A 10 Point Public-Private Partnership Plan for National Economic Recovery in the USA

Public-Private Partnerships (PPPs) have tremendous potential to help the United States recover from the negative healthcare impacts of the Covid-19 pandemic as well as its disruptive impacts on the national economy.

Carefully conceived and well-structured PPPs have the potential to foster long-term innovative contractual partnerships between the public and private sector that enable a collaborative process where both parties can creatively leverage their resources to launch sustainable and resilient projects that each party could not accomplish on its own.  It also allows the mobilization of alternative financing for cash-strapped public sector initiatives. Additionally, PPPs allow risk sharing where risk is allocated to the party that has the best resources to manage risk (see De-Risking PPP Projects in a Pandemic Prone World - https://www.dhirubhai.net/pulse/de-risking-projects-pandemic-prone-world-david-baxter/).

Although the incentive for PPPs should focus on national recovery, financial reward incentives for delivery and performance should be allowed, as long as this does not result in nationalization of debt and privatization of profit where no parties win.  

Before exploring PPPs potential further, it is important to note that the PPPs that I am referring to are not to be confused with the paycheck protection program (the other ppp) which does not result in partnerships, does not deliver long-term tangible results, and which only increases the national debt.

A comprehensive national PPP program tied to national recovery strategies that the incoming Biden administration is contemplating should reach across state boundaries and be politically neutral.  The overall objective should be simple and have two goals.  The objective of national economic recovery should focus on two mitigating objectives – fixing the healthcare impacts of the Covid-19 pandemic in the first place, and in the second place it should mitigate the economic impacts to all states through projects that can help with their economic recovery.  

Even before the pandemic there were concerns about the long-term viability of the U.S. economy vis-à-vis its vulnerability to aging infrastructure (highlighted by numerous ASCE infrastructure health reports), susceptibility to catastrophic events, the ever-increasing infrastructure funding gap, and the needs to introduce innovations that could enhance the need to improve digital and trade infrastructure in a globalizing economy that is increasingly becoming more competitive. Unfortunately, the last four years have seen numerous failed “national infrastructure weeks”, the asinine politicization of infrastructure agendas, and paralysis at the national corridors of power on decisions outlining a path forward.

The Covid-19  pandemic has revealed the foolhardiness of leadership inertia and the need to break the log-jam (no matter your party affiliation) that threatens to perpetuate economic underperformance and servitude to future catastrophic events. 

I propose the following 10 Actions:

Strengthening of (a) National PPP Advisory Unit(s)

The U.S. is one of the few advanced economies that does not have a national PPP unit.  There are numerous state PPP units and federal agencies with PPP divisions that offer PPP policy and guidance.  Unfortunately, our national obsession with state rights has resulted in these institutions making siloed decisions that are focused on their own initiatives and priorities. It is time to encourage these units to collaborate under a national advisory PPP Unit that can focus on national recovery priorities while at the same time enforcing state priorities and capabilities at the same time.

Additional Reading:

PPP Units as Champions and Gatekeepers of Post Pandemic Project Pipelines - https://www.dhirubhai.net/pulse/ppp-units-champions-gatekeepers-post-pandemic-project-david-baxter/

Creation of a National PPP Advisory Steering Committee 

It is time that PPP leaders (from the public and private sector, academia, and professional associations) form a National PPP Advisory Steering Committee that can advise all stakeholders on how to implement an inclusive and collaborative national PPP program that addresses the implementation of PPP best practices, policies, and guidance that is harmonized across all states. This would result in PPP practices that are uniform across all states. This national steering committee should work closely with a national PPP unit.

Strengthening of State and National PPP Enabling Environment 

The National PPP Unit and its national steering committee should collaborate to standardize national and state PPP laws, regulations, policy, guidance and practice so that a national PPP enabling environment (framework) is created that is harmonized with state enabling environments.  This would ensure that investors and developers who are supportive of national recovery programs have a common legal reference regarding the implementation of PPPs.

Identification of Coordinated Short-term, Medium-term, and Long-term PPP strategies for Economic  Recovery 

There are unique short-, medium-, and long-term strategies that each state has identified for its economic recovery.  Short- and medium-term strategies are focusing primarily on strategies that create collaborative partnerships that address pressing Covid-19 recovery actions, especially in the area of healthcare infrastructure and logistics.  Additional medium- and long-term strategies that focus on building sustainable and resilient infrastructure and providing desperately needed social services could follow.  If  planning of these activities at state level is coordinated with a national PPP unit, a cohesive national strategy could also evolve that would be well-placed to support state government initiatives in the future should another Covid-19 scale pandemic or national catastrophe reoccur. The strategies should also focus on how the public and private sectors could collaborative mobilize resources for prioritized projects that support economic recovery.

Additional Reading:

The Need for Sustainable PPP Recovery Strategies in a Post-Covid-19 World - https://www.dhirubhai.net/pulse/need-sustanable-ppp-recovery-strategies-world-david-baxter/

Performing Project Triages to Identify Economic Recovery PPP Pipelines

The reality is that there are not enough resources to implement every PPP project that is needed.  The public and private sectors have a finite number of resources and because of this it is critical that state and national entities identify priority projects that will contribute cumulatively to national economic recovery.  This means that a triage will have to be undertaken of existing and planned PPP projects to identify candidate projects that will best contribute to economic recovery.  Because no state’s economy exists in isolation of its neighbors, collaborative regional and national reviews of critical recovery projects would be a boon, as long is the decisions do not result in economic hardship for less “influential states”.  State pipelines, rolled up into national pipelines of commercially and economically viable projects that are bankable, which have the support of public and private sector leaders, and which are aligned with national recovery strategies will attract serous private investors who are interested in long-term projects and viable PPP programs.

