Private Investment in Infrastructure Takes Off

Not since the 19th century, have we seen so much private investment into our public infrastructure. So-called public-private partnerships. Or, private-public partnerships which happen mainly within the energy sector. Most projects happen within energy.

President Obama together with Republican and Democratic governors in every corner of the country have driven this movement with little fanfare.

We have sizable numbers of roads, bridges, broadband, energy production and transmission (traditional and renewable), water and other vital infrastructure being built across the country through partnerships.

The investors in these projects are pensions, insurers, endowments, sovereigns, large companies, and also groups such as private equity and hedge funds which bundle their money.

It is so in vogue that even Apple, Google and Magic Johnson are getting into the public-private and private-public infrastructure game within not only fiber and airports as one would expect, but also energy.

A private developer in Texas is attempting to lay a high speed rail between Dallas and Houston--240 miles in 90 minutes--largely without government money.

An Australian group is laying fiber across Kentucky's rural communities. It will move the state from being the 47th in the country when it comes to speed and capacity.

One private investor is fixing 432 of Pennsylvania's structurally deficient bridges in the state. It is the state with more structurally deficient bridges in the country.

Clean energy projects are happening in spades around the country including Arizona, Georgia, Indiana, Kansas, Kentucky, Maine, Missouri, New Hampshire, Ohio, and Tennessee.

The list goes on.

Importantly, typically public-private or private-public projects work because they have government as partner.

At times, the government partner is very active, as it is with the bridge project. Sometimes, government only sets the regulatory stage for projects to move forward--even then though it's typically proactive.

Regardless, when it comes time to jumpstarting a project or preventing a project from delay or derailment--government with skin in the game is crucial.

Making sure that the government plays just the right role is the art of the partnership.

If you want to participate in these types of projects, or increase your role and effectiveness, do be in touch.