California PPP veteran launches new advisory firm

Dale Bonner, former secretary of California’s Business, Transportation and Housing Agency, is launching an independent infrastructure consultancy that he hopes will help to bridge the gap between the public and private sectors in California.

Dale Bonner, the former California Secretary of Business, Transportation and Housing who helped bring the state’s first public-private partnership (PPP) to commercial close, has started a new infrastructure advisory firm to focus on developing more PPPs in California.

The firm, called Cal-Infra Advisors, will open today.  It will focus on advising both the public and private sectors on transportation, water, and social infrastructure projects, according to Bonner. The firm is based in Los Angeles with offices in New York and San Francisco.

Bonner, who prior to his 2007 appointment as secretary of California’s Business, Transportation and Housing agency (BTH) served as partner at law firm Epstein Becker & Green, said the new firm will aim “to bridge that gap between the public and private”.  He also said that he hoped to “decouple” politics from the state’s procurement processes.

“One of the goals is to professionalize and to bring greater efficiencies to [PPPs] and other forms of investment,” Bonner said.

He said that the firm currently has three members.

During his tenure at BTH, Bonner oversaw the implementation of California’s public-private partnership statute, which former California Governor Arnold Schwarzenegger, a Republican, signed into law in 2009.

As Secretary of the Public Infrastructure Advisory Commission, Bonner also advised on the state’s first PPP—a project known as Presidio Parkway that involves the reconstruction and operation of an access route to the Golden Gate Bridge, as well as other works.

The California Department of Transportation and the San Francisco Country Transportation Authority awarded the concession to a joint venture between German infrastructure group Hochtief and French infrastructure fund manager Meridiam, but a lawsuit from a public employees' union has held up financial close.

Bonner identified several other areas in which PPPs could be coming up in California, including potential opportunities for private investment in water infrastructure and about six projects from the Los Angeles  County Metropolitan Transportation Authority, but said his experience with Presidio Parkway showed him that such projects don’t come to fruition “unless there is sufficient engagement”.

“I don’t think it’s fair to assume that those projects will naturally emerge,” Bonner said.

Following Schwarzenegger’s departure and the inauguration of Democratic Governor Jerry Brown earlier this year, Bonner left his post in California government. Since then, Bonner said he had been having discussions with various infrastructure professionals across the country.

He said that in those conversations he felt that he saw many talented bankers and lawyers in the private sector, but felt that there was “a distinct gulf between the readiness and willingness on the private side and where the public agencies are”.

Bonner emphasised that the focus of Cal-Infra would be different from the focus of investment bankers, fund managers, or project finance lawyers.

He said the “big need now in the market is not for another project finance lawyer or investment banker” but for “someone who can continue cultivating the market”.

“We are more of a niche player that is bringing a very unique set of insights that tie very much back to a statewide perspective on the government side,” Bonner said.

“I believe very much that infrastructure is very local in nature,” Bonner added. “We have to stay involved not only with the capital markets in New York but also with all of the planning agencies and policy-oriented stakeholders in California.”