Privatization cp ddi 2012 1 Privatization + Coercion 1
PPPs save money in the short and long term – reduces the need for the government to spend money
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- P3s would minimize government infrastructural expenditures
- Privatization of infrastructure would generate a budget surplus
- Privatization only way to provide needed funds without straining the budget
PPPs save money in the short and long term – reduces the need for the government to spend moneyStephen J. McBrady is a Government Contracts attorney in the Washington, DC office of Crowell & Moring LLP, March 2009, “Funding America’s Infrastructure Needs: Public Private Partnerships May Help Close Infrastructure Gap”, http://www.crowell.com/documents/funding-americas-infrastructure-needs_construction-briefings.pdf; AB The purpose of PPPs is to more efficiently (and economically) deliver a needed project or service that would otherwise have been provided by the government through traditional public sector procurement. Because PPP projects are funded in part through private capital, they provide a means of delivering public services at lower “up front” cost to the government. Particularly in the case of costly infrastructure projects, sharing financing burdens with private entities can significantly reduce budget constraints. At the same time, private entities often benefit from generous performance incentives as a reward for their increased risk. The system differs from traditional notions of “privatization” or “outsourcing,” whereby a government entity actually transfers responsibility for, and title to, an asset to the private sector. 7 In a Public-Private Partnership, either the public entity or the private entity may own the underlying asset. In the case of a hospital, for instance, a private entity may finance and build the facility with the intent to operate it and “lease” it back to the local municipality. On the other hand, in the case of an airport, a city of municipality might “lease” the airport to a private entity to operate, for an annual fee, while retaining ultimate ownership of the asset. P3s would minimize government infrastructural expendituresGaffey, ‘10 [David W. Gaffey, Law Clerk to Bankruptcy Court for Eastern District of Virginia, Juris Doctor with Honors from George Washington Unviersity, Winter 2010 Public Contract Law Journal 39.2 As our nation's roads, bridges, railway systems, and other critical transportation networks continue to age, the rapidly increasing costs of maintaining and replacing such essential infrastructure will place an immense burden on governments at the federal, state, and local levels over the next ten to fifteen years. In light of Government Accountability Office (GAO) forecasts that highway vehicle miles of travel will increase from three to seven trillion miles over the next fifty years,1 the Federal Highway Administration (FHWA) predicts that the average total annual investment required merely to maintain the nation's existing local and interstate highway infrastructure between 2002 and 2022 is projected to exceed 2002 highway spending levels by 8.3%, and is projected to exceed 2002 spending levels by 74.3% if capital improvements are considered.2 Compounding the impact of this cost increase, the FHWA further forecasts that this annual investment necessary to maintain current highway conditions on federal, state, and local roads will be forty percent greater than the projected revenues derived from these roads between 2002 and 2014.3¶ Given this significant gap between available funding and required expenditures in an era of rising national debt and budget deficits, state and local governments are seeking alternatives to funding transportation infrastructure through traditional means.4 Expanding the use of public-private partnerships ("PPPs"), which use private firms to provide traditionally governmentsupplied services, is therefore invaluable, as the increased use of PPPs would enable the Government to provide needed public infrastructure while minimizing both short- and long-term expenditures. However, in order to effectively utilize PPPs, the United States must develop a national system for the implementation and regulation of their widespread use, a system that reflects the division of power between the local, state, and federal governments. Spending - 2 Privatization of infrastructure would generate a budget surplusLord, ‘10 [Nick Lord, executive editor of Financial Media at Haymarket Media Group, Staff Writer at Euromoney former Editorial Director at Finance Asia, affiliated with the University of Oxford, 4/2010, Euromoney Barend at the New York State Asset Maximization Commission concurs. "We don't want to monetize critical assets to close a short-term budget gap," she says. "We want to use P3s as a means of delivering vital state infrastructure on time, on or below budget, and with greater accountability for the performance of the asset."¶ But there is no getting away from the fact that the assets are there and people want to buy them. And the conditions have never been this propitious to support a whole new vibrant market. With hundreds of billions and potentially trillions of dollars at stake, this could be the biggest emerging market in the world. In years to come president Obama could be crowing about the persistent budget surpluses, surpluses provided by the successful monetization of one of the US's greatest resources, its infrastructure. Privatization only way to provide needed funds without straining the budgetMansour, ‘06 [Asieh Mansour, managing director, 2006, RREEF America L.L.C. Real estate/infrastructure division of Deutsche Bank AG ¶ Two significant trends are driving the movement towards privatization. First, governments at ¶ all levels are strained for financial resources. Privatization is a means for providing needed and ¶ popular infrastructure without further straining the public budget. Second, the private markets ¶ are capital rich, seeking to invest increasing quantities of capital at attractive risk-adjusted ¶ yields. Investment in privatized infrastructure can offer attractive opportunities. ¶ The federal government traditionally has heavily funded much of the infrastructure currently ¶ targeted for privatization. During the past few decades, efforts to reign in the federal budget ¶ have resulted in declining resources for roads, bridges, airports, seaports, and water systems. ¶ These budget reductions have impacted both capital and maintenance costs. As a result, ¶ these burdens have shifted to state and municipal budgets. Increasing revenue at the state ¶ and local levels, however, is politically very difficult. Thus, privatization is viewed as a ¶ mechanism for providing infrastructure without negatively impacting a state or municipal ¶ government’s fiscal position. Over the past decade, it has been the regional governments in ¶ the US that faced severe fiscal pressures that have predominantly privatized. This issue ¶ impacts both capital costs of developing new infrastructure and maintenance costs for older ¶ infrastructure. ¶ Infrastructure investment needs in the US fall into two basic categories. The first involves ¶ growth areas, including booming new suburbs and areas of regional growth, such as the ¶ southern and western portions of the nation. The needs in these areas are for capital to ¶ develop infrastructure to support this growth. With federal funds more limited, states and ¶ municipalities need to be more creative in financing these needs. Privatization of the new ¶ infrastructure is an obvious solution. ¶ The second category involves curing deferred maintenance of older infrastructure. Older ¶ communities, particularly in the Northeast and Midwest, are served by old infrastructure. ¶ Typically, these regions suffered from under-investment in the maintenance of this ¶ infrastructure. With slow economic growth, little fiscal capacity exists to fund what is often ¶ substantial deferred maintenance. Once again, privatization offers a potential solution. ¶ The private sector can provide desperately needed capital for investing in the crumbling ¶ infrastructure across the US. There has been severe underinvestment in US infrastructure ¶ over the past decade. The supply of infrastructure assets has failed to meet growing demand ¶ as exemplified by an aging infrastructure, expanding demand for services with a growing Spending – 3 Directory: files files -> Answer True False 2 points Question 2 files -> Integer programming and game theory files -> 4 Integer Programming files -> Bpa vehicle Window Repair Scenario #1 task: Procure vehicle window relacement. 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