May 2009
New York, NY
Nearly all U.S. state and local government officials with Public-Private Partnerships (PPP) experience have a high opinion and approve of PPP, according to a new PPP SmartMarket Report, released today by McGraw-Hill Construction, with support from Halcrow, at the Dow Jones Infrastructure Summit in New York City.
Furthermore, the financial crisis is not topping consideration of PPP: 71% of state and local officials report that PPP is just as or more attractive during the crisis.
While the American Recovery and Reinvestment Act of 2009 allocated nearly $50 billion to transportation infrastructure funding, this is only a fraction of the funding needed long-term. For example, the American Society of Civil Engineers estimates that only $70.3 billion is spent each year on highway capital improvements, when $186 billion per year is needed. The U.S. is facing serious challenges as its roads, bridges and tunnels deteriorate.
“In order to remain globally competitive and move our goods and services effectively, we need to be prioritizing the improvement of our infrastructure, and we need the financing to make that happen,” said Harvey M. Bernstein, Vice President of Industry Analytics, Alliances and Strategic Initiatives, McGraw-
Hill Construction. “PPPs provide one option that can help fill this revenue gap, and state officials that are working with them are realizing the success they can offer. We think this new research helps move us toward a better, more informed conversation about innovative infrastructure financing options.”
“We are faced with a great opportunity—the opportunity to lead with new thinking regarding infrastructure funding, particularly through vehicles such as PPP,” said Michael Della Rocca, President, North America, Halcrow. “I fundamentally believe it is within our collective ability to redefine the funding, procurement, implementation, management and renewal of our infrastructure assets and provide a network that will make a genuinely positive difference to people’s lives and to the broader wealth of America.”
McGraw-Hill Construction surveyed state and local government officials in the U.S. about engaging in PPP to identify trends, offer better understanding, reveal areas that need education, and provide information on market opportunities. The resulting PPP report features data results, case studies, and interviews with key decision-makers and PPP leaders. Highlights from the report include:
- Experience leads to a positive outlook on PPP: 92% of experienced state and local officials are interested in PPP.
- The current economic downturn is not perceived as a major obstacle: 71% of state and local officials report that PPP is just as or more attractive in today’s economic crisis.
- PPP is well-known, but not well-understood: 70% of state and local officials know of projects outside their states, but 61% have had no direct PPP experience and do not fully understand its terms or benefits.
- Negative opinions were surprisingly few—only 10% of state and local officials said they are not considering PPP, and 75% of respondents are ambivalent—suggesting that education is the most important next step.