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The California Strategic Growth Plan
Providing Performance Based Infrastructure (PBI)
Over the last few years a number of nations have been turning to the private sector to help deliver an increasing number of infrastructure projects. By partnering with the private sector, these governments can harness the advantages of technology knowledge, management efficiencies and entrepreneurial spirit with the social responsibility, environmental awareness and job generation concerns of the public sector to leverage and build infrastructure. This partnering approach results in a shared responsibility for the delivery of infrastructure and also when appropriate and cost effective, the service of maintaining and managing those assets. The results are lower initial costs, lower life cycle costs, faster delivery, better service or lower risk and importantly improved customer satisfaction.
Nations such as the United Kingdom (UK), France, Australia, and Canada are all utilizing these partnerships. The UK has procured 221 primary, secondary schools and colleges, 181 hospitals, 62 transportation projects, 36 government buildings, 16 prisons, 9 court facilities and numerous other facilities in this manner. France's highway program and High Speed Train (worth an estimated $58 billion) have been realized because of these partnerships. Australia has built schools, prisons, courthouses, power stations and hospitals using this method. In two short years Ontario, Canada has procured 47 major projects and since 2005 British Columbia has procured nearly $5 billion in projects.
In the United States, the federal government has provided more than $25 billion of high quality military housing at Camp Pendleton and other bases using PBI, leading to higher tenant satisfaction and lower costs. The City of Miami recently approved a new tunnel using PBI to speed goods movement, reduce congestion and improve the environment, and the State of Missouri is in the process of employing PBI for the widespread rehabilitation/replacement of 802 bridges.
While this trend of procurement is still new and growing, governments are consistently reporting successes and benefits in terms of construction savings, faster delivery times and reduced operating costs.
Given the opportunities California has over the next ten years to invest billions of bond funds into our own communities, assurances should be made so that all available means of project delivery, including this partnership approach, are available to our state and local governments including accountability measures to maximize public benefit and service. Not all projects can benefit from this delivery method so to that end, PBI projects will only be undertaken if they can add value or reduce costs.
Broad authorization is proposed for state and local governments in California to use these partnerships for the planning, design, development, finance, construction, reconstruction, rehabilitation, improvement, financing, operation or maintenance of their infrastructure needs. Since all levels of California governments do not have the expertise to undertake this type of procurements, PBI California is proposed to be established to assist in the effort to achieve the best financing, procurement, risk allocation, delivery, operation and maintenance of private partnerships in a performance based approach.
PBI California will provide expertise to manage and implement public-private partnerships and provide the ability for the leveraging of resources and to generate economies of scale. PBI California would contract with governmental entities (local and state) to provide advice on how to enter into, and receive favorable terms from public-private partnerships and act as a repository of knowledge, understanding, expertise, and practical experience in relation to these partnerships. Partnering with the private sector will only be undertaken on those projects that can demonstrate a benefit in terms of cost, delivery time or long-term operational costs.
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