Arkansas Public-Private Partnerships Part 2: History of Public-Private Partnerships (P3s)


It should be remembered that private investment in American infrastructure in partnership with a government is not a new thing in Arkansas or any other state. Throughout the 1800s, in fact, federal and state governments granted lands to railroad companies in exchange for the railroad companies to finance, design, build, and operate railroads lines. However, this arrangement changed. From the 1930s until the present federal, state, and local governments have provided infrastructure needs for states , cities, and counties– bridges, highways, ports, dams, water – with public funding.

Contrary to the US, P3s have been used in Europe for some time now – since the 1990s. American states, including Arkansas, have been slow to enact P3 enabling legislation. Yet, over the past 10 years, with states and local governments’ facing the need for new infrastructure for a growing population and to replace old infrastructure built a 50 years ago, these cash-strapped states and cities turned to the private finance market for P3 infrastructure – the private finance market gives states and municipalities exponentially more access to capital.

California, Florida, and Missouri were the first 3 states to pass P3 enabling legislation in 1989 to 1990. At least 33 states have passed statutes for public-private partnerships as of January 2017. Two notable project examples are the Chicago Skyway O&M P3 in 2004 ($1.83 billion toll road) and New York’s LaGuardia Airport DBFOM P3 in 2016 ($4 billion).

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