CenterPoint Properties

CenterPoint Properties

Supply chain participants should expect and embrace public-private partnerships, known as P3s, to fund essential infrastructure. Government simply doesn’t have the money. More troubling is the inability of government to prioritize spending. We need to face facts that not all transportation needs are equal.

Taxes often fund unnecessary projects that serve electoral needs rather than effective goods movement. Private capital, seeking a return for creating transportation efficiencies, would supply capital only to critical projects. Investors seek projects that offer users the greatest good, with fees capturing only a portion of their savings.

Abundant capital is available for infrastructure if laws encouraged public-private partnerships by providing government seed money and cutting red tape. For sure, P3s must align the interests of investors, users and government. Arrangements should result from competition, be transparent and charge fair fees.

An effective approach adopted by some states permits private “unsolicited bids” to develop, redevelop or operate transportation assets. Rival bids are sought and if any is acceptable a partnership is negotiated by the state’s transportation agency without the need for legislation that opens the door for politics.

Many companies reject user fees, but if efficiency gains are larger, why? If fees are tailored to usage and can be invested solely for the benefit of the users, isn’t that a fair result? Finally, if “sunshine” illuminates the creation and management of projects, all can feel good that they are receiving appropriate value for their money. In a well-conceived P3, government is involved, but only to facilitate and speed private project execution.

Public-private partnerships are coming. Rather than resist them, we should promote laws properly framed to serve the needs of the supply chain by harnessing private investment for indispensible infrastructure.