Data Analysis: Municipality-led PPPs in the US
Of the total 37 ongoing infrastructure PPP procurements in the US (as at 26 July 2016), 21 are being led by cities or municipalities as opposed to 16 projects which are being procured by state level authorities, according to IJGlobal data.
The increase in the number of municipal- or city-led PPP transactions in the country reflects a shift in terms of types of projects being procured. Historically, the majority of infrastructure projects in US have been transport-related, while the country's first social infrastructure project (Long Beach Courthouse) only reached financial close in 2010 and the first major water project (Carlsbad desalination) followed in 2012. There are still 113 surface-level transport projects pre-financial close in the US today, but the total number of social and water infrastructure deals is catching up at 58.
Social infrastructure PPPs are often procured by local authorities at the city or municipality level. By using the PPP mode of procurement cash-strapped municipalities are able to tap into private sector capital and expertise for new builds and upgrades of city infrastructure.
The $490 million Long Beach Courthouse project was procured by a local body in Long Beach, following which the City of Long Beach itself began procurement for the $520 million Long Beach civic center PPP that reached financial close in 2016.
States like Arkansas and North Dakota are now procuring their first PPP projects, and in both instances local authorities are leading those deals.
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