By Jane Campbell,
With the global insurer AIG predicting that the United States will soon become world’s largest market for public-private partnerships (P3s), many state and local governments are taking a serious look at the potential of P3s to realize social-services and traditional infrastructure needs. But the complexity of P3 structures can be daunting. Without expert guidance, governments may find themselves on an unproductive P3 path after a lot of time and effort has already been expended.
Worse yet, decision-makers need to guard against opportunists selling too-good-to-be-true “solutions” for complex and challenging projects. Fundamentally, P3s are a financing mechanism, not a source of funding. That is an important distinction — otherwise known as the “no-such-thing-as-a-free lunch” rule.
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