Bus

Pub Perspective: The most important P in PPP is the last one

Posted on May 30, 2014 by Frank Di Giacomo, Publisher

This year, APTA’s business members have put together a series of conference sessions that showcase new business models involving more private sector participation in providing service. The ideas range from additional financing strategies to innovative ways of maintaining railcars and buses. While there is great potential in public-private partnerships — or “P3s” as they are known — it would be a grave mistake to assume they are the complete answer. In fact, the better people understand that the most important word in the phrase “public-private partnership” is “partnership,” the more solid the future of P3s — and the industry — will be.

Help in saving money or finding new money
The growing interest in P3s comes from several concerns about our industry’s basic paradox, right now. At a time when our services haven’t been this popular since when Dwight D. Eisenhower was president, it is becoming harder and harder to meet that demand. Not only are costs beginning to climb again, competition, even for the record levels of funding we continue to see, has never been higher.

As the Highway Trust Fund and the Mass Transit Account both speed toward insolvency, many in Congress, as well as outside, assume others, particularly the private sector, will take up the slack if there is truly a need. Unfortunately, this will not happen.

True, many cities are voting to increase local funding for public transportation, but the fine print in almost all of these ballot measures assumes there will be a federal piece of the funding package. 

Second, like any other government, states and cities also have competing priorities, so their ability to step in can only go so far. Finally, very few industrialized countries fund their entire public transportation program from a single level of government or a single source. That means that partnerships are the rule, not the exception, to good transportation policy.

Private sector only one of many partners
For P3s to work, the private partners need public partners they can count on. In fact, in the places where P3s are used extensively — and almost all other countries use them more than the U.S.  — the commitments are clearly spelled out in the law and in development agreements, which are in place well before any contract is signed. However, there are many states and cities where P3s are still not even legal.

The first thing to understand about P3s is that they are primarily a money-saving strategy and are still expected to earn a return on investment, which usually is paid from the savings achieved by delivering the project faster than with conventional methods. The second thing is that P3s need other  reliable funding sources so that they can manage the commercial risk. That means that the time when policymakers want to rely on P3s more is no time to let trust funds go insolvent.

View comments or post a comment on this story. (0 Comments)

More News

Specialty Vehicles partners with trolley manufacturer

Will be the exclusive domestic and international distributor of Brown Industries-manufactured American Heritage trolleys.

Europe's FlixBus considers U.S. expansion

The European long-distance bus service currently operates 1,500 green buses in 26 countries and carried about 40 million passengers in 2017.

Proterra supplies Louisiana's first battery-electric bus fleet

Five Proterra Catalyst E2 vehicles were purchased through the FTA's Low or No-Emission Vehicle Deployment Grant.

Valley Metro, Phoenix award 396-CNG-bus order to New Flyer

The contract, which was supported by FTA funding and includes options for 197 buses over five years.

L.A. Metro expands all-door boarding for key Metro Rapid lines

Riders will be able to board at any door of a bus – front, middle or rear – and will pay their fare by using the TAP fare validator installed at each door.

See More News

Post a Comment

Post Comment

Comments (0)

More From The World's Largest Fleet Publisher

Automotive Fleet

The Car and truck fleet and leasing management magazine

Business Fleet

managing 10-50 company vehicles

Fleet Financials

Executive vehicle management

Government Fleet

managing public sector vehicles & equipment

TruckingInfo.com

THE COMMERCIAL TRUCK INDUSTRY’S MOST IN-DEPTH INFORMATION SOURCE

Work Truck Magazine

The number 1 resource for vocational truck fleets

Schoolbus Fleet

Serving school transportation professionals in the U.S. and Canada

LCT Magazine

Global Resource For Limousine and Bus Transportation

Please sign in or register to .    Close