Public private partnerships are an effective and heavily-used public finance tool internationally and seem to be gaining traction in the U.S. especially in certain states.
"Much of the P3 activity has been focused in 12 states across the country in those places where they're generally more populated or growing in population more quickly," said Baruch Feigenbaum, senior managing director, transportation policy, for the Reason Foundation.
"It's been a pretty important tool in Virginia, Georgia, Florida, North Carolina, and Colorado. We've seen them become very popular."
The comments come in conjunction with an extensive
The report reveals that, "over the past 35 years, 40 U.S. highway P3s and three U.S. transit P3s have reached financial close."
The number is considered small when compared to what's happening internationally but "the pace of P3 projects in the U.S. has accelerated over the past 10 years."
In 2025 alone the rest of the world closed 50 P3 projects with a rounded value of over $30 billion. Asia accounted for 30 of them.
The largest U.S. based project is the
The
Some P3 proponents see tolled highways as a solution to returning the Highway Trust Fund to solvency.
"P3s can be successful in attracting much-needed investment in replacing the U.S.' first-generation, largely non-tolled Interstate highways, which are nearing the end of their useful life," per the report.
"Such projects should be particularly attractive to pension fund investments, since they are lower risk than greenfield projects."
P3s can take several forms and are often evaluated in terms of how risk is apportioned between the parties.
According to the report, most new P3 projects in the U.S. use a Design Build Finance Operate Maintain model with terms ranging from 30 to 70 years.
"Since 2012, the majority of highway concessions have used toll-revenue-based financing. Transit projects need to use Availability Payment-based financing because they do not generate sufficient revenue in the U.S."
In the AP model, a government agency pays a private consortium to build, operate, and maintain an asset.
Payments start when the facility is completed and are contingent on the asset meeting specific performance and availability standards, not on usage levels.
AP is considered a low-risk arrangement for the agency, as long as the funding needed to make the payments is reliable.
Public debt plays a key role in P3s with a finite level of private activity bonds often leading the way.
Tax exempt PABs are dispensed through the states and are volume capped depending on population levels.
"There is some concern because of the cap, some projects have tried to speed things up to try to get in before the cap," said Feigenbaum.
"Others are worried, because even though there's a surface transportation reauthorization in Congress, it takes forever. The finance committee, not the policy committee is the one that has to do the tax treatment, and they haven't done anything yet."
Some lawmakers, affordable housing advocates, and the U.S. Department of Transportation, which has already hit its cap, would like to see the cap
The port sector is also
Budget hawks point to the loss of tax revenue and a budget deficit spiraling out of control.
The Trump administration remains bullish on leveraging P3s in highly visible projects including a planned $8 billion renovation of New York's Penn station that was announced
