What is Public-Private Partnerships (P3)?
Today throughout the world, we are beginning to see a change in the way our cities and governments are handling infrastructure. Governments are starting to move away from the traditional methods and are beginning to utilize the public-private partnerships (P3) more efficiently. The traditional ways of building infrastructure, more so, created high risks for private sectors. In contrast, the goal of P3 arrangements is to take the technical, financial and operational risks, and distribute them optimally between both the public and the private sector partners. This ensures that both entities are doing their part and that all risks (design, construction, availability, demand, operational/maintenance, residual value, financing) are being minimized among all projects.
How is P3 being utilized in the U.S.?
When looking throughout the United States we are seeing that many cities are increasing support of private-public partnerships for smart city technology initiatives. Some examples of P3 systems at work that Think Big is watching include:
- AT&T and the City of Los Angeles, CA on the expansion of 5G, FirstNet for first responder communications, and smart city technologies like digital kiosks, asset monitoring and digital infrastructure
- The City of Columbus, Ohio using their $40M U.S Department of Transportation grant funds combined with private funds, now totaling $510M, to build a smart transportation hub using technologies such as roadside equipment to collect and send data between vehicles, signals and central traffic management, and transmitters inside 1,800 public and private vehicles that will talk to the system and one another
- Kansas City, MO using the P3 model for small business and startups to find sustainable solutions to improve services for residents and visitors
- San Francisco, California and how they are in the preliminary process of building and operating a city-wide high-speed fiber broadband network that is planned to reach every home and every business
- Verizon expecting a $100M investment into Sacramento, California to upgrade city infrastructure and focus on public safety technology solutions, especially traffic-related safety.
Understanding the roles of each public and private entity within a partnership
It is easy for one side of the partnership to take on all of the risks and responsibilities, but with the P3 system it allocates these responsibilities to each private and public sector more efficiently. As a private sector entering into the public-private partnership it is important to identify what the city needs and what your company can offer to fulfill those needs. On the other hand, as a public sector it is important to understand how a private company can add value to the municipality. Private entities are usually hired because public entities don’t have to the ability to fully complete a project. With that, the return on investment might be greater with the P3 rather than the traditional all-private or all-government project fulfillment.
Gain more insight into the P3 system and how to implement in your city
During our P3 webinar on Thursday, December 6 at 2pm CT/3pm ET, Think Big Partners’ Managing Partner, Herb Sih, will provide you with the latest market knowledge and prove how beneficial that knowledge is when creating a smart(er) city through the P3 system. We will discuss the mechanics of current successful models, what not to do and the current opportunities like the expansion of 5G cellular networks among communities. Additionally, we will discuss different tips and tricks on how to shorten the negotiation cycles between private sector and public sector entities as it takes thinking from multiple perspectives to get these done. We understand these systems can be complex and overwhelming — by participating in this webinar you will learn insightful information that can help build smart cities for today and tomorrow. Register now to attend: https://smartcityp3.splashthat.com.
Think Big can help your community identify and initiate opportunities for public-private partnerships by utilizing your unique advantages with best fit companies, helping your city stand out as an investment opportunity to the private sector, and leveraging our network of smart city technology companies. Read more about how our technology agnostic smart city advisory services can help your city grow smart(er).