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Public Private Partnerships

 

The New Infrastructure Mega-Projects

 

SECOND EDITION

By Bob Prieto

Jupiter, Florida, USA


The funding and delivery of US Infrastructure projects using Public Private Partnerships (PPP) is an increasingly attractive tool in the United States. Legislative changes in SAFETEA-LU (the latest US transportation bill) provided the States with new and improved tools to foster development. In turn this has created new opportunities for contractors and developers to participate in the design, build, finance, and operation of tomorrow’s transportation infrastructure.

The PPP process is not “business as usual” for either the public sector or the traditional service providers that have served the industry over the years. For the public sector a new regulatory design is required to meet the challenges PPPs present while realizing the opportunities they hold. For the Contractor/Developer the risks are higher as are the rewards – but only if a deliberate process is employed. Regulators and Contractor/Developers must understand each other’s needs and processes as the programmatic delivery of infrastructure changes. This paper provides a “How To” Guide from the Contractor/Developer’s perspective to facilitate this understanding and to begin surfacing the myriad of issues that must be considered in this changed programmatic arrangement.

For the Contractor/Developer, his role in the total program process is earlier and more extensive than before. This brings with it a need for new skills and new questions which he must focus on. The contractor/developer’s objective is create, complete and prosper from a project that might otherwise not exist. For the public sector partner the transfer of responsibility, risk and reward brings its own set of issues and a need for a changed regulatory and even sometimes a changed legislative framework.

Some of the new, key questions that drive the overall process from the Contractor/Developer’s standpoint are:

  • Does political will exist?
  • Does a potential project exist?
  • Will stakeholders support the project?
  • Are there any fatal flaws?
  • Will it make financial sense?
  • Is the regulatory framework well designed?
  • Will the project “FLIP”?
  • Can we close it?

A process for answering these questions follows, together with some second order questions that must be satisfactorily answered to achieve a profitable PPP. This “How To” Guide is not intended as a cookie-cutter approach to PPP development but as a framework around which market and project specific approaches can be built.

What is a Successful PPP?

“How To” guides usually start out by defining what the end objective is just as program management is about the achievement of strategic business objectives. In the case of PPPs it is clearly a successful PPP.

But what is a successful PPP?

More…

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Editor’s note: Second Editions are previously published papers that have continued relevance in today’s project management world, or which were originally published in conference proceedings or in a language other than English.  Original publication acknowledged; authors retain copyright.  This paper was originally published in PM World Today in June 2008.  It is republished here with the author’s permission.

How to cite this paper: Prieto, R. (2008). Public Private Partnerships: The New Infrastructure Mega-Projects, Second Edition, PM World Journal, Vol. X, Issue XI, November 2021. Originally published in PM World Today, June 2008. Available online at https://pmworldlibrary.net/wp-content/uploads/2021/11/pmwj111-Nov2021-Prieto-public-private-partnerships-2nd-ed.pdf


About the Author


Bob Prieto

Chairman & CEO
Strategic Program Management, LLC
Jupiter, Florida, USA

 

Bob Prieto is a senior executive effective in shaping and executing business strategy and a recognized leader within the infrastructure, engineering and construction industries. Currently Bob heads his own management consulting practice, Strategic Program Management LLC. He previously served as a senior vice president of Fluor, one of the largest engineering and construction companies in the world. He focuses on the development and delivery of large, complex projects worldwide and consults with owners across all market sectors in the development of programmatic delivery strategies. He is author of nine books including “Strategic Program Management”, “The Giga Factor: Program Management in the Engineering and Construction Industry”, “Application of Life Cycle Analysis in the Capital Assets Industry”, “Capital Efficiency: Pull All the Levers” and, most recently, “Theory of Management of Large Complex Projects” published by the Construction Management Association of America (CMAA) as well as over 800 other papers and presentations.

Bob is an Independent Member of the Shareholder Committee of Mott MacDonald and a member of the board of Dar al Riyadh. He is a member of the ASCE Industry Leaders Council, National Academy of Construction, a Fellow of the Construction Management Association of America and member of several university departmental and campus advisory boards. Bob served until 2006 as a U.S. presidential appointee to the Asia Pacific Economic Cooperation (APEC) Business Advisory Council (ABAC), working with U.S. and Asia-Pacific business leaders to shape the framework for trade and economic growth. He is a member of the Millenium Challenge Corporation advisory board where he had previously served. He had previously served as both as Chairman of the Engineering and Construction Governors of the World Economic Forum and co-chair of the infrastructure task force formed after September 11th by the New York City Chamber of Commerce. Previously, he served as Chairman at Parsons Brinckerhoff (PB) and a non-executive director of Cardno (ASX)

Bob serves as an honorary global advisor for the PM World Journal and Library and can be contacted at rpstrategic@comcast.net.

To view other works by Bob Prieto, visit his author showcase in the PM World Library at https://pmworldlibrary.net/authors/bob-prieto/

 

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