Public Private Partnerships

Landstar's development history includes the award and completion of both a public-private partnership (PPP) (public sector) and a request for proposal (RFP) (private sector). Those combined amount to over 200,000 square feet, valued currently at approximately 30 million dollars and are provide office space to over 1,200 employees. Landstar advocates the value of PPP's in our economy by their inherent ability to promote the private sectors experience and competitive nature.

PPP's involve a contract between a public sector authority and a private party, in which the private party provides a public service. The government typically supports the project by providing guaranteed annual revenues for a fixed period. A PPP example would be a hospital building financed and constructed by a private party and then leased to a hospital authority.

The study, Dispelling the Myths: A Pan-Canadian Assessment of Public-Private Partnerships for Infrastructure Investments, names the major benefits of PPP's as: cost and time savings and further goes on to assess the benefits and drawbacks of PPP procurements based on recent Canadian evidence. Additional efficiency gains were noted as: lower costs, quicker completion and higher service levels are due to a number of factors — performance-based contracts, risk transfer to private developers, integration of the various phases of a project, the requirement that the private developers finance the costs of the project, and the utilization and integration of the private sectors experience.

The efficiency gains achieved in PPP projects studied ranged from a low of less than one per cent to a high of 61.2 per cent, compared to conventional methods.

In dollar terms, savings ranged between a few million dollars for some projects and more than $750 million in the case of the Autoroute 30 project south of Montreal.

(January 27, 2010: Public-private partnerships for infrastructure save time, money: Conference Board report.)