Given the dire circumstances of most state and municipal budgets, one would expect a boom in private-public partnerships, or P3s, to help finance much-needed infrastructure projects. Not quite. There has been progress in guiding private capital to public works in the United States, but fundamental challenges, most of which are political, remain.

Most industry players expect that there will be a growing role for the private sector in financing and building infrastructure in the United States. It is clear public financing for such projects will fall short, and private equity investors have been raising capital for several years now to capitalize on the relatively steady returns offered by infrastructure assets. But P3 efforts have run into political headwinds, even in states that desperately need to move forward on infrastructure projects.

“The most important factor in moving [P3 infrastructure deals] forward is related to politics,” says Frank