2013 P3 Forecast Sees Cautious Optimism


Nossaman Partner Simon Santiago was quoted in the InfraAmericas article "2013 P3 Forecast Sees Cautious Optimism" about the outlook for 2013 US infrastructure public private partnerships and the procurements and closed deals in 2012 that could lay the groundwork for more projects this year. 

One notable procurement that wrapped up in late 2012 may cause other states to take notice, Mr. Santiago said.  He stated that the procurement process for East End Crossing, Indiana's half of the Ohio River Bridges project, was notable for its tight timeline – the time span from when Indiana identified six RFQ respondents and selected the preferred proposer lasted approximately seven-and-a-half months.  The article quoted Mr. Santiago as saying that the "very efficient procurement process" may help to defuse a major criticism of P3 projects, that is, that procurement processes last too long and are too complex.  He added that the winning consortium, WVB East End Partners, said it will build the project for $763m, 23% lower than original cost estimates.

Regarding the Illiana Expressway, a project that will connect the I-55 in Illinois with the I-65 in Indiana, Mr. Santiago noted that Illinois is floating a "trial balloon" for a P3.  He also noted that P3s could also be used to build more light rail and multi-modal projects.  Mr. Santiago is quoted as saying, "There are more of these projects being built due to an increased interest in transit and the need for connectivity across modes of transportation."  He continued, "And private financing must be considered as an option to supplement public funding."  Mr. Santiago also mentioned that both Washington, D.C. and Maryland are studying P3s as a possible funding solution for light-rail projects.

The article notes that the complexity of completing transportation deals can contribute to water and parking deals taking up much of the P3 pipeline.  Mr. Santiago stated that transportation deals can be harder to complete than other P3s as they can involve multiple municipalities and require multiple levels of governmental approval to be completed.  Further, he said that building a toll road requires buy-in from a public that may not be used to paying tolls while, by contrast, users of water and sewer and parking facilities are accustomed to paying fees for these services.

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