Tricks of the Trade
For now, positivity is running high across the US market. Despite no infrastructure bill yet being delivered by the federal government, various press leaks and some enthusiastic words have led many investors to assume the best from the administration.
One could still be forgiven for being sceptical. After all, Trump and his government have a worrying track record for U-turns, and in some cases downright untruths, so it is important to take anything emanating from the White House with a pinch of salt, no matter how much it may suit the industry at this time.
To be fair though, since the early days of his campaign, Trump has spoken of a desire to partner with the private sector to boost infrastructure, so hopefully he will come good on his word. Signs are certainly pointing to that at this moment.
No matter where one stands on the issue of P3, it is difficult to escape the notion that another U-turn at this stage would make little sense for the administration, and the wider country’s plans to overhaul its infrastructure.
While there remain many dissenting voices for P3 at all levels of government (and the wider public), there are countless examples in the US of how the model can work for the right project.
According to a recent report from economists The Brattle Group, more than 30 states are procuring at least one project as a P3 and over 200 projects are in the pipeline. This is well above prior levels of activity.
And even more encouragingly, P3s are being utilized in sectors outside of transportation, with social infrastructure accounting for almost a quarter of the total. It is therefore clear that there is an appetite for the model to at least be an option for governments going forward. Yes, there are examples of failure, but there are clearly examples where it has more than got the job done.
With that in mind, the federal government surely must do all they can to support P3 as an option where possible for those that want to use it. Support from the top provides a legitimacy to the process that will ultimately help to overcome naysayers. Delivering on its plans in such a high profile sector would also help to overcome the considerable bad press that this administration has courted since its rise to power.
But chiefly, not doing so would surely only further restrict the options available for jurisdictions to improve their infrastructure. And that would place unwanted additional barriers in front of the already considerable task of bringing the US infrastructure network into the 21stcentury.
A look at the development of social P3s in the US and the models that have supported growth will feature in the next edition of P3 Bulletin, out now