Although workable for decades, that old-fashioned approach in the US ultimately created an array of problems. Poor project selection is now legendary, as the “bridge to nowhere” and the 6,371 earmarks in the 2005 SAFETEA-LU highway reauthorization bill attest. The system is plagued by time and cost overruns. The traditionally-procured Boston Big Dig, for example, was expected to cost $2.8 billion but ultimately ran some $14.6 billion, was almost ten years late, and was plagued by leaks and design flaws.

A major educational effort for public officials in the use of alternative delivery methods is called for, not a resignation to third-world infrastructure.

In a public-private partnership (PPP) contract, the private partner usually assumes the risk of time and cost overruns, creating strong incentives to deliver projects on-time and on-budget. Moreover, a PPP with a maintenance provision ensures that the infrastructure will be properly maintained over its entire life cycle by including clear, enforceable penalties for deferring maintenance.

Read the full article on public-private partnerships by R. Richard Geddes at American Enterprise Institute