What are the key issues and challenges the US P3 market faces in 2014?
A number of key issues have existed for the last five years; namely that there is no common federal strategy on P3’s and there are varied views across the states on their use. Fewer than twelve states have truly embraced P3’s and fewer than six states have successfully let more than three projects.
Whilst a majority of states have some form of P3 legislation, it is either time limited, sector limited or project limited. There is an absence of dedicated state agencies to act as the center of excellence outside of those twelve states referred to above.
The challenges faced in 2014 will include lack of available public funds for infrastructure development. Withdrawal of P3 project offerings by any level of government during the qualification and proposal stages serves to undermine market confidence.
A positive indicator for 2014 is; for the state transport departments which have embraced P3’s there is a reasonable pipeline of road projects. Seven P3 projects are currently in the shortlisted phase, suggesting that a greater number of projects will reach financial close in 2014. This will build on 2013, when fewer than five P3 projects will reach financial close.
LeighFisher’s outlook on the market remains cautiously optimistic, with three current US P3 projects under advisement. We look forward to further development of US transportation projects and hope that social infrastructure projects such as Long Beach Civic Centre will become more prevalent.
For the views of the wider industry please see the inaugural edition of P3 Bulletin, published in November.