Many examples of positive public-private partnerships can be demonstrated across all sectors, showing that this kind of arrangement is something that works well for everyone involved. Every P3 project should be mutually beneficial, combining the strengths of the private business entities with the strengths and resources of every public participant. When you choose the right project, a public-private partnership can be a fantastic opportunity for your organization.
CIOs and CTOs are responsible for the tech involved in creating a successful P3 project. Our examples here show the many different scenarios in which a CIO or CTO might be involved, and how these projects turned out positively. It should leave your organization feeling inspired and ready to learn more about how a P3 project might look for you.
The Canada Line
The Canada Line is a rapid transit line that connects Vancouver International Airport with two cities in British Columbia, Canada. From the start, the provincial government intended this as a public-private partnership. It is a P3 with Canada Line Rapid Transit Inc., the public party, and InTransitBC, a private joint venture.
The federal government funded the project with $450 million, with $252 million from British Columbia, $30 million from the City of Vancouver, $720 million from the private consortium, $333 million from the Greater Vancouver Transportation Authority, $259 million from the airport authority, and $5 million from the sale of a multistory car park.
The private companies are responsible for the risk of construction and ridership. The public entities are responsible for setting and collecting fares, and operational guidelines. With a 35-year operation period, InTransitBC will recover its commitment and receive performance payments to cover operating and maintenance costs as well as provide a return on investment.
Detroit Metro Region Freeway Lighting
This 2017 project came about as many freeway lights in the Detroit area were not functioning properly, hindering safety and visibility as well as operating without energy efficiency. The Michigan Department of Transportation entered into a public-private partnership with Freeway Lighting Partners to replace around 15,000 lights. It was the first P3 on freeway lighting in the United States.
Michigan Department of Transportation did not have the budget to replace lights despite it being a safety priority. Freeway Lighting Partners provided the financing, for which MDOT will pay two $6 million payments along with quarterly service payments throughout the 13-year operation and maintenance phase. MDOT received $79 million in federal funding to help cover this cost.
Crescent Moon/Red Rock Crossing Recreation Area
In Arizona, Recreation Resource Management operates this public recreation area. They have done so since 1994, when the US Forest Service handed over operations to the company in a public-private partnership.
RRM provides the private capital needed to refurbish and run public recreation areas, re-investing some of the profits back into the park it operates. In a comparison report, the privately-operated park came out ahead of a publicly-operated park nearby. The state-operated park loses money for Arizona, while the P3 park generates nearly $45,000 a year for the Forest Service. The P3 park is required to use revenue from the park and other contracted sites to operate a visitor information site.
Illinois State Lottery
In Illinois, the state lottery has been managed by private entities since 2010. It began with a contract to Northstar Lottery Group, which retained control over the state’s lottery games for ten years. Illinois was the first state to privatize like this, entirely handing over management and marketing while retaining ownership and regulatory oversight.
The state again awarded a ten-year contract to Camelot Illinois in 2017, having ended the Northstar deal early. Camelot’s contract included a promise to invest $15 million into revitalizing the lottery, while receiving a $25 million annual base management fee and incentive bonuses. The more the company increases lottery profits, the bigger the bonuses.
Long Beach Civic Center
The Long Beach Civic Center public-private partnership allowed the City of Long Beach to produce a redeveloped civic center, including a new city hall, library, park, parking facilities, and port headquarters, at a lower cost than the previous rate to use and maintain the existing facilities. In turn, Plenary Properties Long Beach created a complementary private development and will manage operations and maintenance of the entire center.
The project is contracted with a 40-year concession period. It did not require any tax measures or voter approvals because of the P3 approach.
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