Public-private partnerships (P3) are an increasingly popular method of delivering infrastructure projects in the United States. They are primarily based on the benefits they offer in terms of cost and time savings, risk transfer, innovation, increased certainty of delivery, long-term cost advantages and other benefits. .
In Colorado, PPPs have been used at the state and local levels as a delivery mechanism for various forms of infrastructure. At the state level, the legislature created the High Performance Transportation Enterprise, now known as the Colorado Transportation Investment Office (CTIO), as a branch of the Colorado Department of Transportation (CDOT). The CTIO is authorized to use a P3 delivery mechanism for state highways, such as the recently completed Central 70 project, the US 36-lane managed project and other improvements. At the local level, efforts have continued to use PPP as a delivery mechanism for airport improvements and other public goods.
Recently, a major step has taken place to expand the use of PPPs at the state level in Colorado. The Colorado General Assembly passed and the governor signed SB22-130. This authorization allows state public entities, including the executive, legislative, and judicial branches of state government, to enter into agreements with private companies to develop and/or operate public projects. The bill excludes CDOT and any higher education institutions, while preserving any existing P3 authority available to these entities.
A PPP is defined as an agreement between one or more state public entities and one or more private partners whereby a state public entity can assign responsibility or risk to a private partner to develop or operate a public project. In return, the private partner may receive all or part of the royalties generated by the public project, the provision payments made by the state public entity under the public project, other public funds or any other legally available consideration.
A “public project” is defined as any construction, alteration, repair, demolition or improvement of any land, building, structure, facility, property or other public improvement owned by the State, adapted and intended for use in the promotion of the public interest. health, welfare or safety and any maintenance programs for the upkeep of these projects.
The law’s stated purposes include a General Assembly finding that the law is intended to help the state meet its “most urgent and basic needs, such as increasing behavioral health capacity, deploying broadband, affordable housing development and child care services.” It is likely that these projects will be given priority under the new law.
The bill specifies project delivery methods or agreements that a state public entity may use to develop or operate a public project. The financing of a public project can be done in the amounts and according to the methods determined by the parties to the agreement. The private partner and the public entity of the State can use all funds available for the public project and can enter into specified financing agreements.
The executive director of the Colorado Department of Personnel or the person designated by the executive director is required under the bill to oversee any P3s undertaken under the bill. This ensures that every PPP undertaken by a state public entity within the executive branch of state government is in the best interests of state taxpayers. Additional requirements for approval by a separate committee are required for transfers of interests in state ownership.
The bill provides that the executive director must establish requirements for state public entities to issue requests for proposals or receive unsolicited proposals, subject to the approval of the executive director. These requirements should address issues such as the benefits associated with the P3 delivery method, a value-for-money analysis, the suitability of the proposal, and other issues relevant to the exercise of approval rights by the executive Director. The bill also creates the Public-Private Collaboration Unit within the ministry to assist and promote the use of PPPs as a delivery mechanism for state projects.