Effective International Practices Transferred Into the US P3 Market?

Saturday, November 9, 2013 : 2:05 PM
3017 Monroe (Washington Marriott)

*Names in bold indicate Presenter

Michael Garvin and Edwin Gonzalez, Virginia Tech

Interest in PPPs in the United States remains strong, but the recent economic recession coupled with mixed programmatic and project outcomes has caused a pause in activity.  In short, the wave of PPPs that seemed inevitable roughly six years ago has not materialized.  While frustrating to some, this offers the United States the opportunity to carefully examine how these complex commercial, legal, and technical arrangements might be enhanced.  Notably, a number of practices that have proven effective in international settings have not taken hold domestically.  For instance, the least net present value of revenue (LNPVR) method for creating variable length concessions while mitigating a project’s revenue risk has been relatively successful in South America; yet, while this approach has been proposed for some projects in the US, it has yet to be implemented.  Similarly, minimum revenue guarantees are common elsewhere as are overarching procurement regulations and guidelines.  Both opportunities and barriers for such international practices are identified and discussed.  Input from a selected set of interviews with public and private sector representatives is provided, so that policy-makers and practitioners can better understand what keeps such practices from being implemented.