Additional Reading:

The Need for a Covid-19 “Triage"  Recovery Strategy for National PPP Initiatives - https://www.dhirubhai.net/pulse/need-covid-19-recovery-triage-national-ppp-david-baxter/

Promotion of Inter-State and International Economic Recovery PPP Projects

No state or country exists in economic isolation of its neighbors.  This is particularly relevant in the rapidly globalizing world we live in.  The implementation of trans-state and transnational PPP projects are becoming increasingly common, but are particularly difficult because of different laws, competing priorities, and different financial systems.  It is therefore important that a (a) trans-state commissions and a (b) transnational  commission be established to address these PPPs. A national PPP Unit could host and convene these two commissions and advise on the complexities and competing priorities of trans-state PPP projects (within the USA) and transnational PPP projects between with Canada and Mexico.  A transnational commission should also engage diplomatic institutions (i.e. national embassies, trade commissions and departments of state), chambers of commerce, and industry associations to facilitate transnational PPP projects. This collaboration would also facilitate projects that would facilitate regional economic recovery as well.

Additional Reading:

Transnational PPP Infrastructure Projects in Africa – Challenges, Risks, and Opportunities - https://www.dhirubhai.net/pulse/transnational-ppp-infrastructure-projects-africa-risks-david-baxter/

Standardization of PPP Procurements

Procuring PPP projects are difficult and challenging.  It makes no sense to make  it more difficult by having over 50 state and territorial procurement guidelines.  A standardized national procurement practice (that recognizes individual state laws) that leans heavily on international procurement best practices would incentivize private sector sectors investors who are leery of navigating complex procurements which differ between states. A customized, yet harmonized national procurement practice would allow the smooth implementation of PPPs that are supportive of economic recovery as well. It is also increasingly important that force majeure terms in contracts are also standardized so that flexible contracts can evolve that address national calamities in the future.

Additional Reading:

Pandemics, PPPs and Force Majeure - https://www.dhirubhai.net/pulse/pandemics-ppps-force-majeure-david-baxter/

Competitive and Transparent Procurement of PPP Projects

In order to avoid accusations of procurement impropriety (especially in the current highly charged U.S. political environment) and the potential of nefarious and corrupt practices, it is important that competitive and transparent procurements become the norm.  Through the implementation of competitive and transparent procurements, governments can ensure that PPP “value for money” is assured and that only high-quality projects are awarded to highly performing private sector partners who can deliver quality projects on time and within budget.  It is important that state and national procurement policies are reformed where necessary to reflect these requirements.  Particular attention should be given to unsolicited proposals that can serve a purpose, as long as they are not used to circumvent procurement best practices.  A national PPP Unit could serve as a consultative body on competitive and transparent procurement best practices.

Additional Reading:

Response to WEF's Community Paper on Unsolicited Proposals for the Development of Infrastructure - https://www.dhirubhai.net/pulse/response-wefs-community-paper-unsolicited-proposals-david-baxter/

People first PPPs (PfPPPs)

The Covid-19 pandemic has resulted in a refocusing on why we do PPP projects.  A new paradigm for PPPs; People first PPPs (PfPPPs) addresses many current concerns about the role of PPPs in national economic recovery strategies. Due to the economic distress that people have experienced, it is essential that national recovery PPP projects focus not just on “value for money”, but also on “value for people,” and “value for the future”.  PPP projects should be seen as tools for economic growth, realization of Sustainable Development Goals (SDGs), and economic recovery.  PfPPPs guiding principles that have been developed by the United Nations Economic Commission for Europe’s (UNECE) PPP Center of Excellence serve as an excellent reference for the implementation of meaningful, resilient, and sustainable PPP projects that also consider environmental factors as well (see - https://www.unece.org/ppp/forum2018.html.)

The World Association of PPP Units and Professionals  (WAPPP) steering committee (of which I am a member) serves as a champion of PfPPPs as a national recovery mechanism (see  - https://wappp.org/).

Future Proofing of PPP Projects.

PPPs projects can last 30+ years.  Therefore, it is becoming increasingly important in a world with global uncertainties, that PPP projects are future proofed.  PPP Projects need to be initiated that consider sustainability, resilience, and regeneration.  In a world of increasing demand on the finite resources of the public and private sector, it is essential that we develop projects that are sustainable, resilient, and regenerative (future proofed).  This will lead to projects that are long-lasting, do not become a drain on national resources, and which can withstand future national calamities.  We need to move away from the 30-year PPP project lifecycle mindset and innovate how we proof against the future, especially in the area of technological obsolescence.  This will require the increasing adoption of smart technology and the implementation of projects that will leap-frog economies into the future (i.e. smart cities, digital infrastructure, renewable energy etc.). The International Sustainable Resilience Center (see - https://ippprc.org/) is a champion of future proofed projects and is located in the USA.  It could become a leading advisor for economic recovery initiatives launched at state and national level.

Additional Readings:

World Bank - Regenerative PPPs (R+PPP): Designing PPPs that keep delivering. https://blogs.worldbank.org/ppps/regenerative-ppps-rppp-designing-ppps-keep-delivering

World Bank - 2018: Are we ready to commit to building resilient infrastructure? https://blogs.worldbank.org/ppps/2018-are-we-ready-commit-building-resilient-infrastructure

World Bank - Future-Proofing Resilient PPPs https://blogs.worldbank.org/ppps/future-proofing-resilient-ppps

Conclusion

Although I have only provided 10 actions, there are many more that could be listed.  I hope that this serves as a starting point for an urgent and coordinated national PPP plan that is supportive of the national economic recovery of the U.S.A.