Public Private Partnerships: A Proven Solution to Move Critical Infrastructure Project Forward
As another arrow in the quiver of procurement, public-private partnerships (P3s) enable the public sector to deliver much-needed facilities more efficiently than traditional design-bid-build delivery, transferring the responsibility and risk for integrated development, financing, design-build, and operations and maintenance to one private partner.
P3 delivery factors in a holistic view of a project, where a private partner considers the development’s whole-life cost, including design-build, financing, long-term maintenance, and refurbishment costs – not just the up-front cost of delivering the facility. Integrating design-build,financing, and maintenance under one umbrella results in a lower actual cost in totality than if the public entity undertook those efforts on their own.
Edgemoor embraces P3s as an effective means to reduce risk in the development process, minimize the burden on client management resources, and control costs, while optimizing project functionality, flexibility, accountability, and the certainty of outcome. With more than $4 billion of projects completed or in development, here are just a few of the many compelling advantages Edgemoor provides to our public clients across the country through P3 delivery:
Under P3 delivery, Edgemoor guarantees the price for the building up front, including forecasted life cycle costs. Each agreement is different and may involve different partners, but at a minimum our clients receive a turnkey facility with a long-range plan for maintenance.
Maintenance Risk Transfer.
Everything from capital improvements to window washing and filter changes can be covered under a P3 operations and maintenance contract. Oftentimes, public facilities have binders filled with deferred maintenance projects waiting for capital allocation. In contrast, through P3 delivery,Edgemoor ensures that the buildings we deliver will be maintained and handed back to our clients in a high-performing manner at the end of the concession or lease period.
Variable Financing Options.
There is no such thing as a one-size-fits-all solution when it comes to financing a project. Edgemoor provides a flexible project financing approach and structures each deal to meet our client’s unique needs and circumstances. We have been successful in utilizing a range of different financial solutions, including tax-exempt debt, taxable private placements, bank loans, and equity investments.
Date Certain Delivery.
Clients, such as airport authorities, hospitals, and universities, are driven by their public and often immovable commitments to end-users and need to ensure their facilities are delivered with date certainty. Under P3 delivery,Edgemoor provides guarantees for the on-time delivery of the asset and is obligated to ensure opening-day is met. The firm has a demonstrated track record of success in this area, having delivered every one of our clients’ projects on-time or ahead of schedule.
On a P3 project, risks are allocated to the partner – public or private – that is best able to price and manage those risks. Edgemoor carefully evaluates and efficiently negotiates those risks to drive better value for our clients over the long-term. Edgemoor’s track record of success in a variety of markets nationwide is proof that a well-thought and executed P3 strategy can yield winning results – for all parties involved.