In recent years government spending on public infrastructure projects has tightened as policymakers attempt to reign in the ever-increasing national debt. As a result, Public-Private Partnerships (PPPs) have gained traction as a method of confronting the nation’s growing infrastructure challenges. More commonly used outside of the United States, PPPs are contractual arrangements formed between public agencies and private sector partners allowing for private participation in public projects.

The allure of PPPs is that they offer a solution for sharing risk between the public and private sectors and provide a way to move forward with important projects when there were thought to be no feasible alternatives. By enabling private entities to accept a larger role in the planning, financing, construction, operation and maintenance of public projects, PPPs provide increased opportunities and a steady source of revenue for private sector participants. However, this increased responsibility also comes with increased risks and creates new implications for surety relationships.