Public-Private Partnerships Make Things Happen

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Public-Private Partnerships (P3s) are exactly what they sound like – collaborative agreements between public entities and private companies. The joint objective of a P3 is to distribute the cost of a project among numerous stakeholders who all stand to reap the eventual benefits of the project.

We previously discussed P3s in the context of their role in the training of young aviation professionals (eNewsletter June 2016).

In that realm, we saw how numerous aviation technical colleges and training centers partnered with companies who provide real-world practical experience to prepare students more effectively and to enhance their likelihood of securing a job upon graduation.

Here we’ll look at the role of P3s in much larger scale billion-dollar projects surrounding the construction of civil facilities, in this instance airports.

Most readers are aware that significant concern has been voiced by many and for some time, that systems and infrastructure throughout the US have been aging and are sorely in need of repair, upgrade, or replacement. Bridges, highways, storm drainage, and water facilities join airports among those frequently mentioned.

Often, these types of projects are extremely complex, very costly, and would normally be way beyond the budgets of most cities or states, were they to tackle them on their own. To be sure, federal dollars would likely be available to cover a portion of the cost, but in addition the most efficient approach may also involve partnerships between government entities and private companies.

In New York, where Governor Cuomo has already announced plans for $100 million in infrastructure improvements statewide, he has now announced a $10 billion plan to redevelop JFK airport, the fifth-busiest aviation facility in the US. This is in addition to the $8 billion renovation currently under way at LaGuardia airport (LGA).

At LGA, the Port Authority of New York and New Jersey selected LaGuardia Gateway Partners – a consortium of airport experts – to design, build, manage, and maintain the redevelopment and operations of the aging Terminal B as the first phase of the overall project. The team includes firms such as Vantage Airport Group, Skanska USA, Meridiam Infrastructure, WSP | Parsons Brinckerhoff, Walsh Construction, and HOK Architects.

The project has made a significant effort to recruit Minority- and Women-owned Business Enterprises as subcontractors, vendors, and consultants, and as of October 2016 lists 115 MWBE contracts totaling more than $186 million. This demonstrates the importance placed on including as many segments of the population as possible, representing the overall demographics of the city.

Terminal B was dedicated more than fifty years ago in 1964, and services over 13 million passengers per year. Its reconstruction will create 8,000 direct and 10,000 indirect jobs, while transforming LGA into a unified airport with one main terminal, more taxiways, better transportation access, and best-in-class passenger amenities. Construction will take place while operations continue uninterrupted (in theory).

It is estimated that more than $5 billion of the $8 billion LGA project will be paid for by the private sector.

Like the project at LGA, the city is considering P3s as a financing strategy for a large portion of the JKF project, and some think it has the potential to attract as much as $7 billion in private investment.

The plan is based on recommendations of the State of New York’s Airport Advisory Panel. Features of the plan include expanding newer terminals, redeveloping older terminals, expanding parking lots, redesigning roads for quicker and easier access into and out of the airport, expanding rail and other mass transit options, adding state-of-the-art security technologies, and adding a wide variety of amenities to increase passenger comfort and convenience.

Through the P3 strategy, New York is able to take advantage of the experience, expertise, and most importantly – the capital, the private sector is able to provide. The governor and others see the transformation of LGA and JFK into world-class transportation hubs as being crucial for New York to remain competitive in the global transportation market. The two airport projects are among a number of P3 projects that currently qualify New York as the leading city in America for leveraging private sector capital to accomplish projects benefiting the public sector it might otherwise not be able to afford.

Governor Cuomo’s plan to rehabilitate the state’s transportation infrastructure, LGA, and particularly JFK is seen by many as visionary, revolutionary, and has generated interest and enthusiasm not only among New Yorkers but around the nation.

We’ll continue to follow this project and keep you updated on its progresses.

 

Mike Straka, PhD
HN Contributing Author & Technical Support
Past Chairman, Colorado Aviation Business Association

Sources:
1. Public-Private Partnerships Help Make Careers in Aviation Maintenance Stronger Than Ever.  Scott Steward.  Aircraft Maintenance Technology, March 2016, pp. 16-19.
2. Blog: Spotlight On The $10 Billion Development Plans for New York-JKF. Mary Scott Nabers. Airport World website, January 9, 2017: http://www.airport-world.com/news/general-news/6008-blog-new-york-is-embracing-the-p3.html
3. LaGuardia Gateway Partners website: www.laguardiagatewaypartners.com/redevelopment