Public sector

The US economic stimulus package includes $787 billion in federal funds allocated for critical infrastructure such as airports, roads, bridges, ports, utilities, hospitals, schools, railroads, water utilities, sewers, tunnels, prisons, broadband and the electrical grid. Many of these funds are prioritized in favor of green infrastructure in order to reduce energy usage and enhance efficiency. As a whole, these infrastructure projects are expected to stimulate economic activity, create jobs, and address long-standing deficiencies in the nation’s aging critical infrastructure.

In addition to direct investment, the US government is also promoting the use of Public Private Partnerships (PPPs) to get better value for public funds by transferring risk to the private sector. Government organizations will be seeking participation not just from private investors but also from private sector infrastructure firms through PPP, and concession agreements. Executing successful deals in the PPP space requires answers to key questions. For example:

• Have we appropriately identified the potential for value enhancement within the PPP project?
• Are we confident that we fully understand the principle threats to achieving base cash returns?
• Given that achieving material value enhancements is more challenging in the current climate, have we been rigorous enough in considering the likelihood and impact of downside scenarios?

How PwC can help

PwC advises organizations on both sides of PPP transactions — both public and private entities — helping decision-makers evaluate both risk allocations and equity returns.

For more information, contact Peter Raymond or Melanie Thomas Armstrong.