There are those who don’t completely understand how public-private partnerships work. That’s because P3s, as they are known, are relatively new in the U.S. and even more so in Hawaii.

There has always been a “public-private partnership” on the rail project, with government contracting to private firms to design and construct the rail project. For instance, HART (Honolulu Authority for Rapid Transportation) isn’t building the rail stations. Local construction firms Hawaiian Dredging and Nan Inc., are.

What is new with the P3 for rail recently adopted by the HART board of directors and endorsed by Mayor Kirk Caldwell, City Council Chairman Ernie Martin and the rest of the City Council, among many others, is that we are now asking the private sector to provide private finance to cover a significant portion of the costs during the construction period.

Additionally, the winning bidder will take on the long-term operations and maintenance of the system and will have to ensure that the rail system maintains a high level of performance throughout its life.

One misconception is that P3 means that rail is being privatized. It is not, and the city will continue to own the assets of the completed project. Nor are the sources of funds changing, which still are derived from public sources. Social issues such as equal access, station accessibility and land use remain public issues subject to public hearings and are in no way under the control of the private sector.

Increased competition is expected from international and local firms, and there are several who already have expressed strong interest in participating in this partnership. The private financing will not be paid back until the train is in operation and meeting a high bar of performance and quality. This is the type of cost and schedule performance that was missing in the past and is sorely needed to finish this project.

HART’s proposal is for a 10-year private finance component, with all debt under the P3 repaid in the same timeframe as it was prior to consideration of P3. The debt is not for 30 years and not extended out for future generations to handle as some would lead you wrongly to believe.

In recent years, P3, and more specifically, “design- build-finance-operate-maintain” or” DBFOM,” have gained popularity around the world to specifically address the issue of large and complex infrastructure projects managing their costs and schedule better than local governments have been able to and to better maintain the finished products over their lifetimes, making sure they are properly maintained to provide quality service.

The private sector has responded by developing the capability, expertise and resources to address these issues and to work together with government in improving performance on such projects. In fact, the only reason for us to even consider P3 would be if it might prove to be better than doing things the same way we’ve always done them.

Most would agree that hasn’t worked out too well for the rail project. It was incumbent upon HART and its board of directors to at least explore a P3 solution, and over the course of nearly a year, it became apparent that this is a project delivery and asset management approach that offers clear benefits to the Honolulu rail project and to the people of Honolulu.

Damien Kim chairs the board of directors for the Honolulu Authority for Rapid Transportation (HART).