Patrick Foye, the executive director of Port Authority of New York and New Jersey, told delegates at the Infrastructure Investor LP Summit in New York that the government agency had digested useful lessons from the success and hardships of recent PPPs.
After closing two major projects in recent years, Foye argued in the summit's opening address that “if you can do PPPs here, you can do them anywhere.”
In an area as large and complex as New York and New Jersey, he said, the Port Authority has been able to start construction on the $1.5 billion Goethals Bridge PPP in 2014 and closed the $4 billion LaGuardia Airport modernisation, the US' largest PPP, in June.
A consortium led by Macquarie Group and construction firm Kiewit Corp. was chosen to develop the Goethels bridge, and the Meridiam-led LaGuardia Gateway Partners consortium for the LaGuardia airport modernisation.
One of the lessons he said the Authority has learnt through these procurements is that success was never to be taken for granted. “Investment in time, money and sweat equity is going to be substantial,” Foye said. “We're not going to go to market without a high degree of confidence it's going to close.”
He also recognized that the Port Authority was “too swollen” and inefficient during the procurement. The agency is now more aware of the time and cost it takes to put a PPP bid together, he said, adding that an improvement programme was underway.
The support of government leaders to see deals through is critical, Foye added. “Without that support from strong elected executives, it makes transactions, frankly, impossible to do,” he said.
Foye said the Port Authority would likely do more PPP deals in the next 12 to 36 months. Any more details on what could be coming down the pipe?