Many municipal issuers have been using so-called public-private partnerships (P3) for years. Our perspective is that P3 is a continuum of approaches ranging from the fairly familiar contracting-out and design-build on one end to the less familiar long-lived concessions and outright asset sales.

Filling the gap. In this area we think municipal issuers have a great deal to learn from the experience of their contemporaries in Canada, the UK, Australia and Western Europe where locally-sponsored P3 fill the gap left by the lack of a robust sub-state financing market (particularly one with a tax-exemption afforded to investors, such as the unique US public finance market).

Payment structures. High profile P3 in the U.S. have typically taken the form of availability payment structures, typically coupled with design-build-finance project delivery, or concession agreements which are typically based on design-build-finance-operate-maintain or finance-operate-maintain project delivery.

New focus. The early use of availability and concession P3 structures in the US was primarily driven by the desire or need for significant amounts of upfront cash. In recent years, P3 use has begun to be more nuanced and focused on a combination of risk mitigation and a lack of resources with which to invest in capital maintenance or expansion.

Holistic approach. Columbia Capital assists public agencies evaluating the potential benefits of P3, assessing their risks and developing frameworks to compare P3 project delivery to more traditional forms of financing projects. Using the cross-disciplinary breadth of our staff team, we bring a holistic approach to evaluating P3 focused on ensuring the public in public-private partnerships is properly represented.