Northampton County recently announced plans to address 33 structurally deficient bridges in its jurisdiction by employing a public-private partnership model, which is a first for a Pennsylvania municipality. A public-private partnership (P3) is a business and contractual relationship between a government agency and private companies to finance, construct, and operate public transportation networks, parks, convention centers and similar projects intended to serve the public. Proponents of P3s will highlight that these arrangements transfer the risks commonly associated with this type of undertaking to the private sector and save taxpayers money when compared to instances where the state or local government undertakes the project itself by borrowing money under more traditional financing methods.
The P3 arrangement underway in Northampton County is modeled after Commonwealth of Pennsylvania’s massive Rapid Bridge Replacement (RBR) Project, under which the Pennsylvania Department of Transportation (PennDOT) entered into a P3 arrangement to repair over 500 structurally deficient bridges throughout the state. Local officials in Northampton County worked closely with PennDOT in structuring this project, and estimate this approach will save the municipality between 20-30% per bridge.
Being the first municipality to employ this method of P3 at a local level, the success of Northampton County’s undertaking is not yet certain, and the feasibility of additional municipalities following suit remains unclear. Nevertheless, this innovative use of P3s is noteworthy in that it provides a new structure for local governments across Pennsylvania to consider when taking stock of its infrastructure needs.
MacElree Harvey’s Business and Finance attorneys have experience advising clients on developing innovative ways to identify potential revenue streams and can help local governments and private business partners evaluate P3 opportunities to seize on various infrastructure opportunities. Often, these transactions can be structured in a way that allows a meaningful investment structure to the private sector while maintaining elements of control for the municipality.
If you have any questions about the use of P3s or other project finance opportunities, please contact W. Patrick Scott at 610-840-0229 or [email protected] or Christopher R. Sullivan at 610-840-0279 or [email protected].
This alert is informational only and not intended as legal advice. Speak with a licensed attorney about your own specific situation.