Public-private partnerships: A new department of infrastructure?

With the urgent need for new and improved infrastructure, the U.S. needs to streamline procurement argue public-private partnerships specialists and authors of a new report* Samara Barend and Karl Reichelt

In response to the growing demand for improved infrastructure, many countries have found funding through public-private partnerships (P3) to deliver projects faster, smarter and better. In the U.S. could the solution lie in creating a NIFIO – a new National Infrastructure Finance & Innovation Office?

Sitting within the Treasury Department, this NIFIO could centralize and leverage federal infrastructure priorities, lending, and spending through a dedicated fund. In addition, it could be charged with streamlining regulations, working closely with Office of Management and Budget to ensure that interagency regulatory disputes are resolved quickly.

A P3 proposal

Similar to the public-private-partnership (P3) Canada Fund and Canadian Infrastructure Bank, NIFIO would also act as a center of expertise to structure and deliver projects in the most cost-efficient way, minimizing the tax dollars required.

Housing NIFIO within the Treasury Department would avoid creating a new bureaucracy. Further, while some responsibilities of this entity would need congressional approval, many could be undertaken immediately, and a general organizational structure could be enabled while awaiting legislative authority. It would be much easier to get specific authority granted to an existing entity than to have Congress enable a new agency.

Three Immediate actions of NIFIO:

• Development of a national P3 policy framework – a set of guidelines, similar to what has been done in Australia, that state and local governments accepting federal funds must consider before advancing a project delivery approach. As part of the implementation of this P3 policy framework NIFIO could leverage the $2.8 billion in U.S. Department of Transportation discretionary spending available until 2020. NIFIO could be responsible for overseeing this funding and ensuring it is properly used.
• Before federal funding is granted, it should require agencies, states, counties, and cities do a value-for-money analysis of all projects over $100M to determine suitability for P3. NIFIO would also provide a pool of funding to help states and localities develop P3 projects
• Work closely with federal agencies, governors and industry partners to identify a prioritized list of critical infrastructure projects that could be fast tracked with private investment.

*Exploring the realm of private finance and speeding procurement is a new publication entitled ‘Public -private partnerships: fast tracking infrastructure with innovation’ by Karl Reichelt and Samara Barend. To download click here