Public Private Partnerships for Infrastructure Development
Public Private Partnerships are gaining in popularity as infrastructure development becomes more complex and expensive, and research and development becomes more specialized. The partnership is a contractual business relationship. The new factor is the unusual pairing of business partners from governments, university systems, and private businesses.
The arrangement seeks to share rewards and responsibilities for an infrastructure project with rapidly expanding specialized needs and resources. Each partner brings resources to the table–funding, specialized knowledge and product development, experience. This allows projects to be developed and implemented that are too large and complex for one organization, business, or government to undertake on their own.
Businesses bring funding and efficiency in supply chain management, project management, and provide innovative ideas in design and implementation. Governments can provide funding, systems work such as inspections, approvals, and regulatory requirements, and manage consumer work such as public commentary and questions. Universities and research centers can provide the innovative research or product development that is the unique engine driving the train.
Contractual obligations set out in a public private partnership include how the partners are going to allocate resources, share risk, and divide responsibilities. If there is anticipated profit at some point in the project, profit margins are allocated to partners. Approval processes for a partnership of this type are complicated and include review and approval by the governing bodies of all of the organizations participating–boards of directors, city councils, boards of regents.
According to attorney Jake Posey, managing shareholder of The Posey Law Firm, PC, infrastructure development has become so expensive and complicated that we can no longer assume that one entity has the knowledge, resources, or expertise to successfully manage this type of work. The old paradigm of project ownership is being updated by disparate organizations finding ways to work together. Collaboration between business, education, and government is necessary for complex development projects to succeed.