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It’s a model that’s been popular with Mayor Bloomberg and name-checked by President Obama in the State of the Union: public-private partnerships. The arrangement helped build city monuments like Grand Central Station. Now there is a new approach: private money will team up with taxpayer funds to improve the most basic government services–schools, roads. Max Rosenthal has the details.
Private investors have pitched in to build some of the of the city’s most famous new attractions:
Citi Field, Yankee Stadium, Barclay’s Center, the entire Midtown West project is a public-private partnership.
That’s Joel Moser, a professor of international affairs at Columbia. He and other experts say that the partnerships, or “P3s” offer governments a way keep paying for the construction they need. Michael Likosky is one of the country’s leading experts on P3s. He says that the approach lets the city take advantage of private sector flexibility.
P3s allow projects to go forward, to get completed faster and it broadens the number of projects one can do.
These days, the projects aren’t limited to stadiums or skyscrapers. New York’s growing population and aging infrastructure means that even bigger bills are on the horizon.
In order to do what we want to do in terms of more high-tech jobs, more manufacturing jobs, we really have to drive down the cost of doing business in the city and in the state. And P3s are the main way that that can happen.
Other big cities like London have already started using private companies to fund basic public needs like water.
It’s worked so far, but it’s not without risk. Private companies save the city money by building the projects themselves, but they expect to make money from the deal. Biser says that can be difficult when talking about something like a bridge.
Suppose you enter into an agreement today and you allow the tolls to rise at a certain rate based on certain indexes. You can end up with a toll that is totally unacceptable to society. And therefore the private sector made a deal and they need to get their money back, but it doesn’t fit necessarily with the public good.
This is not philanthropy. This is a business deal. You’re trying to make an investment in the community.
Rick Norment is the Executive Director of the National Council on Public Private Partnerships. He says that Mayor Bloomberg’s push is a big part of the reason P3s are growing in the city.
It’s critical in public-private partnerships to have strong leadership from the public sector.
And that leadership should continue after Bloomberg steps down next year. With public money still in short supply, New Yorkers can expect more P3s in the coming years no matter who is running the city.
Max Rosenthal, Columbia Radio News