Summit Notebook

Exclusive outtakes from industry leaders

AUDIO – Everything has a cost

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There’s no such thing as a free lunch.

Or bridge. Or turnpike.

Every project we’re talking about at Reuters first-ever Reuters Infrastructure Summit has an enormous cost — sometimes in the hundreds of billions of dollars. And governments are looking for ways to pay for it all.

Enter public-private partnerships (or P3s as we cool, infrastructure types like to say these days). In these deals, governments will lease or sell an asset to a group of investors for a certain big up-front fee and then they will pay the government a certain per-year fee for the right.

For Ambassador Felix Rohatyn, former executive at Lazard Freres and crafter of the New York City economic rescue in the mid-1970s, these are good ideas, but they don’t come without a cost.

Rohatyn, one of the featured guests at this year’s summit and author of a new book on big U.S. infrastructure projects called “Bold Endeavors“, said that in general P3s are a good thing as they should give governments more flexibility to do the things they need to do. But like everything, they carry some risk and officials should go into these deals with their eyes open.

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