Welcome drinks reception
12 June 2023
Current state of the US P3 market
09:20Opening panel discussion: What’s next for the US P3 market?
The US P3 market hit a record in 2022 with more than USD 40bn in projects reaching financial close, according to Infralogic data, thanks to two major airport P3s at New York’s John F. Kennedy International Airport: the New Terminal One initiative and the redevelopment of Terminal 6 and 7. Beyond the headline figure, though, number of P3 transactions declined compared to the prior two years amid rising interest rates, stubbornly high inflation and still snarled supply chains.
Industry participants are bullish on increased activity in 2023 as newly elected state and local governments search for innovative solutions to tackle traffic congestion, climate change and broadband access.
The opening panel will discuss these issues and set the scene for the next two days.
- What are the high and lows of the last 12 months and what has the industry learned?
- How have the November mid-terms affected the political climate for P3s?
- Where are the opportunities for P3s in the next political cycle and how are private developers prioritizing those?
- How are the current wider economic conditions affecting state municipal budgets and is it having any material impact of P3 deal flow?
10:05A view from the states
Several states are looking to expand the use of P3s through proposed and passed legislation. Even as more governments move to enable P3s, there are many caveats that developers and investors need to consider in prioritizing market opportunities. In this session hear from state and local government leaders about their P3 projects, and critically appraise the next wave of opportunities.
- What projects work best for the P3 structure?
- Do states need to consider more availability-payment considering the current political environment that is sceptical about tolling?
- How can P3 developers work better with government?
- Which state(s) might emerge as a P3 market leader?
11:20Managed Lanes: Growing sophistication
Managed lanes promise to cut traffic congestion and generate revenue to fund transportation projects. But projects can carry significant risk from political opposition in the planning stages to the chance tolls will generate less than forecast revenue.
Panellists with experience in structuring deals will discuss issues such as long-term viability; lessons learned and give their projections for ongoing viability of these models.
- How have structures improved over the last five years?
- What are today’s challenges in getting a managed lane project up and running?
- What are the key elements of the demand risk vs. availability debate and are there hybrid solutions?
- What types of performance (traffic easing, sustainability, etc) do projects aim for and how is this evaluated?
- How do constituencies view tolling and tolling increases and has education around them improved?
12:05Airport P3s – the next generation of deal structures
Air traffic is poised to reach or even beat pre-pandemic levels this year. To meet this demand, airports are looking to build new passenger and cargo terminals to replace aging facilities with considerable interest from developers and investors. The size and scope of deals, their success and the expertise mustered by concessionaires, mean a shortlist of players are ready to step up to the plate at a moment’s notice. With more than 15 non-awarded airport P3s in the market, investors are looking at their next opportunities.
Hear panellists debate the next generation of airports deal structures and how the P3 industry can capitalize on these opportunities.
- How does the JFK deal differ from other airport deals and how might JFK be a key to unlocking future projects?
- Will other large international airports in the US employ P3s to redevelop facilities?
- Are P3s a good fit for mid-size airports that want to improve their facilities?
Digital Infrastructure and P3s
14:30Digital infrastructure – The broadband rollout
Taxpayer funds via the 2021 Infrastructure Investment and Jobs Act are beginning to flow into broadband projects, particularly USD 1bn in grants for middle mile initiatives. Many developers and investors are pivoting from a completely privately financed model to partnerships with governments, resulting in an increasing appetite for investors in the past three years – especially in the M&A market. In this session panellist will discuss:
- Enhancing broadband to rural communities – how can P3s help?
- Is the project finance P3 model a fit for broadband projects?
- Will the European import of open-access networks become more common?
- What are investors’ appetite for cableco/teleco fiber JVs?
- Are higher costs, labor constraints and supply chain issues still hampering projects?
P3 policy and procurement
15:15The rise of counties, cities and schools, the new frontier of P3 adapters
More counties, cities and school are embracing P3s and the world of alternative procurement models. This panel will discuss the rising wave in new p3 adapters, discuss why now for alternative development and what do these new adapters need to be successful.
- What is driving the these p3 adapters?
- Why are they exploring the P3 model for these projects?
- What is their biggest risk, fears and ambitions for their projects
- What can the industry do to support these new entrants into the alternative delivery world
- Are we exploring the P3 model for faster delivery to effectively compete with their Neighbours?
