Public-private partnerships and infrastructure investment
July 21, 2009

The summer issue of the Minneapolis Federal Reserve Bank magazine includes an interesting article on the use of public-private partnerships to pay for infrastructure. The article addresses two major conclusions of the available research: First, that American government agencies have been much slower to adopt public-private partnership mechanisms than their European counterparts. More important is the observation that many American agencies appear to be using public-private partnerships to cover short-term budgetary gaps rather than to provide incentives for ongoing maintenance and upkeep. The problem with many major civil-engineering projects is that they can be designed well and constructed perfectly, but without ongoing maintenance they can fall into disrepair and fail to reach their intended design lives. Public-private partnerships can help improve that performance by creating checks and balances that ensure that the private partner has an incentive to maintain the capital project (whether it's a toll road, a wastewater treatment plant, or a dam) in good operating condition. But the research indicates that it's more often used strictly as a stopgap measure to obtain short-term financing for government authorities that have run out of money.

With proper maintenance, we've seen Gorman-Rupp self-priming lift stations last for a quarter of a century and more, and we're happy to help with Gorman-Rupp pump parts inquiries to help keep those pumps well-maintained. Please feel free to contact us with your questions.

July 2009
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last revised July 2009