P3 Conference RecapMarch 03, 2015 | By Wayne O'Neill
I recently attended P3C: Public-Private Partnership Conference & Expo 2015 in Dallas and I came away with some real success stories – as well as a tiny bit of discouragement.
The success stories very much outweighed the discouragement, though, which is very exciting news for the U.S. economy.
The most encouraging thing I came away with is that here in the U.S. we’re finally wrapping our arms around the strategic impact of public-private structure as it has been used on a worldwide basis. Traditionally our American model has been a “design, build, lease-back” type of environment using bond financing as opposed to private equity financing. It’s great to see that shifting more toward the long-term partnership approach that the rest of the world has seen success from.
The second most encouraging thing from the conference was the long list of success stories. These success stories mostly hinged around higher education, healthcare and government (mostly city government), with the most compelling accounts coming out of higher education.
Six Florida universities were there talking about How do we change the game? They pointed out that instead of just looking for money, “owners of change” look for structure and ways to dovetail strategic intent in the way they are trying to leverage public/private finance. It was really refreshing. If you look at what’s happening with sophisticated groups like Meridiam or The Plenary Group, there is a fair amount of encouragement that P3 is really moving along in this country.
There was also a lot of discussion about P3 in government. I listened to compelling stories about Kansas City, Oklahoma City and Albuquerque using the P3 model to handle infrastructure and facilities needs.
This year was a bit different than in years past, in that really high-level folks – board members, chief executives and people from the financial, legal and international development community – came together and were talking about fixing things that had been broken for a long time. The fact is, we’ve just run out of cash to fix everything. The process we use to rebuild in this country needs to evolve.
On the negative side, I did notice a bit of infighting about how the projects should be handled. I was surprised when certain people said, “No, we can just go borrow money and we can get the same kind of quality to do all of this without thinking through the project as an asset.” I am still stunned by that. Of course, this is the traditional real-estate industry and old-fashioned project managers fighting back as this country changes tack. They want to keep doing things the way they always did them, but maybe in a shinier fashion.
The Bottom Line
Every year that I go to the P3 conference, I come away with inspiration and encouragement – and this year was no exception. The U.S. has come so far in utilizing public-private partnerships to come up with innovative means to deliver infrastructure to higher education, healthcare and government. We’ve still got some kinks to work through, but I predict that the opportunities these collaborations provide will continue to grow and expand.