P3's (Public-Private Partnerships)

[Beltway]

That is why they call them public private partnerships now (PPPs).

I think in another 10-15 years, we will be looking at P3's as the "what were we thinking" portion of road building in the early part of this century.

Actually in the last 30 years they have been becoming more and more prevalent all over the world for building highway projects.

Of course.  Legalizing corruption is a very popular thing to do for those that benefit.

What a shameful statement for a state DOT employee to make.  I can't speak for every state, but in many places including in my state, while some of the economic benefits can be debated, there is certainly nothing inherently 'corrupt' about public-private partnerships.  I see some projects which couldn't have been built without major amounts of private sector funding.

[Rothman]

That is why they call them public private partnerships now (PPPs).

I think in another 10-15 years, we will be looking at P3's as the "what were we thinking" portion of road building in the early part of this century.

Actually in the last 30 years they have been becoming more and more prevalent all over the world for building highway projects.

Of course.  Legalizing corruption is a very popular thing to do for those that benefit.

What a shameful statement for a state DOT employee to make.  I can't speak for every state, but in many places including in my state, while some of the economic benefits can be debated, there is certainly nothing inherently 'corrupt' about public-private partnerships.  I see some projects which couldn't have been built without major amounts of private sector funding.

The private sector funding part of it is a sham.

The whole point of PPPs is to turn public roads over to private entities, who then make money off their "investment" (that "private sector money").

In the end, PPPs are design to streamline public funds and assets into the hands of private contractors.  PPPs get states a step closer to contract steering and corruption, not further.

At NYSDOT, PPPs had a flash of popularity that died pretty quickly.  Didn't hear the term again until this Republican Administration.

Of course, there was design-build in the interim as well, where literally a chosen few contractors get to bid on a project and everyone gets paid to some degree -- even the losers.  I call that corruption as well.

(personal opinion emphasized)

[Beltway]

Actually in the last 30 years they have been becoming more and more prevalent all over the world for building highway projects.

Of course.  Legalizing corruption is a very popular thing to do for those that benefit.

What a shameful statement for a state DOT employee to make.  I can't speak for every state, but in many places including in my state, while some of the economic benefits can be debated, there is certainly nothing inherently 'corrupt' about public-private partnerships.  I see some projects which couldn't have been built without major amounts of private sector funding.

The private sector funding part of it is a sham.
The whole point of PPPs is to turn public roads over to private entities, who then make money off their "investment" (that "private sector money").
In the end, PPPs are design to streamline public funds and assets into the hands of private contractors.  PPPs get states a step closer to contract steering and corruption, not further.
At NYSDOT, PPPs had a flash of popularity that died pretty quickly.  Didn't hear the term again until this Republican Administration.
Of course, there was design-build in the interim as well, where literally a chosen few contractors get to bid on a project and everyone gets paid to some degree -- even the losers.  I call that corruption as well.
(personal opinion emphasized)

Sounds like New York state may have screwed up on its P3s.  If done properly the state retains ownership of the facility.  Private sector funding has always been a major element of infrastructure projects around the world. 

FHWA themselves is a major advocate --

"FHWA encourages the consideration of public-private partnerships (P3s) in the development of transportation improvements. Early involvement of the private sector can bring creativity, efficiency, and capital to address complex transportation problems facing State and local governments. The Center for Innovative Finance Support provides information and expertise in the use of different P3 approaches, and assistance in using tools including the SEP-15 program, private activity bonds (PABs), and the TIFIA Federal credit program to facilitate P3 projects."

https://www.fhwa.dot.gov/ipd/p3/

Large projects are being built all over the country --
https://www.fhwa.dot.gov/ipd/p3/p3_projects/maps/projects_new_build.aspx

[VTGoose]

What a shameful statement for a state DOT employee to make.  I can't speak for every state, but in many places including in my state, while some of the economic benefits can be debated, there is certainly nothing inherently 'corrupt' about public-private partnerships.  I see some projects which couldn't have been built without major amounts of private sector funding.

Former Va. Gov. Bob "Give me gifts!" McDonnell and his questionable U.S. 460 PPP plan say "Hi." That's money down the tubes that probably will never be totally recovered.

[Rothman]

Of course, FHWA is for them.  Secretary Chao said so right out of the gate.  Like I said, they're back in vogue with this Republican Administration.  We are back to encouraging private profit off of public investment and prioritizing that profit generation above service to the public.

Yeah, I was too simple with what I meant with "handed over."   Meant all cases where a lease is set up or just an operating agreement...to actual transfer of ownership.  In essence, wherever the private entity becomes really the main player with the project(s) and facilities.

PPPs just didn't catch on here because New Yorkers have been quite well-trained in detecting b.s. over the decades.

Glad NYSDOT hasn't jumped back aboard that bandwagon yet as well.

