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The nation's urban infrastructure is facing significant problems due to prolonged under-investment. Governments’ capacity (at all levels) to borrow for such investments is profoundly limited by existing budget deficits, borrowing caps, threats to credit ratings, and recessionary economies.
Private funding of public infrastructure (P3s) is an option gaining increased attention. However, since private financing of infrastructure (typically) is more expensive than traditional public financing, building and upgrading infrastructure that is more sustainable is often seen as a luxury that won't be supported by private financing. We argue that there is every reason to believe that sustainable urban infrastructure is affordable through private financing. In fact, under the right circumstances, private financing provides a better opportunity to attract investment in sustainable urban infrastructure than public financing.
Potential sustainable urban infrastructure investments, that we believe could be privately financed and meet state and local jurisdiction sustainability goals include:
Because most public officials are unfamiliar with private financing of public infrastructure, there is limited awareness of the potential of private financing to embrace sustainable infrastructure. Nor are P3s a simple approach to providing public infrastructure and services. However, that only amplifies the need for public officials to grasp P3s: they are an innovative opportunity when done right; but if not done right, they could cause major fiscal problems. Those who support and advocate sustainable public infrastructure should be strong advocates of looking at private financing options.
As the market continues to expand for P3s from private and pension money, public officials need to understand both the promise and the potential pitfalls of P3s. The ICR ISUI Project brings together faculty and students to conduct research on the application of a P3 approach to privately financing public infrastructure projects and to foster a community of learning among public officials. ISUI offers objective analysis and guidance on how to initiate and effectively manage P3s for sustainable urban infrastructure projects.
John Forrer is the Associate Director for the Institute for Corporate Responsibility and the Associate Research Professor of Strategic Management and Public Policy at The George Washington University School of Business. Dr. Forrer is a leading expert on public-private partnerships. Most recently, he was a co-organizers and presenters at the Uncommon Alliances: Real Partnerships - Real Experiences - Real Impacts Conference, a collaboration between ICR and the US State Department, to explore the ins and outs of creating alliances, talk about techniques for overcoming hurdles, and focus on emerging trends in the partnership community. His most recent publications are, "PPPs: E-SCADs or Partners in Service" with Kee (Public Integrity, Spring 2012); “Locating PTC through Good Global Governance” (Journal of Business Ethics, Jan 2010); and, “Public-Private Partnerships and the Accountability Question” with Kee, Newcomer and Boyer, (Public Administration Review, May/June 2010). He is currently writing a textbook on partnership and network governance, including public infrastructure.
The Institute for Corporate Responsibility
The Institute for Corporate Responsibility is uniquely positioned to take advantage of multiple opportunities and resources in order to become the central institute for the study of issues pertaining to corporate responsibility and to be a resource to the national and international community on the topic. ICR has endeavored to become a leader for the business community through business associations and the policy community through federal agencies, Congress, local and regional governments, non-governmental organizations, and international organizations. By fostering such diverse partnerships - in the US and globally - ICR is achieving its goal to be the preeminent, nationally recognized center on this subject.
The Office of Sustainability
The Office of Sustainability provides a strategic home for sustainability initiatives at the George Washington University that are implemented in partnership with stakeholders across the organization. George Washington University seeks to engage the world by exploring the important issues of our time including policy and governance for sustainability with a vision to create resource systems that are healthy and thriving for all. Through efforts underway in operations, teaching, research, and outreach, the university is committed to being a model of sustainability.
The Center for Real Estate and Urban Analysis
The Center for Real Estate and Urban Analysis is the George Washington University School of Business’ research center focused on walkable urban communities, sustainable development, international real estate and real estate finance. The Center is charged with developing an influential real estate research agenda and a first-rate real estate curriculum for graduate and undergraduate students at George Washington. The Center hosts a series of conferences and seminars focused on urban planning, commercial real estate and housing finance. The Center is striving to become the national leader in research on walkable urban communities and sustainable development.