Rohatyn not sold on public-private partnerships

By Nick Zieminski

NEW YORK (Reuters) - Public-private partnerships to finance U.S. infrastructure projects provide few advantages that publicly funded construction cannot accomplish on their own, former ambassador and financier Felix Rohatyn told the Reuters Infrastructure Summit on Wednesday.

Rohatyn instead advocates the creation of a National Infrastructure Bank as a way to coordinate and finance projects such as repairing public schools or creating high-speed rail corridors between major urban centers, while weeding out wasteful spending.

"I've never been sold on this idea of public-private partnerships, because I don't see anything here that is unique to the project, so all of the things you're looking at, you can get out of the private sector or out of the public sector," Rohatyn told the Summit.

"One shouldn't have the illusion that you can get miracles by these things," he said.

Public-private partnerships (PPPs) typically involve long-term leases of public assets run by private companies that collect tolls or other fees in return for an upfront payment.

Critics charge that the economics of these deals are such that upfront concession payments are unlikely to match the long-term value of the higher tolls that will be paid by future generations and not collected for public uses.

Such partnerships could sometimes win financing that might not be available to a purely public entity, Rohatyn said, but in many cases the ultimate cost proves higher once private players are involved.

FUNDING INFRASTRUCTURE