[jeffandnicole]

That is why they call them public private partnerships now (PPPs).

I think in another 10-15 years, we will be looking at P3's as the "what were we thinking" portion of road building in the early part of this century.

Actually in the last 30 years they have been becoming more and more prevalent all over the world for building highway projects.

Of course.  Legalizing corruption is a very popular thing to do for those that benefit.

What a shameful statement for a state DOT employee to make.  I can't speak for every state, but in many places including in my state, while some of the economic benefits can be debated, there is certainly nothing inherently 'corrupt' about public-private partnerships.  I see some projects which couldn't have been built without major amounts of private sector funding.

A) He's speaking for himself.  Not on behalf of the state.

B) Most state employees anywhere would say the same thing if something similar was going on.

[Brandon]

That is why they call them public private partnerships now (PPPs).

I think in another 10-15 years, we will be looking at P3's as the "what were we thinking" portion of road building in the early part of this century.

Actually in the last 30 years they have been becoming more and more prevalent all over the world for building highway projects.

I would think the debacle with respect to I-69 in Indiana as well as the bankruptcies of the Indiana Toll Road and TX 130 would show why PPPs are a bad idea.

(personal opinion)

The Indiana Toll Road was not a P3.  It was a lease to a private consortium to operate the Toll Road for a number of years.

[vdeane]

It may technically be a lease rather than the private operator building the road, but the problems are the same.
https://usa.streetsblog.org/2014/11/18/the-indiana-toll-road-and-the-dark-side-of-privately-financed-highways/

I do think it's quite interesting that Beltway isn't saying anything about the collapse of Isolux Corsan's effort to build I-69.  As my examples show, the government is always left holding the bag in the end.  The profits may be privatized, but the losses are socialized.  The idea of "transferring risk to the private sector" is an oxymoron, and it always costs more in the end.  Simply having the private sector do something does not magically make costs shrink or vanish, but it does make profit a requirement.

[_Simon]

It may technically be a lease rather than the private operator building the road, but the problems are the same.
https://usa.streetsblog.org/2014/11/18/the-indiana-toll-road-and-the-dark-side-of-privately-financed-highways/

I do think it's quite interesting that Beltway isn't saying anything about the collapse of Isolux Corsan's effort to build I-69.  As my examples show, the government is always left holding the bag in the end.  The profits may be privatized, but the losses are socialized.  The idea of "transferring risk to the private sector" is an oxymoron, and it always costs more in the end.  Simply having the private sector do something does not magically make costs shrink or vanish, but it does make profit a requirement.

PPPs only help if the private company is 100% responsible for the ongoing maintenance and has strict legislative or contractual obligations to provide everything the DOT is obligated to do normally (a full DOT function outsource)

The cost inefficiencies in public sector are often in the operational expense, overhead, and project management, as well as costs lost to bidding basic maintenance functions out to third parties. 

Neither of these strategies makes money out of nowhere.  Public or private, the entity needs to move into the future to monetize the roads.  Whether the revenue source is fiber transit, utility runs, business services (big blue signs, ads, adopt a highway), roadside solar or running profitable roadside services, the entity isn't going to make money without shedding the union, looking to the future, and bringing basic services (resurfacing, signage, most at-grade road building) in-house.



SM-G955U

[Rothman]

You forgot screwing the public, for they are the ones providing the revenue to the private entities.

[_Simon]

You forgot screwing the public, for they are the ones providing the revenue to the private entities.

Id be up for a contract where public money gradually lowers to zero over time so the company becomes self-funded using the revenues I mentioned above.  The fiber transit program alone could fund a huge portion out DOT expenses if done correctly. 

SM-G955U

[02 Park Ave]

With the Robber Barons in control, obscene profits are the order of the day.📶

[Beltway]

What a shameful statement for a state DOT employee to make.  I can't speak for every state, but in many places including in my state, while some of the economic benefits can be debated, there is certainly nothing inherently 'corrupt' about public-private partnerships.  I see some projects which couldn't have been built without major amounts of private sector funding.

A) He's speaking for himself.  Not on behalf of the state.
B) Most state employees anywhere would say the same thing if something similar was going on.

Not me, I worked for 43 years for a state DOT and retired in 2017.

[Beltway]

You forgot screwing the public, for they are the ones providing the revenue to the private entities.

I don't know why you think that government largesse is the answer to everything, or that government funding can't be misappropriated and misused.

[Beltway]

PPPs just didn't catch on here because New Yorkers have been quite well-trained in detecting b.s. over the decades.

