Tag Archives: PPP

The Rubber Meets the Road

Detroit can learn from Indianapolis, claims a new article in the Next American City:

Although you might not guess it today, Detroit and Indianapolis once had much in common. Thirty years ago, both cities suffered from decreased economic activity, severe unemployment, violence, white flight and racial tensions. But Indianapolis, the nation’s 13th most populous city, has since recovered from those challenges, which were spawned by deindustrialization and suburban job growth…

What accounts for the drastic disparity in these two cities’ fortunes? Many politicians and members of the business community suggest that public-private partnerships — deals in which the government partners with the private sector to deliver a necessary service that it cannot afford, or which it wishes to provide more efficiently — have allowed Indianapolis to prosper. City governments can form PPPs to support small-scale projects, and may also lease the operation of their own assets, but if they want to forge a PPP to back a larger initiative, like a massive infrastructure project, they need legislative support from the state. Indiana law permits the formation of PPPs for infrastructure projects; Michigan law does not…

The timing is critical: in addition to money from Obama’s stimulus package, Michigan stands to receive a meaningful cash injection from the transportation reauthorization act, which is up for renewal this year and which provides funding to states for transportation and infrastructure-related projects. Yet, even with public funds, the state won’t have the money necessary to develop the many modes of transport it needs, says Carnrike, who points out that Michigan has the capacity to develop air, roads, and water-related infrastructure. By collaborating with private companies, Michigan stands a chance at creating the infrastructure crucial to its economic recovery.

More about PPPs from the Reason Foundation here and here.

HT to Planetizen.