Should the Feds Have a Unit to Support Public-Private Partnerships?

Should the Feds Have a Unit to Support Public-Private Partnerships?

Would guidance from Washington help cities use public-private partnerships more effectively?

Brooklyn Bridge Park is being built through a public-private partnership. Photo by dream4akeem Flickr

Among the first six policy proposals released this week as part of the Brookings Institution’s series on reviving metro economies, one of the more interesting calls for the federal government to establish a national unit supporting public-private partnerships.

Local governments have increasingly turned to public-private partnerships — known to wonks as “PPPs” — in search of funding for development and infrastructure projects. Some observers credit PPPs, for instance, with landing the resources needed to build and maintain parks in Boston and New York.

But drawing up a contract between a city and private funders can be complicated and, in some cases, politically unpalatable (New York’s PPP-backed Brooklyn Bridge Park faced criticism and even lawsuits over its funding source). So Brookings senior fellow Robert Puentes recommends that the feds create a unit specifically to help municipalities along with the process.

The hypothetical PPP unit, mostly likely serving as an arm of the U.S. Office of Management and Budget, wouldn’t choose specific projects for municipalities to take on, but instead give assistance to identify good investments, sort out priorities, hammer out deals and see contracts through.

Such governmental organizations already exist, in various forms, in Italy, the United Kingdom and the Philippines, among other countries, the World Bank noted in a 2006 report.

“We hear over and over again that there is not enough capacity and expertise to get these complicated deals done,” Puentes explains in an email. “So the idea is that a sophisticated, efficient federal unit could provide that advice and technical assistance on a voluntary basis.”

The budget for such a unit wouldn’t exceed $3 million a year, Puentes estimates, and furthermore would encourage a nationwide strategy infrastructure development. In an era when, say, state governors are rejecting federal dollars for light rail projects, shifting some responsibility onto the private sector is one way to get big-government skeptics on board with infrastructure investment.

“We can’t spend anymore time handwringing and lamenting our lack of attention to infrastructure,” Puentes writes in the email. “We need to fix what’s broken and get new things built. A PPP unit is by no means a silver bullet but is one necessary component.”

Tags: infrastructureeconomic developmentwashington dcparkspublic-private partnerships

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