Public-Private Partnership (P3)
Amtrak has contracted with Plenary Infrastructure Philadelphia (PIP) consortium to design, build, finance, and maintain the station improvements for the next 50 years as part of a public-private partnership (P3) agreement.
What is a P3 Agreement?
A P3 is a contractual arrangement that is formed between public and private sector partners. In this case, the arrangement involves Amtrak contracting with PIP as a private partner to design, construct, operate, maintain the Gray 30th Street Station. As is typical under these arrangements, PIP will invest its own capital and raise any additional financing necessary to design and develop the property.
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Benefits of P3s
P3s allow the costs of investment to be spread over the lifetime of the asset and, therefore, allow this infrastructure project to be brought forward in years compared to the pay-as-you-go financing that was an Amtrak alternative.
P3s have a solid track record of on-time, on-budget delivery.
P3s transfer risks to the private sector and assess penalties for performance standards that are not met by the private sector over an extended period, in this case for 50 years.
P3s can lower the cost of infrastructure to the public entity by reducing both construction costs and overall life-cycle costs.