They are getting a critical megaproject built --

Goethals Bridge Replacement
Cost
$1.436 billion in eligible project costs
Funding Sources
TIFIA loan - $473.7 million (amount does not include $31.6 million in capitalized interest)
Private Activity Bonds - $453.3 million
Equity - $106.8 million
Port Authority Milestone Payments - $125.0 million
Pre-development costs funded by the Port Authority - $300.2 million

Project Delivery / Contract Method
DBFM (design, build, finance, and maintain)

Private Partner
NYNJ Link Partnership - Joint venture between Macquarie Infrastructure & Real Assets and Kiewit Development
Kiewit Infrastructure
Weeks Marine
Massman Construction
Parsons Transportation Group of New York

https://www.fhwa.dot.gov/ipd/project_profiles/ny_goethals.aspx

........

New York state really hasn't done much in the way of building new and expanded freeway projects in the last 20 years, period.  That being the era of growth in P3 projects in the U.S.

[Rothman]

You forgot screwing the public, for they are the ones providing the revenue to the private entities.

I don't know why you think that government largesse is the answer to everything, or that government funding can't be misappropriated and misused.

PPPs are an example of exactly that.

[Beltway]

You forgot screwing the public, for they are the ones providing the revenue to the private entities.

I don't know why you think that government largesse is the answer to everything, or that government funding can't be misappropriated and misused.

PPPs are an example of exactly that.

Your biased and uninformed opinion.  Do some research, Google is your friend.  Thousands of P3 projects have been utilized successfully all over the world and the U.S. 

FYI - if the discussed Long Island tunnel is to be built, I will wager that it will be a P3 project with at least several billion dollars of private funds.

[Rothman]

Here is the problem:  PPPs introduce a corrupt aspect to the contract letting process.  As opposed to the design-bid-build process, which simply solicits bids from contractors and chooses the lowest -- unless extreme circumstances are brought to bear (e.g., proven misconduct on contractor's.part), PPPs introduce an insidious "you put up money and we will make it worth your while" factor.  That is the definition of corruption.

PPPs are sold to the public as contractors putting up their own stake in the project when what is really happening in that they are sucking more public dollars into their profit than they would be otherwise. 

This goes for design-build processes as well:  Beware when processes are set up that circumvent the traditional, proven design-bid-build process, for they indicate benefitting private industry's interest being prioritized over the public's.

Your measure of success: Simple completion of the project, ignores the inappropriate and corrupt means by which such completion is realized.

This has nothing to do with the benefit of public employees (how the freak do I benefit either way?  I don't) and therefore, this claim of bias is nonsense.  As someone who has worked in financing transportation projects, both miniscule and gigantic, all I can say is that when the design-bid-build process is circumvented through "innovative" means is that huge contractors benefit and the public is left holding the bag.

Like I said, NY picked up on that pretty quickly and did not pursue that many PPPs and still does not (Goethals is PANYNJ -- a public authority outside of direct state government - now who is uninformed?).  If other states fall for the hype and waste public funds on them, so be it.

[jeffandnicole]

PPPs just didn't catch on here because New Yorkers have been quite well-trained in detecting b.s. over the decades.

If so, then why does the money waterfall called the PANYNJ still exist?

[Rothman]

PPPs just didn't catch on here because New Yorkers have been quite well-trained in detecting b.s. over the decades.

If so, then why does the money waterfall called the PANYNJ still exist?

Public authorities can be monsters.  The money waterfall is exactly why it still exists, as well as their legal status.

Read The Power Broker.

[Alps]

Here is the problem:  PPPs introduce a corrupt aspect to the contract letting process.  As opposed to the design-bid-build process, which simply solicits bids from contractors and chooses the lowest -- unless extreme circumstances are brought to bear (e.g., proven misconduct on contractor's.part), PPPs introduce an insidious "you put up money and we will make it worth your while" factor.  That is the definition of corruption.

PPPs are sold to the public as contractors putting up their own stake in the project when what is really happening in that they are sucking more public dollars into their profit than they would be otherwise. 

This goes for design-build processes as well:  Beware when processes are set up that circumvent the traditional, proven design-bid-build process, for they indicate benefitting private industry's interest being prioritized over the public's.

Your measure of success: Simple completion of the project, ignores the inappropriate and corrupt means by which such completion is realized.

This has nothing to do with the benefit of public employees (how the freak do I benefit either way?  I don't) and therefore, this claim of bias is nonsense.  As someone who has worked in financing transportation projects, both miniscule and gigantic, all I can say is that when the design-bid-build process is circumvented through "innovative" means is that huge contractors benefit and the public is left holding the bag.

Like I said, NY picked up on that pretty quickly and did not pursue that many PPPs and still does not (Goethals is PANYNJ -- a public authority outside of direct state government - now who is uninformed?).  If other states fall for the hype and waste public funds on them, so be it.

