Photo: Tony Salas | Flickr Creative Commons
In my home state of California in the United States, major drought-fueled wildfires tore across the state in the latter half of 2017 setting records for both the state’s deadliest fire, as well as the largest fire. Wildfire season is back in 2018 with the most destructive year ever—currently more than 13,000 firefighters are battling 9 large blazes that have damaged or destroyed over 2,000 homes or buildings and scorched over 730,000 acres of land.
The Mendocino Complex fire in Northern California recently broke the state’s previous record for largest fire, spreading furiously due to heat, wind, and years of drought.
California’s Governor Jerry Brown said this is becoming the new normal…where fires threaten people’s lives, property, neighborhoods and, of course, billions and billions of dollars. Many point to climate change as the driver for weather conditions fueling most of the wildfires. July was the hottest on record for the state, and extreme weather is causing larger and more destructive fires across the whole western United States.
Welcome to the “10 Candid Career Questions” series, introducing you to the PPP professionals who do the deals, analyze the data, and strategize on the next big thing. Each of them followed a different path into PPP practice, and this series offers an inside look at their backgrounds, motivations, and choices. Each blogger receives the same 15 questions and answers 10 or more that tell their PPP career story candidly and without jargon. We believe you’ll be as surprised and inspired as we were.
Photo Credit: Kathleen Bence via Flickr Creative Commons
I’ve been looking for a good definition of social enterprise. The information overlords at Google and Wikipedia suggested this:
“A social enterprise is an organization that applies commercial strategies to maximize improvements in human and environmental well-being—this may include maximizing social impact alongside profits for external shareholders.”
That’s a pretty broad and somewhat unsatisfying definition. I mean: “What organization in the 21st century wouldn’t put human and environmental development, social impact and profit high on their agenda?” – (He asks naïvely.)
Infrastructure professionals think a lot about social enterprise, but in a slightly different way. There is of course the unrelated term “social infrastructure,” which broadly covers public services such as healthcare, education, leisure and other government services. But really what we think about when it comes to social enterprise is “infrastructure morality.”
Photo Credit: Mark Anderson via Flickr Creative Commons
If you live in urban areas – which, according to the U.S. Census Bureau, over 80% of Americans do – you know the feelings associated with traffic. Busy roadways and overcrowded public transit lines are just some of the many consequences of the increased need for infrastructure investment in the U.S. To grow sustainably, cities must continue to make major investments in infrastructure – across healthcare, transportation, utilities, buildings, energy and even within our industrial base.
I recently had the chance to get to know dozens of forward-thinking, dynamic individuals from the public and private sectors. Despite their varied backgrounds, resumes, and perspectives, they shared one thing in common: they have all been influential in shaping the Asia Pacific PPP landscape. Our gathering was part of the IFC PPP Transaction Advisory Services Unit’s four-day Senior Training Program on PPPs and Project Finance, in collaboration with the Harvard Kennedy School in Singapore.
All of the participants – government representatives, donors, private sector clients, World Bank and MIGA staff, as well as senior IFC staff -- offered a different view on how best to combat today’s global PPP challenges. We captured a few key insights from the training program to share with others:
Editor’s Note: Renowned engineer and historian Henry Petroski, author of the just-published The Road Taken: The History and Future of America’s Infrastructure, has a unique perspective on public-private partnerships (PPPs). He spoke to the PPP Blog about why the U.S. is at a much earlier stage of PPP development than the rest of the world, how America’s infrastructure PPPs are different than other countries’, and which European PPP models are influencing American progress. It’s an especially timely issue for PPP Blog readers who were reminded of the state of American infrastructure by the sudden closure of the Washington, DC Metro (subway) system earlier this month.
Q: Why is the U.S. so much “younger” than the rest of the world when it comes to PPPs?
Henry: In the U.S. during the 19th century, almost all our large infrastructure projects, like railroads, were created through private investment. If someone wanted to build a bridge, a corporation would be formed, find financing, and proceed on that basis. Owners might need a government concession so that they could put the bridge where they wanted, but aside from that it was a purely private enterprise. The Ambassador Bridge, which has linked Detroit, Michigan, and Windsor, Ontario, since 1929, is a good example; it was privately financed and remains wholly privately owned.
To gain a better understanding of how innovation in public-private partnerships (PPPs) builds on genuine learning, we reached out to PPP infrastructure experts around the world, posing the same question to each. Their honest answers redefine what works — and provide new insights into the PPP process. This is the question we posed: How can mistakes be absorbed into the learning process, and when can failure function as a step toward a PPP’s long-term success?
Our seventh response in this eight-part series comes from Robert Puentes, Senior Fellow with the Brookings Institution's Metropolitan Policy Program.
In the U.S., one of the best learning tools for places wishing to engage in PPPs for infrastructure has been past mistakes. From the parking meter deal in Chicago, to Virginia’s Pocahontas Parkway, and a handful of others, American cities and states pay close attention to one another and are loathe to repeat previous problems.
But going forward, institutionalizing such learnings requires a dedicated team. Indeed, assembling a group with the right mix of finance, legal, policy, and communications experience is critical to the success of any PPP project. Public sector agencies looking to procure a limited number of PPP projects or engaging in their first, often use outside advisors for most of these services. This can be a successful strategy as long as public sector decision makers remain in control of the process.
If the thought of summer conjures up visions of national parks, you’re not alone – in 2014, nearly 3 million tourists visited forests, mountains, trails, and rivers at U.S. national parks.
If you crossed the gate into one of these treasures, you probably didn’t care whether that particular forest or mountain fell under government or private ownership. But it’s worth noting, because national park concessions fill a vital role helping the National Park Service carry out its mission, and there are benefits to these partnerships that can keep the parks viable — and the visitors happy — for decades to come.
There are also misconceptions about national park PPPs. To clear the air, I’ve answered some of the most common questions below.
There appear to be several discrete, but related, reasons why the U.S. has been slow to pursue PPPs in comparison with European and Asian countries:
- In some cases, there is a lack of consensus, institutional capacity, and expertise to properly promote the benefits and costs of PPP deals. In Pittsburgh, for example, an arrangement to lease the city’s parking operations to a private entity collapsed when the city council voted against the transaction.
- Deals are getting more complex, politically heated, and cumbersome as some stretch across jurisdictions and even international borders, as is the case with the New International Trade Crossing intended to connect Detroit to Windsor, Ontario.
- With state and municipal finances under strain, the public sector is trying to transfer greater responsibility to the private sector, including in the arena of project financing.