The document discusses public-private partnerships (P3s) and best practices for their use. It describes the American Infrastructure Alliance Initiative (AIAI) which advocates for P3s to help address America's infrastructure deficit. The AIAI recommends that P3 legislation provide flexibility, use industry standard definitions, outline clear procurement processes, allow stipends for unsuccessful bidders, exclude submission fees, and provide flexibility in requiring appropriate security. Examples of successful P3 transportation projects in the US and Canada are also presented.

1. How are Public Private Partnerships
(P3’s) helping America Achieve Success
by Leveraging Best Practices Through
PARTNERSHIP
And what are some of the Best
Practices associated with this
delivery model?

2. Agenda
• What is AIAI (a brief commercial)
• Review of the Infrastructure Deficit
• What are P’3s – Fundamentals
• Best Practices (AIAI and General)
• Q&A

3. WHAT IS AIAI

4. AIAI Mission

5. AIAI Objective
• We believe effective and well planned advocacy can
provide government officials with the knowledge they
need to make informed decisions about all the benefits
of Public Private Partnership-economic development, life
cycle cost savings, risk transfer and accelerated project
delivery. We intend to work towards the following:
– Clear and reliable project pipeline
– Achieving a consistent approach for both civil and social projects
– Early awareness of legislative & administrative issues for members
– Clarity of procurement processes

6. AIAI Initiatives
• The AIAI’s early initiatives include the following:
– New Legislation. Shape and urge passage of new P3 Legislation at the
State level for both transportation and social infrastructure projects.
– Facilitative Implementation. Assist and guide agencies and
stakeholders on the implementation of existing P3 legislation.
– Best Practices. Coordinate with the National Conference of State
Legislators (NCSL) and National Governors Association’s to implement
best P3 practices.
– Creative Tax Solutions. Implement innovative solutions on important
P3 tax issues, such as preservation of depreciation on toll roads.
– Institutionalized Processes. Institutionalize P3’s to create more
concise processes, procedures and documentation to increase deal
flow and gain efficiency.
– Informed Decision Making. Advocate for an informed decision making
process and stipend recovery program in situations where P3 projects
are cancelled.

7. The Infrastructure Deficit

8. Infrastructure Deficit
• Overall Rating – D+ (American Society of Civil Engineers – 2013
Report Card)
• Value of Deficit - $3.6 Trillion needed by 2020
(American Society of Civil Engineers – 2013 Report Card)
• Sample Categories
 Aviation & Ports
 Transit
 Bridges
 Dams
 Drinking Water
 Energy
 Rail & Roads

9. Deficient Bridge Infrastructure

10. Transit Funding Gap

11. Infrastructure Deficit
• P3’s are only one delivery solution to the
infrastructure deficit (20% +/-)
• There are many others:
– Design/Build
– Hard Bid
– CM to GC
– Early Contractor Involvement
– Sole source

12. What are P3’s & How do they Work?

13. P3 – Public – Private Partnership
• A combination of the most unlikely partners:
– Putting together
• ‘The untrusted, greedy private sector with
• Government – the arch rival of the private sector noted
for being over budget and behind schedule’
• To create a trusting and collaborative team
seeking innovation and long term asset value
• Truly depends on paradigm shift to form a
partnership

14. P3 – Public – Private Partnership
• To be successful:
– Requires a cultural shift in thinking about the
relationship between the public and private
sectors
– Requires deeper understanding of how the model
can be successful in delivering infrastructure
– Requires acceptance and promotion from the top
- politically and strategically from agency
management

15. A P3 is What…?
• What is a P3
“Any project that takes on additional responsibility and/or
liability beyond design and build. This additional liability
could be, but is not limited to: Operation, maintenance,
short-term financing, long-term financing, GAP finances,
tolling and/or fare box risk, ownership in any component of
the completed project, etc.”
 Design-Build finance projects
 Availability payment projects
 Shadow toll projects
 Comprehensive Development Agreement (CDA) projects
 Extended warranty or maintenance projects
 Tolling and/or traffic and revenue projects

16. P3 – The General Structure

17. P3 – The Parties

18. What a Deal Looks Like (yes this is meant
to confuse you)

19. P3 Lifecycle
RFI Stage
(8-12 weeks)
RFQ Stage
(12-16 weeks)
RFP Stage
(32-40 weeks)
Closing
(8-12
weeks)
Project
Execution
• Announce transaction
• Issue RFQ
• Hold information
meeting
• Receive submissions
• Evaluate Submissions
• Conduct interviews
• Short list of 3
Respondents
• Confidential process with short
listed Respondents
• Issue RFP
• Open Data Room
• Site visits
• Receive and evaluate (staged)
submissions
-Concept/innovations
-Technical /financial
• Receive comments on draft
Project Agreements
• Issue Final Project Agreement
• Receive and evaluate final
submission
• Selection of Proponent
• Execute Project
Agreements
• Closing of Financing

20. Value Components of the Deal
76.1%
5.0%
12.7%
6.2%
NPV Influence
Construction Price
Financing
SPV & Rehab
O&M

21. The FHWA - Public-Private
Partnerships
• 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 Office of IPD (Innovative Program Delivery) 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