- How has the potential to access IIJA funds impacted their decision?
16:15Improving communities through P3s and getting constituent buy-in
Constituents buy in is crucial for the success of P3s. Potential projects often face public backlash, often due to a misunderstanding of the terms of P3s. In this session, hear from both the public and private sector, about the best strategies to educate communities on the merits of using P3s to buildcritical infrastructure.
- What is the best time for governments to start educating the public?
- How can procurement agencies find the right advisors?
- What can state legislators, government departments and agencies do to speed up the procurement of P3 projects?
- What political and geographical issues must be considered? How much does public sentiment play into these considerations?
- What steps should a government agency take to determine the right level of public funding for a project?
18:00YPI (Young Professionals in Infrastructure) Networking Reception
Join YPI after our forum cocktail for a fun night of networking. This happy hour will take place on June13 from 6pm at Carragher's Bar, 17 John St, New York, NY 10038, United States More details on how to RSVP will follow shortly.
How P3s can help to deliver essential social infrastructure
Over the last five years, cities have become more comfortable procuring schools, courthouses, government buildings, prisons, and recreational facilities as P3s. Universities have also embraced P3s to build housing and upgrade energy systems, with 28 greenfield P3s accounting for USD 3.5bn reaching financial close since 2018.
In this session hear panellists discuss:
- Are social P3s easier to advance than large mass transit projects?
- How can P3s help to meet the demand of affordable housing?
- How do politics play a role in these projects?
10:25The Impact of Climate Change on Infrastructure
Adaptation to carbon emission-free infrastructure presents enormous challenges and opportunities for the sector. The deployment of newer infrastructure technologies – EV charging, microgrids, hydrogen, carbon capture – have become focal points in the push for decarbonization and sustainability. At the same time, new and existing projects must withstand resiliency tests in the face of extreme weather events due to climate change. The scaling of innovations in technology and procurement methods can advance investor and community interests.
- Is climate change an opportunity for smarter P3 investments?
- Advancing projects through partnerships with local and national governments
- How do stakeholders mitigate the physical risks of climate change on infrastructure assets?
- What are prevailing strategies and policies to make infrastructure resilient and sustainable?
Managing & Financing P3s
11:40How to manage risk in P3s: Construction, financing, O&M
Risk is a key characteristic of P3s, influencing project structure and cost. The assessment of risk is a critical task in developing and executing P3 projects. Effective risk allocation and risk transfer can drive more competitive bids while simultaneously increasing value for money for the public sector.
A panel of experts from the developer, financing and investment industry will look at how the risks inherent in the different stages of projects can be managed within the framework of a P3:
- What is the appropriate risk transfer between the public and private sector for optimal project delivery?
- What are the current insurance and surety products available for P3 projects? How can an advisory team mitigate risks?
- How can stakeholders identify and mitigate their respective risks in a P3 project?
- Can progressive P3s fairly allocate risk between the public and private sectors?
Developers faced dramatically more expensive financing markets in 2022 as the Federal Reserve raised interest rates in response to stubbornly high inflation. Even so, P3 projects secured record amounts of capital to reach financial close. In 2022, almost USD 20bn dollars in SPV and holdco-level debt were secured in the US P3 market, with both loans and bonds highly increasing their YoY values. PABs figures experienced their record year in 2022, driven by large deals such as the redevelopment of JFK Terminal 6, the financing of Maryland Purple Line, and the financial close of the Pennsylvania Major Bridge Program.
In this panel, experts will discuss what are the best strategies for financing projects in a high volatility environment.
- How much capacity do banks have to provide construction financing?
- How can developers take advantage of TIFIA and WIFIA financing? PABs?
- What other sources of debt and equity capital are available?
- If the US enters a recession, how concerned should developers be about the financial strength of state and local governments?
P3 visionaries - what’s next?
13:10Next steps for the P3 pioneers
The P3 delivery model has now become accepted and established in many states. The likes of Florida, Maryland, Virginia, and California have all successfully closed deals and are now planning for the next generation of projects. While they have been P3 pioneers, they will be the first to acknowledge that there are obstacles along the way.
In this closing session hear from state leaders and developers as they brief the market on lessons learned, their future approach and evaluate the next wave of P3 market opportunities.
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