1. Michael Replogle Chairman, Partnership on Sustainable, Low Carbon Transport And Deputy Commissioner for Policy, New York City Department of Transportation Experience with Public Private Partnerships for Urban Infrastructure: Potential Benefits and Risks

4. Public Private Partnerships Combine skills and resources of public and private sectors Enable governments to benefit from private sector expertise while focusing on policy, planning, and regulation Can accelerate sustainable or unsustainable urban and regional development Are a vital means to accelerate sustainable development Lima Paris Action Agenda Transport Initiatives

5. Many Variations on PPPs Including Concessions – Delhi Noida Toll Bridge – NYC and Paris Bikeshare Systems – NYC LinkNYC Design-Build-Operate-Maintain – Hudson-Bergen NJ Light Rail System Design-Build-Operate-Transfer – Seoul Metro Line 9 Build-Own-Operate-Transfer – Sydney Harbor Tunnel Build-Lease-Transfer – Metro Rail Transit Line 3 Manila © Willy Kaemena

6. PPPs: Beneficial for Cities When They Enable more timely & effective delivery of infrastructure and services supporting sustainable development Use performance contracts appropriately balancing risks & rewards Supplement limited public sector capacity by leveraging private sector capability Boost budget certainty & extract long- term value-for-money with risk transfer Extract value from undervalued assets

7. 12 year $100 million concession agreement 12,000 bikes, 700+ bike stations Performance contract with liquidated damages, auditing, collaboration Revenues: advertising, sponsorships, user fees, memberships NYC CitiBike PPP

9. LinkNYC PPP 12-year concession: over $500 million in revenue to New York City Replaces all NYC phone booths with 7,500+ free wifi hotspots, with USB charging stations and free calls Integrated touchscreen offers maps and info about city services, and digital display shows ads and PSAs creates 100 to 150 new full-time jobs in manufacturing, technology and advertising, and 650 support jobs

10. PPPs: Challenges for Cities Need to consider Value For Money with good analysis, considering PPP development, bidding, procurement, oversight costs Finance may only be available when the investment itself generates sound revenue stream Status & quality of PPP projects may be subject to many political and social contingencies Government remains accountable to quality of services/performance of private operator Increased private sector control in some areas of action may cause imbalance between partners

11. PPPs Spur Innovation But Also Conflicts Over Private vs. Public Interest

12. SR91’s 2 toll managed lanes carry as much peak hour traffic – at 3 times the speed - as moved in 4 free, but congested SR91 lanes Report to Congress on the Value Pricing Pilot Program Through March 2004, US Federal Highway Administration (2004), available at: http://knowledge.fhwa.dot.gov/cops/hcx.nsf/All+Documents/AD276ECC2E3A077885257005006B5614/$FILE/March%202004%20Report%20of%20Congress.p df Could toll management of existing lanes yield better result?

13. Successful PPPs Have Effective project governance from project identification to tendering Experienced managers in the public sector supplemented by experienced PPP advisors Joint risk sharing arrangements Clear understanding of the different roles and responsibilities of various stakeholders Sound public or independent oversight of performance with periodic public reporting

14. Successful PPPs Require Open procurement processes Transparent risk allocation Contracts that ensure appropriate auditing, performance accountability, cost controls Enforceable dispute resolution mechanisms protecting the rights of all parties Coordination among planning and operating entities to establish robust revenue models based on sound assumptions

15. Policies Making PPPs More Risky, Costly, Or Impossible Capital controls deter investors Weak contract enforceability and rule of law Weak capital markets, appropriation risk complicate investor exit strategies Restrictions on foreign direct investment in infrastructure & operations Vaguely defined PPP policies Lack of mid-term policies & investment plans and public sector capacity to implement policies leads to inconsistent government behavior

16. Michael Replogle New York City Department of Transportation www.nyc.gov/dot Partnership on Sustainable Low Carbon Transport www.slocat.net 16 For more information see: Financing Framework for Low Carbon Transport, Partnership on Sustainable Low Carbon TransportFinancing Framework for Low Carbon Transport,