Navigating public-private partnerships in higher ed

As higher education faces significant funding and maintenance challenges, institutions are increasingly turning to public-private partnerships (P3s) to achieve their infrastructure goals. Broadly, P3s refer to a variety of contracting arrangements between a public entity or non-profit and a private sector entity to finance, construct, renovate, manage, operate and/or maintain infrastructure. Effective P3s can provide numerous benefits, such as expedited project delivery, access to private sector financing and expertise, and facility lifecycle maintenance. This article explores P3s and describes the latest EAB resource to help senior leaders plan and implement a P3 on their campus.

P3s represent middle ground between traditional delivery and full privatization

What makes P3s compelling is that they offer a middle ground between traditional project delivery methods and full privatization. Historically, higher education institutions used public funds to contract with private companies for the design and construction of new facilities, retaining significant control but assuming most project risk.

Spectrum of Private Sector Involvement in Public Sector Infrastructure Delivery

Timeline

On the other end of the spectrum, full privatization entails transferring all project risks, ownership, and control to a private sector company. By comparison, P3s offer a middle ground where the institution retains ownership and substantial control of a facility but transfers responsibilities of design, building, financing, operating, and/or maintenance to a private partner under a single contract.

Success far from guaranteed

Though the potential benefits of P3s are attractive, moving too quickly on a P3 deal can lead to major financial consequences. Problems typically arise when institutions initiate deals without sufficiently evaluating the feasibility of a P3, securing buy-in from campus stakeholders, or building organizational capacity needed to manage such complex projects. In fact, a poorly planned and managed P3 project at the University of Québec at Montreal (UQAM), nearly bankrupt on institution and led to the president’s resignation.

P3 Gone Wrong

10 imperatives for evaluating, planning, and implementing P3s

To help leaders better navigate P3s, the Facilities Forum’s new publication details ten imperatives for evaluating, planning, and implementing a P3 to build new campus facilities and infrastructure. To supplement this guidance, the publication includes seven detailed case studies of institutions that have successfully leveraged P3s to achieve infrastructure goals.

Ten Imperatives for Evaluating, Planning, and Implementing a Public-Private Partnership

Ten Imperatives

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Navigating the Public-Private Partnership (P3)

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