CBO Report: Cost of Private Infra Finance “Roughly Equal” to Public Finance

In fiscal year 2017, federal, state, and local governments spent $441 billion to design, build, operate, and maintain transportation and water infrastructure in the United States. Public-private partnerships are arrangements that are intended to motivate private parties to achieve those outcomes more efficiently by combining project stages (and sometimes private financing) in a way that transfers risk to the private party. Such partnerships are not used very often. The Congressional Budget Office estimates that public-private partnerships have accounted for 1 percent to 3 percent of spending for highway, transit, and water infrastructure since 1990.

Other arrangements that involve private parties do not transfer risk from the government to the private sector and are not a public-private partnership as defined in this report. For example, if the government guarantees the repayment of private financing, the private party is in essence just an intermediary for public financing.

This report assesses whether public-private partnerships have resulted in projects being built more quickly or at a lower cost for taxpayers than other arrangements. The report also examines whether partnerships that include private financing sped up project financing.