Worldwide, infrastructure needs to sustain growth are substantial – estimated by the OECD to be USD 6.3 trillion per year between 2016 and 2030 in energy, transport, water and telecommunications infrastructure. Subnational governments – cities and regions – play a vital role in providing and maintaining infrastructure. They are in charge of almost 60% of public investment on average in OECD countries.

The world needs more and better infrastructure. Demand for infrastructure investment has risen and is expected to grow due to many competing pressures. For example, economic growth globally and advances made through technology, along with needed investments to address climate change, urbanisation and demographic changes will require more and better designed climate resilient infrastructure investment. Infrastructure investment is a shared responsibility across levels of government, with subnational governments playing a crucial role. Many key areas of infrastructure – from water to sanitation to transportation to education – are often the responsibility of regional and local governments.

Worldwide, infrastructure needs are substantial. Subnational governments – cities, towns, and regions - play a vital role in the infrastructure landscape. Public-private partnerships (PPPs) represent an alternative to traditional government procurement with the potential to improve value for money. However, PPPs are complex and sometimes risky arrangements that require capacity to undertake them that is not always readily available in government. This chapter offers a general framework for considering subnational public-private partnerships in a multi-level governance context. It does so by drawing on existing literature and building on recent OECD work, incorporating relevant data, and integrating examples from the three case studies included in this report: the case of PPPs in France, the case of local Private Finance Initiative (PFI) projects in the United Kingdom, and the case of PPPs in the US state of Virginia.

This chapter presents a case study of public-private partnerships (PPPs) for infrastructure development in France. The first part of this chapter presents briefly the context for PPPs in France. In the second part, the challenges associated with the development of subnational PPPs are explored by looking at the cases of the city of Caen and Paris. The last section highlights the main findings, challenges and recommendations for foming forward. In particular, it suggests the creation of a a national observatory in charge of collecting data, informing and training local public authorities not only for PPPs, but more broadly for public-private complex infrastructure contracts.

This chapter presents a case study of public-private partnerships (PPPs) for infrastructure development in the United Kingdom (the UK). While PFI is now an historic mechanism, the UK’s history with PFI and the limited attention to the regional and local government experience with PFI in existing literature make the experience at the subnational level particularly worthy of review. The case study explores four areas which can present challenges when implementing subnational public-private partnerships: 1) legal and regulatory arrangements; 2) financing and funding, 3) economies of scale, and 4) local administrative capacity. The case study concludes with a summary of lessons emerging from the UK’s (and particularly England’s) history with PFI at the subnational level.

This chapter presents a case study of public-private partnerships (PPPs) for infrastructure development in the state of Virginia, United States. As one of the first US states to enable PPP procurement, Virginia’s more than 25-year history with PPPs and their governance provide a unique opportunity to study subnational governments’ challenges and success factors in practice. The case study focuses in particular on five categories of challenges: (i) Intergovernmental regulatory coherence; (ii) Financial risks; (iii) Cross-jurisdictional co-ordination; (iv)Administrative capacity and (v) Accountability and transparency. The case study concludes with a summary of Virginia’s major PPP drivers, challenges, and success factors, along with a discussion of lessons learned that can inform other subnational governments.