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House of Representatives
Session of 2017 - 2018 Regular Session


Posted: March 8, 2017 12:57 PM
From: Representative Eli Evankovich
To: All House members
Subject: P3 Pilot Program (Former HB2113)
In the near future, I plan to introduce legislation that builds on Public Private Partnership (P3) legislation that I proposed during previous sessions.

In 2013 I introduced House Bill 1838, which proposed definitive guidelines and requirements for the use of P3 agreements by the state, municipalities and school districts to build and/or operate various public facilities, including:
  • Educational facilities,
  • State or local government buildings,
  • Public safety improvements to existing infrastructure,
  • Public parking facilities,
  • Water supply, storm water disposal and waste water treatment facilities and
  • Communications and utility infrastructure.
My latest proposal will both create these guidelines and requirements and establish a P3 Pilot Program, under which twelve P3 projects will be implemented around the state.

A P3 agreement involves a contract between a public sector authority and a private party, in which the private party provides a public service or project and assumes substantial financial, technical, and operational risk in the project. In some types of P3s, the cost of using the service is borne exclusively by the users of the service and not by the taxpayer. In other types capital investment is made by the private sector on the basis of a contract with government to provide agreed services and the cost of providing the service is borne wholly or in part by the government.

There are usually two fundamental drivers for P3s. Firstly, P3s enable the public sector to harness the expertise and efficiencies that the private sector can bring to the delivery of certain facilities and services traditionally procured and delivered by the public sector. Secondly, a P3 is structured so that the public sector body seeking to make a capital investment does not incur any borrowing; rather, the P3 borrowing is incurred by the private sector vehicle implementing the project.

The concept of using P3s to accomplish projects that benefit the general public is not new. In fact, Act 88 of 2012 has spawned many proposed P3 transportation projects that will benefit taxpayers. My bill offers the same opportunity to local governments and school districts to take advantage of the P3 concept to build new sewer facilities, water treatment facilities, school buildings, etc.

Under this bill, approved P3 pilot projects will be exempt from the requirements of the Pennsylvania Separations Act and other similar local government statutes. Proponents of the P3 process believe that P3’s that use a single prime bidding process will lead to greater construction efficiencies and cost savings to benefit the people of Pennsylvania.

While this new proposal takes a bit of a different approach to bringing P3 projects to Pennsylvania, the motivation behind this proposal and prior proposals is the same – to make Pennsylvania more competitive in the national marketplace.

Introduced as HB1891