PFG works to maximize public sector benefits when using Public-Private Partnerships (P3) for developing government facilities on behalf of Public Agencies. We use the New American Approach because it offers the best of public sector real estate development and combines it with private sector expertise. It also offers private guarantees to both cost and schedule, as well as built in safeguards which allow the public to secure ultimate project control if they desire to do so.
When contemplating P3 delivery of Social Infrastructure, also known as real estate development, there are four key principles to consider and eight steps to follow:
Four Key Principles
1. The Use of Tax-Exempt Debt
Tax-Exempt debt offers lower interest rates and therefore is significantly less expensive than private financing.
2. The Use of Private Development
Private Developers who build for themselves or for clients must work efficiently and know how to control costs.
3. The Careful Alignment of Risks and Rewards
The partners must be paid fairly for what they bring to the project, but should not be rewarded for that which they do not.
If the Public Agency pays all of the costs, it should have rights equivalent to ownership.
The New American Approach fully embraces these four principles and successfully combines private sector expertise with tax exempt debt. It offers the public the most efficient and the least costly option for developing and maintaining social infrastructure. It avoids the risks characteristic of public development and the inconsistencies typical of public maintenance.
A well-structured public-private partnership can achieve cost savings between 20% and 40% when compared to conventionally delivered public projects.
Our New American Approach can be divided into eight steps. Watch the video below for an animated explanation: