Upload
gladys-peters
View
215
Download
1
Tags:
Embed Size (px)
Citation preview
Public-Private Partnerships And Protecting the Public Interest
Preliminary Questions & Issues
Steve CohenAssistant Director
U.S. Government Accountability Office
Northern Border Finance ConferenceChicago, IL
May 16, 2007
2
Topics
• What factors drive consideration of Public-Private Partnerships?
• What work is GAO doing?
• What issues relate to achieving public objectives and protecting the public interest?
3
What factors drive consideration of PPPs?Mobility and financing challenges
• Mobility challenges• Congestion increasing rapidly • Population and freight projections
• Transportation financing challenges• GAO high risk area• Revenues not keeping pace• Traditional revenue sources may not be sustainable
• Long term fiscal challenges limit options
4
What factors drive consideration of PPPs?Long-Term Fiscal Challenges
• Imprudent and unsustainable fiscal path
• Known demographic trends and rising health care costs
• Unsustainable deficits and debt
5
What factors drive consideration of PPPs?Long-Term Fiscal Challenges
Source: GAO’s January 2007 analysis
0
10
20
30
40
50
2006 2015 2030 2040Fiscal year
Percent of GDP
Net interest Social Security Medicare & Medicaid All other spending
6
What factors drive consideration of PPPs?Advantages Generally Cited From Public Perspective
• Accelerated project delivery--projects built sooner
• Access to capital
• Transferring of risks (financing, construction, market, O&M, availability)
• Private sector efficiencies in construction and operations
• Defined operation and performance levels and timely upgrading and replacement of assets
7
What factors drive consideration of PPPs?Trade-Offs: GAO’s 2004 PPP Report
• Political accountability and control • Relinquished control over toll rates in some cases• Non-compete agreements reduced ability to improve some
public roadways
• Financial trade-offs• Varying degrees of public subsidy in both for-profit and non-
profit projects• Foregone tax revenue in non-profit projects• Certain financial responsibilities should private venture fail
(e.g., operations and maintenance)
8
What Work is GAO Doing?PPP request from Congress
• Bipartisan congressional request • Senator Inhofe, Environment & Public Works Committee• Rep. DeFazio, House Transportation & Infrastructure Committee,
Subcommittee on Highways & Transit• Senator Durbin, Senate Appropriations Committee
• Research objectives 1. PPPs and the objectives/factors that contributed to their use 2. Challenges private and public partners face3. Results and outcomes--how public benefits are achieved and the
public interest protected4. The federal role
9
What Work is GAO Doing?PPP request - Scope and methodology
• Literature review of US and overseas experiences
• Interviews with • U.S. DOT and state project sponsors• Financial and legal consultants• Market and industry analysts
• Site visits/Project case studies• Indiana • Spain• Australia
• Texas • Oregon • Toronto
• Chicago
Report to be issued October 2007
10
What Work is GAO is doing?Related GAO work
• Railroad Bridges and Tunnels; June/July 2007 Options for financing bridge and tunnel projects, including PPPs
• Efficient Use of Existing Infrastructure; July 2007 Congestion mitigation techniques and actions to use infrastructure
efficiently
• State Contracting Practices; October 2007 Trends in state practices including innovative contracting/PPPs
• Freight Bottlenecks; November 2007 How freight bottlenecks are being addressed, including PPPs
11
Key Questions For Protecting Public Interest
• How do we define the public interest?
• What are the key questions?
• Performance• Financing• Accountability
• What is the federal role?
12
Key Questions For Protecting Public Interest Performance
• What performance standards does the public require?• Construction• Operation• Maintenance• Traffic/congestion• Expansion
• What metrics are we using to measure the success of PPPs?
• How should effective monitoring and oversight mechanisms be structured and at what cost?
13
Key Questions For Protecting Public Interest Financing
• How are tolls set and by whom?
• What level of public support (tax or otherwise) is acceptable and prudent?
• What responsibility does the public have for upside or downside extremes (e.g. preventing “excess profits”)?
• What responsibilities does the public have should the private venture fail?
14
Key Questions For Protecting Public InterestAccountability
• What is the appropriate term for a long term concession?
• How do we protect the ability of public entities to operate an interconnected roadway “network”?
• How do we protect the ability of public entities to build and operate additional (potentially competing) facilities?
• What critical skills sets need to be maintained by public institutions?
• What ability should public and private partners have to revisit the agreement over several generations if conditions and circumstances dramatically change?
15
The Federal RoleIssues
• Federal stewardship responsibilities• National defense, interstate commerce, homeland security• protecting the national investment in the system to date • goals of the federal program (e.g. economic growth, enhanced
mobility, system performance)
• Future roles and initiatives
• The need for reexamination—getting the big picture right
16
The Federal Role Fiscal Crisis Requires Fundamental Reexamination
• Clear federal role and mission?
• Outcome-based performance measures?
• Targeting investment toward greatest needs and return?
• Encouraging investment from other stakeholders?
• Best tools and approaches?
• Affordable and sustainable?
17
The Federal Role Framework For The Future?
• A comprehensive vision for a national transportation network
• Reexamination and potential realignment of the roles of federal, state and local governments and that of the private sector
• A financing scheme that leverages resources to optimize performance, meet goals, and achieve results.
Protecting the Public Interest inPublic-Private Partnerships
Preliminary Questions & Issues
Questions?
Steve CohenAssistant Director
U.S. Government Accountability [email protected]