Public Private Partnerships(ppp)

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Public Private Partnerships:

Presented by Jerry Fay, PE Public Private Partnerships

Public Private Partnership FHWA Definition:

Public Private Partnership FHWA Definition A public-private partnership is a contractual agreement formed between public and private sector partners, which allows more private sector participation than is traditional.

Another Definition:

Another Definition A public-private partnership exists when public sector agencies (federal, state, or local) join with private sector entities (companies, foundations, academic institutions or citizens) and enter into a business relationship to attain a commonly shared goal that also achieves objectives of the individual partners.

Typical Uses:

Typical Uses Contracting with a private company to: Renovate Construct Operate Maintain And/or Manage A facility or system

History:

History Goes back to the earliest construction in the United States Used extensively in Europe and other countries Significant renewed interest in the 1980s FHWA Legislation, ISTEA (1991), SAFETEA-LU (2005)—SEP 15

Why:

Why Traditional funding sources are not keeping pace with infrastructure investment needs and the growing public demand for services.

Why:

Why In short, P3 is a tool that can help governments meet demands for the development of modern and efficient facilities, infrastructure and services while providing value for taxpayers .

Benefits:

Benefits Expedited project completion Project cost savings Improved quality Use of private resources Access to new sources of private capital

Four Basic Dimensions of P3:

Four Basic Dimensions of P3 Although each is unique, all P3’s include four basic characteristics: Shared goals Shared resources (time, money, expertise, people) Shared risks Shared benefits

Typical Funding Sources:

Typical Funding Sources Tolls Tax Increment Finance Fees Grants Loans Bonds Other Revenue Streams

Slide 11:

Getting Started How do you create one? How do you implement one? A Public entity’s perspective of finding and contracting with the best private sector partner.

Slide 12:

Two Major Steps Crafting the Partnership Implementing the Partnership IMPLEMENTATION CRAFT

Slide 13:

P3 Project Management IMPLEMENTATION CRAFT OPERATE IMPLEMENT PROCURE PLAN & TEST FEASIBILITY GENESIS

Slide 14:

1. Genesis 2. Feasibility 3. Plan & Test 4. Procure 5. Implement 6. Operations Six Distinct Phases

Slide 15:

1. Genesis 2. Feasibility 3. Plan & Test 4. Procure 5. Implement 6. Operations

Genesis:

Genesis What’s the need What’s driving the need, rationale Facility non-compliance, natural disaster, budget deficit Is there a need for a Public/Private Partnership? Preliminary Project Definition

Slide 17:

2. Feasibility 1. Genesis 3. Plan & Test 4. Procure 5. Implement 6. Operations

Feasibility:

Feasibility Is a Public/Private Partnership feasible, not only financially, but practically? Can it be done? Market Research Economic/Financial Analysis Program, Budget and Schedule Risk Analysis

Slide 19:

3. Plan & Test 1. Genesis 2. Feasibility 4. Procure 5. Implement 6. Operations

Plan and Test:

Plan and Test Final project definition What is the best way to complete the project? Has the plan been thoroughly tested to assess market demand, public and stakeholder feedback and economics?

Plan and Test:

Plan and Test Master Schedule/Budget Political Climate Any potential “fatal flaws” that could derail the project?

Slide 22:

4. Procure 1. Genesis 2. Feasibility 3. Plan & Test 5. Implement 6. Operations

Procurement and Contracting:

Procurement and Contracting How do you choose and contract with the best-value private partner? What’s the best delivery method? Design-Bid-Build Design-Build Finance-Design-Build What do current statutes allow?

Procurement and Contracting:

Procurement and Contracting Procurement Approach Sole Source, RFP, Low Bid Risk Allocation between Public and private Partners Structuring of Contract/Risks and Rewards

Slide 25:

5. Implement 1. Genesis 2. Feasibility 3. Plan & Test 4. Procure 6. Operations

Implement :

Implement Environmental Design Permitting Construction Commissioning and Administration

Slide 27:

5. Implement 1. Genesis 2. Feasibility 3. Plan & Test 4. Procure 6. Operations

Operate:

Operate Startup Monitoring Assessment Enhancement Contract Modifications Contract Renegotiations

Slide 29:

P3 Program Management Summary Risk Assessment/ Allocation Delivery Methodology Commercial Terms /Contract Principles Deal Structuring Concept Design/ Performance Specs Procurement Documents Vendor Pre- Qualification Vendor Proposal Evaluation Contract Negotiations Startup Monitoring Assessment Enhancement Contract Mods Contract Renegotiations Objectives Register Alternatives Index Prelim Schedule/ Budget Prelim Economic/ Financial Analysis Qualitative Analysis Fatal Flaw Analysis Process Map & Strategy Feasibility Report/ Project Approval Asset/System Evaluation Site Selection/ Analysis Environmental/ Permitting Analysis Final Project Definition Master Schedule/ Budget Political Climate Assessment Procurement Strategy Prelim Business Plan Public/Vendor Outreach & Stakeholder Consultation Business Plan Design Compliance Construction Oversight Commissioning Administration Prelim Project Definition Seed Funding OPERATE IMPLEMENT PROCURE PLAN & TEST FEASIBILITY GENESIS

Conclusion:

Conclusion Questions and Discussion