Op-ed by Eric Singer & Andrej Micovic, P3 Group. Sun Sentinel, July 19, 2019
Residents of Miami, where our law firm Bilzin Sumberg is based, need no reminder that South Florida is on the front lines of the battle against climate change — particularly during hurricane season.
Fortunately, many of our region’s municipalities have been proactive in prioritizing resiliency. The City of Miami, Miami Downtown Development Authority and the Urban Land Institute recently convened experts from across the U.S. to study climate-related threats in and around the city’s urban core.
The experts provided a suite of recommendations for adapting to climate change and preserving a good quality of life along the waterfront, including installing living shorelines, prioritizing green infrastructure and accessing sustainable financing tools.
While our community is doing more than many cities to become resilient – including a multi-million dollar upgrade to the county’s sewer system and Miami Beach’s installation of storm-water pumps and tidal control valves – uncertainty remains over how to pay for long-term solutions such as desalination plants and raised roadways.
Fortunately, there is a proven model for funding, constructing, operating, and maintaining large-scale infrastructure projects that will make our community more resilient: public-private partnerships. P3s, as they are known, are contractual agreements between a government and a private entity in which the private sector takes on the risks associated with developing, financing, operating, and maintaining public infrastructure. P3s are a cost-effective approach to building critical infrastructure projects in less time, while minimizing the public sector’s risk.
In a properly structured P3, the private partner does not earn a return on its investment if the infrastructure becomes unavailable for use by the public.
For example, if a company were responsible for redeveloping coastal roads and keeping them operational over the next 40 years or more, then the private partner will have every incentive to design and deliver roadway improvements that can meet that challenge.
And if the company makes the wrong bet — such as raising the road by only one foot when two feet were needed — then it will endeavor to rebuild the road as quickly as possible. After all, for every day the road is underwater, the private partner and its investors lose money.
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