In recent years, Colorado’s construction industry has been booming. Because of this, the public sector has launched several economic-boosting construction projects to improve public transit. Several expansion projects of major highways and interstates running through Denver have brought in hundreds of construction jobs for the area. Many of these projects have been funded by Colorado’s public private partnerships, or P3 projects.
One of the most recent successes of the P3 projects is the construction of additional lanes to U.S. Route 36. This project would not only make commutes easier for Colorado residents and traffic easier to navigate for visitors, but it brought in $2.2 billion to the Colorado economy. The expansion of U.S. 36 was named the Eagle P3 project, one of the first successful P3 projects in the Denver metro area.
The project called for acquisition of 56 commuter rail cars and funding for the railway’s maintenance facility. Because of the scale of the project, which exceeded the budget of the public sector, the P3 fund acquisition method was tested. In a public private partnership, private investors raise a majority of funds and therefore take on the greater share of risk in the project. Public sector funding came from federal grants, loans, and state sales taxes.
Most public projects do not take on this model of funding, unless they meet the following criteria for a P3 partnership:
The scope of the project requires more than $100 million in investments
The construction will be owned by the public sector once the money is repaid
The project is based on a public need and is approved by public vote
The project must generate income during and after its completion
An agreement is in place that returns the assets to to public entity.
The Eagle P3 project generated hundreds of jobs for the state of Colorado. With each of these projects, the P3 funding delivery method will hopefully encourage larger scale projects and a continual growth of the construction industry within the state. The construction job market is slowly recovering from the 2008 recession, and these road and railway projects have attracted workers from outside the state to join Colorado’s workforce.
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