Answer extracted from the Pegasus Radio podcast — listen to the full episode below.
How do public-private partnerships fund US infrastructure when government money is scarce?
P3s allow states to leverage private capital for infrastructure projects when government budgets fall short. Under the DBFOM model, private developers build, finance, operate, and maintain the infrastructure for 30–50 years, shifting the long-term maintenance burden from the public sector while generating toll revenue that funds additional projects.
The structure works because the private partner assumes both the financial risk and operational responsibility, making them highly motivated to build infrastructure that minimizes maintenance costs and operates efficiently. While this approach costs more upfront than traditional public funding—because private companies must earn a profit and maintain higher specifications—states benefit significantly by avoiding decades of asset management.
As Lionel Dore explains in the episode, projects like the $4 billion LaGuardia Airport DBFOM in New York exemplify how large-scale infrastructure gets delivered through this model when public financing alone cannot support the capital requirements.
DBFOM (Design-Build-Finance-Operate-Maintain) is a comprehensive delivery model where a single private entity handles all phases of an infrastructure project: initial design and construction, securing the financing, then operating and maintaining the asset for the contract duration—typically 25–50 years. This integrated approach aligns incentives, since the same organization that builds the asset must live with its maintenance requirements.
The financial mechanic of P3s addresses a core US infrastructure challenge: according to the podcast discussion, American infrastructure typically receives a D grade annually because states lack the billions required to maintain and upgrade aging systems. P3s unlock private capital that would otherwise remain unavailable, allowing critical projects to proceed.
Revenue generation forms another incentive layer. Toll roads, airport terminals, and light rail assets under DBFOM concessions generate user fees that flow partially to the public sponsor, creating a funding stream for complementary infrastructure investments rather than requiring new tax appropriations.
Lionel Dore — Founder of Port Cullis LLC and infrastructure cost consultant. Dore brings 25 years of professional experience, including 24 years in London as a quantity surveyor at Davis Belfield and Everest and Davis Langdon—where he became a partner—before relocating to North America. He has since overseen infrastructure projects ranging from $400 million to $4–5 billion in value for major clients, working directly on airport expansions, toll roads, and light rail systems.
The trade-off is transparency: P3 projects often require higher initial cost estimates because the private developer must cover financing costs, insurance, and profit margins. But as detailed in Pegasus Radio, this premium reflects genuine risk transfer: the public sector no longer bears the cost of 30–50 years of maintenance, operational surprises, or asset deterioration.
Why higher costs deliver real value
The apparent expense of P3 financing must be weighed against the alternative: traditional public delivery followed by decades of public-sector maintenance contracts, staffing, and eventual replacement. A private developer's contractual obligation to maintain the asset at specified performance levels creates incentives for durable design that a public budget-constrained authority might defer or underfund.
Toll revenue generated by these assets creates a virtuous cycle. Motorists, airline passengers, and transit riders effectively pre-finance upgrades and expansion through user fees, reducing dependence on taxpayer appropriations. This funding approach has enabled major airports and highway corridors in the US to modernize without ballot measures or legislative standoffs.
See also
What were the characteristics of Davis Langdon during its peak as a leading QS firm?
Davis Langdon was considered top tier within the QS world and was perceived as the best at what they did during their heyday. Working in the London office meant being part of one of the most prestigious firms in the industry.
How does family background influence entry into quantity surveying as a career?
Lionel's father was a QS at Davis Belfield and Everest, making the path straightforward for him. He started working at Davis Belfield and Everest and eventually became a partner, showing how family connections can open doors in professional services.
What does a high-performing cost management consultant need to deliver client retention and competitive advantage?
You must be so embedded with the client that walking out the door creates a hole in the company's bottom line. Excellence in cost management requires deep integration with client operations and strategic thinking.
Key takeaways
- P3 structures allow states to access private capital for infrastructure when government budgets are insufficient, addressing the chronic US infrastructure funding gap.
- DBFOM agreements transfer long-term operational and maintenance risk to the private partner for 30–50 years, eliminating public-sector carrying costs.
- While P3 projects cost more upfront due to private financing and profit requirements, they deliver value through higher construction standards and guaranteed maintenance performance.
- Toll revenue from P3 assets generates funding streams for additional infrastructure without new public appropriations.