Christopher Lee cut his teeth on public-private partnerships 26 years ago as a
He put together a consortium of local investors to build a $1.8 billion, 12-mile toll road in Bangkok. Later, as chief financial officer of the second-largest infrastructure company in Mexico, Lee built toll roads.
After a brief retirement in his mid-40s, Lee got back in the game with his own firm, Highstar Capital, which invests in infrastructure projects in the United States and Europe, such as energy plants, pipeline construction and waste management facilities.
When Congress forced Dubai to divest its interests in American ports, Highstar bought and combined them with several other like businesses, creating Ports America, the nation's largest independent terminal operating company.
In 2009, Maryland selected Ports America for a 50-year, $1.3 billion partnership to upgrade the Seagirt Marine Terminal and stay competitive on the East Coast.
Buoyed by the success, the General Assembly approved legislation last session encouraging public-private partnerships, also called P3s, for other public works projects. On Wednesday, state officials will dedicate Seagirt terminal and its four 40-story cranes.
You really like P3s, even though there are more moving parts involved because of all the government components. What's the thrill in these deals?
I'm very interested in politics, and I like making things happen. I like the complexity of a P3, and I like managing a political process in parallel with the financial process. The history of P3s in this country has not been good. There's been far more failures than successes. Politicians — and by politicians, I mean governments — and private investors don't trust each other, and they don't speak the same language. Particularly after the financial crisis, that level of distrust became much higher. I think it's pretty interesting to bring those sides together and resolve things. In Maryland, Seagirt happened — and it took a while — without a whole lot of histrionics and issues because we had a unique set of individuals in [port executive director] Jim White and Gov. [
Why do so many P3s fail and leave both sides unhappy?
A P3 is completely different than a bunch of guys from Wall Street buying a steel mill. We didn't buy the port of Seagirt from the government and that was the end of it. Yes, Seagirt works because it's a great asset and business is good. But Seagirt is a vital, strategic part of Baltimore's identity, with jobs and economic impact — hence the partnership. If you understand what your partner's objectives are and you're attuned to them, it's like a marriage. There is a presumption that the private sector is going to steal the crown jewels and go back to New York, laughing, and government is going to have to acknowledge that it had its pockets picked. That's a very valid fear. But that's not what we're about. Yes, our investors need to have a decent return, but we're not down here to make seven times our investment. If I had bought the
Where doesn't a P3 work — or is that the kind of challenge you like?
It may be a challenge I like, but it's probably one my investors would like me not to take; after all, it is their money. There has to be a clear and definable cash flow. A P3 for a rail line that runs from
It's a good problem to have, but with lots of states looking at P3s as a way out of a financial bind, do you at some point hit the saturation point where guys like you get maxed out in what you can handle?
I would [have] thought by now there would be a whole lot more of these P3s. In order to get a P3 done, you have to have leadership at the top and you need to convince the bureaucracies that this is a good thing to do. If Gov. O'Malley and I had done the Seagirt deal over the dead bodies of Jim White and everyone else, then the day we took delivery, Jim and the people of MDOT would have been doing everything possible to sabotage us. I wouldn't do a deal like that. I think a lot of states haven't hit the formula to be successful. They talk about it. We only want to do deals where there's value added. We're not interested in buying I-95 from here to Philadelphia just for the sake of owning it, because you're just monetizing an asset.
You recently got the nod to privatize the airport in San Juan, Puerto Rico, the first under a
Well, we'd like to take a look at the airport. I haven't discussed with them what they're interested in doing because the presumption is if they're interested, we'll get one of the first calls, anyway.
Occupation: Founder of Highstar Capital, an infrastructure investment firm managing more than $5 billion dollars in assets