Meet IP3, the New P3 Where Citizens Are the Owners


AEI Road PrivatizationIf you follow the infrastructure financing debate about how America is going to fund our future infrastructure needs, you have probably heard the term P3 or public-private partnership discussed as an innovative financing structure to utilize private investment in public infrastructure. However, with the release of the American Enterprise Institute’s new report, Road Pricing and Asset Publicization,” there is a new angle for the debate – the investment public-private partnership (IP3).

So what exactly is this IP3? Here’s how the report’s authors explain it: “The IP3 recognizes that you not the federal government or a private company—own roads that have already been built. And it offers you an annual payment for investing in them…. Under an IP3, a private company pays a public partner (like a state) a large upfront cash payment (called a concession) for the right to operate and collect toll revenue from an existing road network for a certain period of time. The IP3 locks away most of that concession payment—and most of the toll revenue—in a protected investment fund that pays an annual dividend to all households in the newly priced region. That helps offset the additional costs they will face from tolls, while recognizing that citizens are the true owners of the roads.”

America’s roads are definitely in need of repair so the more new ideas that are debated that’s all the better including P3s, gas tax changes and fixes, and all the others. While P3s are only one potential solution among the many, one thing is for certain – it’s time to start debating before the Highway Trust Fund is broke and many states lose half of their highway and bridge funding.

Prev Story: The Countdown Begins – Our Federal Funding for Transportation May Run Dry Next Year Next Story: Celebrating Infrastructure Successes in 2013