Engineering Inc - November/December 2017 - 26

"P3s should not be viewed strictly as a financing tool.
There are other reasons to use this approach, including
improving project quality and lowering costs."
BRIAN MIDDLETON | JACOBS ENGINEERING

direct jobs and 19,000 indirect jobs, according to the president's
"Emergency & National Security Projects" report.
Many in the A/E industry are supportive of the presidential focus
on infrastructure, even though Trump's plan lacks critical details
about how to move P3s forward. "All the discussion about P3 projects will likely accelerate the use of this methodology," Weintraub
says. "It's now on the front burner and far more visible."
In a best-case scenario, the projects can result in net tax savings
to the public and greater efficiencies. "Many of these projects shift
the focus from upfront costs to paying over 30, 40 or 50 years,"
Weintraub says. In many cases, they also introduce more consistent
maintenance schedules.
Shah says that while there's now an urgent desire to "get the dirt
moving," it's vitally important to prioritize projects and for various
constituencies to work together effectively. If projects run into permitting problems, project management issues, miscommunications,
breakdowns, cost overruns and other failures, P3s will suffer over
the long run.
"We really need to understand which projects should go first
and what is truly defined as shovel ready," Shah says. "We have to
understand the economic impacts, job creation issues and ensure
that there's coordination across agencies so that we avoid problems with utilities and other infrastructure."
There's also a need to look for more creative ways to structure
and fund P3 projects, including hybrid methods that use different
income sources and variable fees, according to Segal. For example,
a project might be partially funded through a traditional tax-
such as a sales tax or gas tax-but also include a modest toll. This

approach could help balance political and practical issues as well
as diffusing overall risk by reducing reliance on any single source.
"You essentially buy down the tolls by applying these other revenue streams," he explains.
Finally, Shah says that A/E firms must think differently about
these projects, including risk exposure and the financial framework. For instance, as technology becomes more pervasive, infrastructure becomes more than mere engineering and construction.
"If the private sector develops an asset, there's a greater likelihood of embedding sensors into roads and other infrastructure.
There's the ability to measure usage and efficiency. Ultimately, it's
possible to collect this data, manage the data and unlock the value
embedded in the data.
"The tolls collected on a road may pale in comparison to the
value of the data that's collected and sold to government agencies
and other companies," Shah says. "It's important to think about
how these projects can create alternative revenue sources."
In the end, perhaps only one thing is certain: There's a growing
recognition that U.S. infrastructure requires a massive upgrade
and P3s have a role to play.
"We have to recognize that this is a different model for building and operating projects," says Middleton. "P3s are not ideal
for every project or situation, and they require new and different
skills from construction and engineering firms. But the concept
is viable. It offers a proven way to address today's infrastructure
requirements." n
Samuel Greengard is a technology writer based in West Linn, Oregon.
The $4 billion terminal construction at New York's LaGuardia Airport is an
example of a large-scale transportation P3 initiative in the U.S.

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