22. Project Examples – The United States
• Design Build Finance
– 95 Express - Miami, Florida
– I-4 / Selmon Expressway Connector - Tampa, Florida
– I-485 Charlotte Outer Loop - Charlotte, North Carolina
– Innerbelt Eastbound Bridge - Cleveland, Ohio
– I-75 Roadway Expansion (iROX) - Collier and Lee Counties,
Florida
– Northwest Corridor - Atlanta, Georgia
– U.S. Route 460 Corridor Improvements Project - Petersburg
to Suffolk, Virginia
– Highway 183 - Texas

23. Project Examples – The United States
• Design Build Finance Maintain
– Goethals Bridge Replacement - Staten Island, New York to Elizabeth New, Jersey
• Design Build Finance Operate Maintain (Real Toll)
– 91 Express Lanes - Orange County, California
– Downtown Tunnel / Midtown Tunnel / MLK Extension - Cities of Norfolk and Portsmouth,
Virginia
– Dulles Greenway - Loudoun County, Virginia
– I-495 Capital Beltway HOT Lanes - Fairfax County, Virginia
– I-95 HOV/HOT Lanes - Fairfax, Prince Williams, and Stafford Counties, Virginia
– IH 635 Managed Lanes - Dallas County, Texas
– North Tarrant Express Segments 1 and 2A - Dallas-Fort Worth Metroplex, Texas
– North Tarrant Express Segments 3A and 3B - Dallas-Fort Worth Metroplex, Texas
– SH 130 (Segments 5-6) - Austin, Texas Metropolitan Area
– South Bay Expressway (formerly SR 125 South) - San Diego County, California
– Southern Connector - Greenville, South Carolina
– Teodoro Moscoso Bridge - San Juan to Carolina, Puerto Rico
– U.S. 36 Managed Lane/Bus Rapid Transit Project: Phase 2 - Denver Metro Area, Colorado

24. Project Examples – The United States
• Design Build Finance Operate Maintain (Availability
Payment)
– Eagle Project - Denver Metro Area, Colorado
– I-4 Ultimate - Orlando, Florida
– I-595 Corridor Roadway Improvements - Broward County,
Florida
– I-69 Section 5 - Bloomington to Martinsville, Southwest
Indiana
– Ohio River Bridges East End Crossing - Southern
Indiana/Louisville, Kentucky
– Port of Miami Tunnel - Miami, Florida
– Presidio Parkway (Phase II) - San Francisco, California

25. Canadian Snapshot Summary
Sector Number Value ($ millions)*
Transportation 49 31,405
Hospitals & Healthcare 82 22,418
Justice/Corrections 19 5,458
Energy 6 4,458
Education 11 1,746
Recreation & Culture 17 1,380
Environmental 24 1,229
Real Estate 4 944
Defence 1 867
Government Services 4 482
IT Infrastructure 2 1
Total 219 70,388
* includes only costs of projects where costs have been finalized and released.

26. States and Territories with P3 Enabling
Legislation
• Alabama, Alaska, Arizona, Arkansas, California,
Colorado, Connecticut, Delaware, Florida, Georgia,
Illinois, Indiana, Louisiana, Maine, Maryland,
Massachusetts, Minnesota, Mississippi, Missouri,
Nevada, North, Carolina, North Dakota, Ohio,
Oregon, Pennsylvania, South Carolina, Tennessee,
Texas, Utah, Virginia, Washington, West Virginia,
Wisconsin, Puerto Rico.

27. P3 Historical - North America

28. Best Practices – Lessons Learned –
Public Sector
• Know priorities and objectives
• Understand best financing solution for
proposed project
• Clear pre-procurement barriers (legal,
financial, political and public)
• Proper risk allocation
• Form true partnerships with private sector

29. Best Practices – Lessons Learned –
Private Sector
• High cost to pursue – be selective
• Team early
• Clear team leadership
• Goals and objectives clearly defined, but room for innovation
• Challenge everything, explore alternatives
• Only enter deals with Transparency and fair procurement process
• Develop risk allocation matrix – review throughout the bid
• Public and community relations are critical throughout the process
• Construction Price (usually) wins the deal

30. AIAI BEST PRACTICES RECOMMENDATION
• P3-enabling legislation should be broad-based, providing flexibility in the
procurement processes that will facilitate submission of innovative and
comprehensive proposals in support of public infrastructure needs.

31. AIAI BEST PRACTICES RECOMMENDATION
P3 legislation should include definitions which are based on
generally-accepted, industry standards in order to facilitate clarity
and alignment in the procurement guidelines.

32. AIAI BEST PRACTICES RECOMMENDATION
• Proposed P3 legislation should clearly outline public agency procurement
processes and methodologies for soliciting, reviewing and evaluating
proposals and selecting teams with which the responsible public entity
partners to develop public infrastructure.

33. AIAI BEST PRACTICES RECOMMENDATION
• The responsible public entity should be authorized to pay a
stipend to an unsuccessful bidder or proposer
that has reached the pre-qualified bidder stage.

34. AIAI BEST PRACTICES RECOMMENDATION
• In order to generate sufficient and appropriate responses to
solicitations for proposals for public infrastructure projects, every
effort should be made to exclude any provision for a submission
fee.

35. AIAI BEST PRACTICES RECOMMENDATION
Securities for P3s are required to satisfy the needs of financial
institutions, owners, subcontractors and suppliers. A combination of
both liquid securities and performance and payment bonds provides the
flexibility needed to reach financial close. Flexibility should be provided
to require the appropriate level of security.

36. Summary

37. Thank you very much!
Q&A