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Credit: Lizz Giordano
Looking for ways to accelerate the delivery of light rail, Sound Transit is considering using private-public partnerships (P3) for ST3 projects. But to take advantage of potential savings, CEO Peter Rogoff warned the Board it “would have to cede some decisions to a private vendor that it customarily reserves for itself.”
P3s are a procurement form which uses a single private entity for the design, construction, and possibly the financing, long-term operation, and maintenance of projects. The partnership offers several potential benefits to public entities, including reducing risk and costs, lowering agency workloads and providing additional debt capacity, without having to privatize the project.
Reducing agency workload
In the short term, P3s are more work for public agencies, which are still responsible for completing both the environmental review and design specifications for the bid process. In the long term, however, the partnership can eventually transfer a lot of work to the private company, freeing up agency resources.
“When we are facing a project list [for ST3] this long, if there is an opportunity to have a public/private consortium take on an entire project, and not therefore have to grow the staff as robustly… just relieving us of some of that bandwidth would have some benefit,” Rogoff said during the Thursday Executive Committee meeting.
Risk Transfer and Cost Savings
Once contracts are signed, ST would lock in a cost and timeline for the project, along with (if applicable) a long-term operational cost agreement, passing future risk onto the private company. Continue reading “ST Explores Private-Public Partnerships”