P3s Help Expedite Infrastructure Projects
We have recently written about P3s being used in South Florida to construct large-scale public facilities on an expedited basis and at a reduced cost to the public. Examples include the Miami Beach Convention Center and the PortMiami Tunnel. In many ways, these projects, as immense as they are, represent the low-hanging fruit of P3s. In an era marked by the need for updated infrastructure to compete in a global economy, combined with dwindling public budgets, P3s have become the go-to solution for infrastructure projects that need to be completed as soon as possible.
The Future of P3s
A public-private partnership, however, is a broad term used to describe an infinite number of potential structures that can be adjusted to fit nearly any situation. To be sure, we are likely to continue to see an increase in large-scale infrastructure PPPs in the coming years, as indicated in part by President Obama’s strong emphasis on improving and replacing infrastructure, including his recently proposed tax reforms to spur infrastructure investment. However, the next wave in P3s may focus on public facilities and services not typically associated with private-sector involvement.
A glimpse into what that future may look like can be found at the Miami International Airport (MIA)– and not in the construction of terminals and hotels, which epitomize the current trends in P3s–but in the customs line. Federal sequestration has resulted in reduced staffing for U.S. Customs and Border Patrol, and the consequences are experienced by anyone traveling internationally in or out of MIA. Fortunately, a new federal program permits Customs to enter into public-private partnerships to provide new or enhanced customs services (such as more customs agents). The structure is admittedly a simple one—the federal government provides more agents, and the private sector reimburses the federal government for its increased costs. However, the results speak for themselves (the Herald reported last week that Customs staffing will return to pre-sequestration levels through the program), and the fact that the government is looking to the private sector to assist with customs, which is not an area traditionally associated with private involvement, bodes well for the future expansion of P3s into new areas. The future is particularly bright in Miami-Dade County, which benefits both from new state legislation facilitating P3s and a County resolution directing the administration to identify new potential P3 projects.