view from underneath a bridge

Are P3s the Future of Infrastructure Financing?

A Bond Buyer Executive Roundtable Discussion | November 2016


The potential of public-private partnerships (P3s) to develop into a major means of funding in the U.S. has been long-heralded but slow to materialize. On October 5 in New York City, The Bond Buyer hosted an executive roundtable to discuss whether that may now be changing.

Moderated by John Porzuczek, Managing Director, BNY Mellon, four industry practitioners participated in the forum. They included: Doreen M. Frasca, Principal at Frasca & Associates, LLC; Roderick Devlin, attorney, Squire Patton Boggs; Seth Crone, BNY Mellon; and Sandra Brinkert, Director, Municipal Banking and Markets, Bank of America Merrill Lynch.

What follows is an edited version of the engaging discussion that took place.

John Porzuczek: In its 2013 Report Card for America’s Infrastructure, the American Society of Civil Engineers estimated that the U.S. would need to invest $3.6 trillion by 2020. Now, I believe that it’s the same or higher. The stars should be aligning for P3 opportunities where public entities need infrastructure funding but are struggling with their tax revenues and their post-employment obligations such as pensions, and where private investors are looking for long-term, stable investments here in the U.S. But have P3s taken off? What are the reasons they haven’t? What are the hurdles to seeing more P3s?

Seth Crone: With the private sector focusing on delivery and operations, the public sector can focus on accountability measurements. With terms defined for the life cycle of the project, P3s bring discipline and expertise to maintenance, reinvestment and even exit plans.

John Porzuczek: If we had an industry standard P3 Model, would that be a shot in the arm for P3s?

Seth Crone: P3s involve parties from various sectors, each of which have its own products, nomenclature and conventions. Even within the same firm, many professionals organize by client segment, for example---municipal, corporate, and financialinstitutions. Further each client segment has a typical product set with which it has great familiarity. While each segment may assume to understand how another area’s products work, it is vital to have all participants on the same page. Not only do we have differences across client segments and related products, the P3 team faces a decentralized financing system in the US. We must tailor the transaction to work with regional preferences and local political

John Porzuczek: It sounds like our model is not cookie-cutter, it’s really evolving and has evolved as we as a country have done more P3s. Could we touch on best practices that you have seen in the context of investor demand? Are there carrots that could be out there from an investor perspective that you could put in a deal?

Seth Crone: You want not only the best of breed on your team but also those that have a broad and deep bench. A global provider can bring to bear tools used successfully overseas to provide innovative solutions locally. Further, a firm with a broad product set can tailor its solution to the challenges at hand. Parties with a narrow range of abilities will tend to define problems and propose solutions within the confines of their limited range of options.

You need a referee for the life of the issue to interpret the documents. Projects have unknown trajectories. In corporate trust, we have learned that no matter how remote shortfalls or failures might be, it is prudent to anticipate them.


The care taken upfront in crafting definitions, mitigations, and their mechanics pay large dividends down the road.

Seth Crone - Vice President, Senior Relationship Manager, BNY Mellon

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