The U.S. Department of the Treasury recently published an Economic Framework for Comparing Public-Private Partnerships and Conventional Procurement.
The department concluded that there is no single factor that should determine whether a P3 is likely to yield a stronger benefit than one delivered through conventional means. The paper also outlines important steps for a government to take before procuring a P3 project to ensure optimal benefit to the taxpayer.
One key factor cited in the report was the capacity of a project to bundle several projects into one large contract. The capacity to bundle is by far the most important factor in a P3 creating cost savings, the report concluded.
Other important considerations were:
- Private-sector expertise: A strong indicator of whether the project will provide a net-benefit over the full life cycle of a P3 is the technical expertise available.
- Clearly defined terms that are quantifiable: How precisely does the contract lay out the service level required?
- High capital costs and long lived assets: Assets procured using a P3 need to be large enough to generate cost savings that offset the transaction costs of privately raised capital.
Related Stories
| Oct 18, 2012
EPA commercial building lead paint rule pushed back to 2015
The U.S. Environmental Protection Agency's inclusion of commercial buildings in a residential lead paint rule is being delayed until 2015.
| Oct 18, 2012
Chicago pushing green roofs to reduce heat island effect
The city of Chicago has mandated that all new buildings that require any public funds must be LEED certified, usually with a green roof.
| Oct 11, 2012
OSHA launches pilot program for alternative dispute resolution on whistleblower complaints
The Occupational Safety and Health Administration (OSHA) is launching an alternative dispute resolution (ADR) pilot program for complaints filed with OSHA's Whistleblower Protection Program.
| Oct 11, 2012
Bill promotes investment in commercial, multifamily retrofits
The Commercial Building Modernization Act recently introduced in the Senate would extend and streamline a current tax deduction to encourage commercial and multifamily residential building owners to perform comprehensive energy-efficient retrofits.
| Oct 11, 2012
Morristown, N.Y., settles code violation dispute with Amish
The town of Morristown, N.Y., has dropped charges of building code violations against local Amish communities to settle a First Amendment complaint.
| Oct 11, 2012
Mesquite, Nev., rebels against state-mandated energy code
The city council of Mesquite, Nev., voted against adopting a new energy efficiency code adopted by the state.
| Oct 11, 2012
Bloomingdale, N.J., restricts ground solar and wind energy installations
The borough of Bloomingdale, N.J., recently adopted regulations for solar-energy and wind energy systems.
| Oct 3, 2012
Bill introduced to extend home energy efficiency tax credit
A bill to extend the expired residential energy efficiency tax credit for installing qualified furnaces, boilers, central air conditioners, and heat pumps was recently filed in the U.S. House of Representatives.