P3s: A Promising Collaborative Approach to Construction Projects Part 2
As Orlando construction lawyers, we know that P3 collaborations are on the rise in the construction industry. We also know that the regulations, contractual obligations, and legal rights of P3s can be vary. In part one of our article, we introduced you to P3s, in this section, we’ll discuss risks and benefits.
Who Carries the Risk?
Risk come with any construction project and P3s are no different. However, risks such as maintenance, design, financing, timing, and operation are transferred to parties that understand and manage these types of risks well. Parties such as financiers, developers, construction contractors, consultants, operators, suppliers, service providers managing risk, take on the risk from taxpayers so that project objectives and the client’s goal can be achieved more effectively.
How Private and Public Sectors Benefit
Private and public sectors will benefit from P3s. The model is advantageous to private enterprises because it increases opportunities for innovation and improved efficiencies. Although the private sector bears much of the risk, it also sees a return on profits. Public sectors benefit from their relationship with a strong private expert that can back the project financially. Public sectors are typically strapped for cash while they are simultaneously trying to meet public demand for new or improved infrastructures. A P3 model will help ease this burden so public sectors can focus on funding more crucial public services and programs.
Why P3s Are Attractive
The attractiveness of P3s has grown due to factors such as the concern for replacing aging infrastructure, the success of P3s in other regions such as Europe and Canada, and the decrease in public funds that are not sufficient to finance the major improvements of infrastructures.
What Will Contribute the Success of P3s?
Advocates of P3 believe the new model will be successful as support from government and the political arena increases. Furthermore, P3s need strong legal and financial backing to grow into the most preferred way of financing public projects.
Disclaimer: The information contained in this article is for general educational information only. This information does not constitute legal advice, is not intended to constitute legal advice, nor should it be relied upon as legal advice for your specific factual pattern or situation.