Entering an era of global mega-P3s | The future of the American city | Creating climate-friendly concrete rebar
infrastruttura
no. 29
From Ukraine to Indonesia, can "mega-P3s" help the world meet its mega-project moment?
The world's mega-project moment continues to unfold, from significant federal investments in America's surface transportation and rail infrastructure networks to much larger programs like NEOM in Saudi Arabia, new capital cities for Indonesia (Nusantara) and Egypt, and eventually the necessary reconstruction of swaths of Ukraine. All of these efforts will require significant amounts of private capital, in addition to heavy government subsidies. Are P3s the best mechanism for deploying investors' funds?
It's a fair question because developing "mega-P3s" can be tricky for a few reasons. First, without any resident population in place, it's hard to leverage user fees (like toll revenues or connection charges) into funding for a P3 in the first place. (For example, investors aren't interested in rail lines to nowhere when nobody is around to buy tickets.) So private investors will ask for public guarantees. But depending on the local political climate and condition of its public finances the government may struggle to muster them to investors' satisfaction.