You're wrong about many things here. DB and PPP projects tend to have lower overall cost and faster project completion than DBB for major, major projects. Look at how quickly K-Bridge and Goethals were replaced. Speaking from the design side, 70% plans are already going to the contractor to figure out how to build within 2 months of the project award, and 100% plans follow just a few weeks later as construction gets underway. Not only does that shave YEARS off the typical process - not an exaggeration - but your design costs are considerably lower, and by having a contractor work together with the designer in the design phase, there is a much greater chance of finding economies and innovations to lower cost and add benefits to the project. I don't know where you get your figures in your rant, but when you say "the old way is best" that just sounds like reactionism. I've seen both, I know DBB well, and I see advantages to DB in many aspects - again on the largest projects.

[vdeane]

how the freak do I benefit either way?  I don't

It's been theorized that the reason why many positions formerly filled by analysts are now being filled by engineers is a way to promote certain engineers out of the Design bureau and keep them safe from Design-Build.

[Rothman]

Here is the problem:  PPPs introduce a corrupt aspect to the contract letting process.  As opposed to the design-bid-build process, which simply solicits bids from contractors and chooses the lowest -- unless extreme circumstances are brought to bear (e.g., proven misconduct on contractor's.part), PPPs introduce an insidious "you put up money and we will make it worth your while" factor.  That is the definition of corruption.

PPPs are sold to the public as contractors putting up their own stake in the project when what is really happening in that they are sucking more public dollars into their profit than they would be otherwise. 

This goes for design-build processes as well:  Beware when processes are set up that circumvent the traditional, proven design-bid-build process, for they indicate benefitting private industry's interest being prioritized over the public's.

Your measure of success: Simple completion of the project, ignores the inappropriate and corrupt means by which such completion is realized.

This has nothing to do with the benefit of public employees (how the freak do I benefit either way?  I don't) and therefore, this claim of bias is nonsense.  As someone who has worked in financing transportation projects, both miniscule and gigantic, all I can say is that when the design-bid-build process is circumvented through "innovative" means is that huge contractors benefit and the public is left holding the bag.

Like I said, NY picked up on that pretty quickly and did not pursue that many PPPs and still does not (Goethals is PANYNJ -- a public authority outside of direct state government - now who is uninformed?).  If other states fall for the hype and waste public funds on them, so be it.

You're wrong about many things here. DB and PPP projects tend to have lower overall cost and faster project completion than DBB for major, major projects. Look at how quickly K-Bridge and Goethals were replaced. Speaking from the design side, 70% plans are already going to the contractor to figure out how to build within 2 months of the project award, and 100% plans follow just a few weeks later as construction gets underway. Not only does that shave YEARS off the typical process - not an exaggeration - but your design costs are considerably lower, and by having a contractor work together with the designer in the design phase, there is a much greater chance of finding economies and innovations to lower cost and add benefits to the project. I don't know where you get your figures in your rant, but when you say "the old way is best" that just sounds like reactionism. I've seen both, I know DBB well, and I see advantages to DB in many aspects - again on the largest projects.

I am not that familiar with the Goethals project, but I definitely am with the K Bridge.  Keep in mind the K Bridge is not completely done and phases are left to complete.

There are definitely schedule benefits, no doubt, when you let final design and construction together as is how DB works in NY (albeit not "YEARS").  However, this mantra that DB projects are less expensive is less founded.  In fact, although NYSDOT has pursued DB for a decent number of projects, I have heard mixed reactions to the cost benefits.  In NY, there is a set, limited pool of contractors that can bid on such projects and it is not half the competitive process that design-bid-build process is.  Again, this was sold to the Legislature and public by stating that the law would keep unqualified contractors out of the bidding process altogether and therefore save time and lessen risk.  In reality, a precious few, large contractors can bid on them and the reimbursements to losing contractors borders on criminal.  It simply flies in the face of the economic principle that competition ensures appropriate prices.  The whole DB framework is set up to limit competition, not encourage it.

Combine that with the fact that you don't have two separate processes to compare on a particular project, I find these claims of cost savings to be more rhetorical than actual.

[Rothman]

how the freak do I benefit either way?  I don't

It's been theorized that the reason why many positions formerly filled by analysts are now being filled by engineers is a way to promote certain engineers out of the Design bureau and keep them safe from Design-Build.

First, that doesn't make sense to me since we would contract out the design anyway on such projects.

Second, this replacement of analysts with engineers from the design bureau is fantasy:  I have also been involved with hiring a decent number of new analysts at NYSDOT and we have not hired anyone out of the design bureau or even any NYSDOT engineers anyway for the hires I have been involved with.

[Alps]

Combine that with the fact that you don't have two separate processes to compare on a particular project, I find these claims of cost savings to be more rhetorical than actual.

You may wish to add a disclaimer to your posts that your views are not necessarily those of your employer. May be sound advice to us all.