6. Global Urbanization The world’s urban population is projected to grow at twice the annual pace of the total population. Source: United Nations, 2006
7. Growth in Govt Funded PPP Programs Energy PPP’s: Loan Guarantee Programs – US
8. Anticipated Growth in Infrastructure Source: Strategy + Business magazine (Spring 2007) by Booz Allen Hamilton, Inc. During the next 25 years, modernizing and expanding urban infrastructure will require approximately $41 Trillion. Projected cumulative infrastructure investment needed during the next 25 years to modernize obsolescent systems and meet expanding demand, broken down by region and sector.
13. PPP is not privatization PPP Privatization Asset ownership Usually no irrevocable transfer of assets Transfer of ownership of assets Public responsibility Set policy and service levels Regulation Level of services Mechanism for shared services Authorities withdraw from service Risk/Reward Shared Transferred Mode Partnership Self-interest
18. Types of PPP Degree of Private Sector Involvement Degree of Private Sector Risk
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24. The evolution of PPPs Operational Focus Strategic Focus Input-orientation Output-orientation Outcome-orientation Outsourcing Cost Value Design & build, O&M contracts PPP contracts Joint Ventures & Strategic Partnerships
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29. K-12 Examples “ The pieces in our puzzle box have the following words on them; planning objectives, educational program goals, expertise, capability, capital funding, construction bonds, school improvement, tax incentives, housing, affordable housing, public programs and services, school choice, charter schools, private financing, flexibility, inflexibility, profit motive, bottom line, debt service, tax liability, public goals and objectives, early childhood development, responsibility, priorities, political considerations, repeat business, classroom space, community space, community learning, career education, etc. The bottom line is that we in the D.C. Public Schools see {public-private partnerships} as an opportunity and valuable tool in the arsenal of school facility improvements and accommodation of educational program needs.” Dr. Paul Vance, Superintendent, Washington, D.C. Public School Board
30. Higher Ed Example University of Central Florida was able to build a convocation center where state funding was not available for such projects. Example of PPP at University of Central Florida:
34. Process Risks Risk Solution Reputation Loss of reputation because a partner reneges on agreement Thorough pre-screening of partner Expectation Unrealistic expectation - Include stakeholders in process - Clearly communicate status at every milestone Project Private partner unable to deliver due to financial resources or experience Select partner that can bring resources to accomplish goals Legal Project being derailed due to violations of procurement or delivery laws Research laws prior to RFP/RFQ process and ensure the document is compliant Political Process can derail due to political fighting Get political agreement prior to process
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36. Cost Over Time Time Cost to Public Sector PPP approach Public funding Traditional funding of projects contains peaks and valleys in spending PPP creates a steady, predictable, and affordable financing source