Right sermon, wrong audience

As anyone who has ever attended a trade conference knows, such events often have the feel of group therapy as professionals vent their common frustrations.

Chief among these for delegates gathered at this week’s California Infrastructure Summit in Anaheim was US legislators' astounding lack of understanding of the benefits of public-private partnerships – especially in a state like California, which has thrice struck down PPP legislation.

Cezary Podkul

“Why doesn’t the legislature buy this? Why don’t they see the benefits of both private investment, of risk transfer by virtue of employing design-build and public-private partnerships as part of our transportation program?” vented Will Kempton, director of the California Department of Transportation.

He answered his own question by pointing to a group that is woefully under-informed about PPPs: employee unions.

As in other countries that have rolled out PPP-type initiatives, general enabling legislation for the procurement method faces stiff competition from happily-employed public employee unions who fear the private sector would opt for cheaper, non-unionised labour in delivering services to the public sector.

Fear begets ignorance, proponents say, since the unions are missing the point: PPPs increase the size of the pie and both the public and private sectors get a slice. Kempton favours a scheme whereby the state’s publicly employed engineers would be involved with the early stage activities required to de-risk projects for private sector involvement, such as environmental feasibility studies, and some later-stage activities such as inspections, while private sector capital and know-how would take care of the rest. Hence the problem: the public sector just don’t get it.

The solution, of course, is education, education, education.

So far, though, the private sector isn’t educating the right people.

One of the most poignant moments of the summit occurred when Stephen Harris, international development director of Tribal Group, a consultancy, took to the podium. A world expert on PPP arrangements who has traveled to more than 60 countries to sing their praise, the first thing Harris did was ask the audience: how many people here are from the public sector?

Three hands went up.

Private sector?

A forest of hands.

Like many others, these choir members need to spend less time listening to the sermon and more time preaching it.