"We have 38 million people in the state, and we don't have great infrastructure," says David Crane, special adviser Gov. Schwarzenegger on economic and job matters. "We should have the greatest rail system, the cleanest water treatment plants in the country and we don't. Californians have grown accustomed to accepting this, but they deserve better."
State-of-the-art infrastructure is vital to California's economic sustainability, and public-private partnerships are the most viable method of delivering many public services because they lower costs and shorten timelines, Mr. Crane says.
While public-private partnerships are still a relatively new concept in the United States, British Columbia has been using the P3 model for several years.
Since 2002, British Columbia has pumped nearly $10 billion (Canadian; US$8.1 billion) into infrastructure financing – 50 percent of it supplied by the private sector. The province has been at the forefront of the Canadian scramble to team the public and private sectors – making the country a world leader in its pursuit of P3s – with projects from Alberta to Ontario, Quebec, and Newfoundland.
Larry Blain, head of the provincial arm that assesses the viability of each project in B.C., says one of the overriding benefits of these ventures is transferring taxpayer risk to the private sector.
"These projects are at the low end of risk, and they're very attractive investments for pension funds and life insurance companies," says Mr. Blain, chief executive officer of Partnerships BC. Private companies not only assume risks associated with design but with project construction, he adds.
