The ancient Romans were among the first advanced civilizations to understand the importance of public roads and other infrastructure. Modern civilization has come a long way from these early beginnings. From colossal bridges and tunnels to super highways and major hi-speed rails, the need for replacing outdated infrastructuresⁱ  – or creating entirely new ones – remains a continuing financial challenge for states and local governments.  Typically, the cost for these projects is substantial, ranging in the millions, and even billions, of dollars.  For most local governments who simply cannot afford to pay for or finance these costs, public-private partnerships are the only option.

While the concept of public-private partnerships is not new and has been used successfully for decades in the United States, new financial pressures on federal, state and local agencies have resulted in a renewed focus toward P3s as a means to reduce operating budgets by turning operations and maintenance responsibilities over to private companies.ⁱⁱ  However, attracting private equity to fund infrastructure projects still presents major challenges, particularly in regions where public-private partnerships have not gained acceptance due to the political climate or regulatory hurdles in these regions. Unfortunately, major public infrastructure projects such as tunnels, roads and bridges have seen only limited investment by private equity firms who are hesitant to invest due to political fears and the slower pace of completing governmental projects. "Any time you’re involving a governmental agency or authority, it can be much more difficult to complete the deal...There can be political issues, and things often just move a lot slower."ⁱⁱⁱ  Indeed, "[m]any people thought the Trump administration's push for U.S. infrastructure upgrades would open the floodgates for private equity firms to step in and help modernize the country’s infrastructure..."^iv  Contributing to the reluctance of these firms to get involved is the fact that some states lack any legislation governing public-private partnerships. As a result, these states are missing out on a golden opportunity to attract private equity as a means of funding sorely needed infrastructure improvements.

A majority of states, such as Florida, do have specific legislation addressing public-private partnerships.^v  In Florida, for instance, there is legislation covering public transportation^vi, turnpikes^vii, local transportation facilities^viii and expressway and bridge authorities^ix.  In fact, Florida has, in recent years, had some significant P3 projects, as have other states.   These "P3 friendly" states present the perfect environment for private investors who have the necessary capital and desire to partner with state and local governments. Investors can make a return on their capital, while the public benefits from improved or new infrastructure.  It’s potentially a "win-win" for both sides, and should prompt more states to follow in the footsteps of Florida and other states with P3 legislation. While road and bridge projects have been the most traditional applications of P3s in the past, some investors are predicting a broadening of the types of projects that will be funded via P3s, such as in the water and wastewater industries, and potentially in the university housing markets. Thus, moving forward, there should be more opportunities for government contractors in industries that have not traditionally used the P3 model.^xii

It bears noting that in 2017 the United States received a poor score (average D+) from the American Society of Civil Engineers (ASCE) in the following sixteen infrastructure categories: Aviation, Bridges, Dams, Drinking Water, Energy, Hazardous Waste, Inland Waterways, Levees, Ports, Public Parks and Recreation, Rail, Roads, Schools, Solid Waste, Transit, and Wastewater. [Source]  As noted by the ASCE, “Our nation is at a crossroads. Deteriorating infrastructure is impeding our ability to compete in the thriving global economy, and improvements are necessary to ensure our country is built for the future. While we have made some progress, reversing the trajectory after decades of underinvestment in our infrastructure requires transformative action from Congress, states, infrastructure owners, and the American people.” ⁱ[Source]        
ⁱⁱ[Source]
ⁱⁱⁱ[Source]    
^iv[Source]
^v As of January 2017, thirty-seven states have public-private partnerships. [Source]
^vi See Fla. Stat. § 334.30.
^vii See Fla. Stat. § 338.22, et seq.
^viii See Fla. Stat. § 343.875.
^xi See Fla. Stat. § 348.004.
^xExamples in Florida include the expansion of Interstate 595 by the Florida Department of Transportation [Source]; the construction of the Port of Miami tunnel by the Florida Department of Transportation, Miami-Dade County and the City of Miami [Source]; and the expansion of a waste water system in the keys owned by the Village of Islamorada [Source].
^xi Examples in other states include the Crescent Moon/Red Rock Crossing Recreation Area in Sedona, Arizona by the U.S. Forest Service; using private real estate for public schools in Arizona and North Carolina; Indiana’s public roadways covering a 157-mile stretch; the Illinois state lottery system; and high-speed fiber connections for residential and commercial customers in Seattle, Washington. [Source]
^xii [Source]