Subnational Public-Private Partnerships
Meeting Infrastructure Challenges
This report focuses on the challenges of governing infrastructure investment and public-private partnerships (PPPs) at the subnational level. Subnational governments – cities and regions – play a vital role in the infrastructure landscape. Infrastructure needs in energy, transport, water and telecommunications are substantial, estimated at USD 6.3 trillion per year between 2016 and 2030. In a tight fiscal environment, it is critical to diversify sources of financing for infrastructure investment and PPPs represent an alternative to traditional government procurement with the potential to improve value for money. However, PPPs are complex and sometimes risky arrangements that require capacity that is not always readily available in government, in particular at the subnational level. This report examines the challenges of using PPPs at the subnational level and ways to address them. It does so by focusing on three case studies: subnational PPPs in France, local Private Finance Initiative (PFI) projects in the United Kingdom, and PPPs in Virginia (United States).
Public-private partnerships for infrastructure at the subnational level of government: Opportunities and challenges in the Commonwealth of Virginia, United States
This chapter presents a case study of public-private partnerships (PPPs) for infrastructure development in the state of Virginia, United States. As one of the first US states to enable PPP procurement, Virginia’s more than 25-year history with PPPs and their governance provide a unique opportunity to study subnational governments’ challenges and success factors in practice. The case study focuses in particular on five categories of challenges: (i) Intergovernmental regulatory coherence; (ii) Financial risks; (iii) Cross-jurisdictional co-ordination; (iv)Administrative capacity and (v) Accountability and transparency. The case study concludes with a summary of Virginia’s major PPP drivers, challenges, and success factors, along with a discussion of lessons learned that can inform other subnational governments.