P3 QUICK FACTS
To deliver P3 projects, a public agency will need to acquire or develop new knowledge, skills, and abilities to:
Establish a statutory and policy framework;
Identify, evaluating and developing potential P3 projects;
Conduct procurement; and
Monitor and oversee the concessionaire.
Under a Public-Private Partnership (P3) for highway projects, a private partner may participate in some combination of design, construction, financing, operations and maintenance, including collection of toll revenues. Establishing a Public-Private Partnership (P3) program within a public agency involves issues such as:
To deliver P3 projects, a public agency will need to acquire or develop new knowledge, skills, and abilities that vary by the phase of the project, including:
P3 enabling legislation varies widely among States, but the basic goal is the same: to allow public entities to take advantage of the benefits of P3 project delivery while protecting the public interest. Table 1 presents the factors that State policy makers may consider in creating a legal framework for P3s. The framework may be used to authorize or restrict who may enter into P3 agreements, how partners and proposals may be selected, and what types of agreements may be entered into.
Identifying projects that have the potential to be delivered as P3s early in the planning process can help to position P3 projects for success by ensuring that the P3 delivery model is considered in the scoping, preliminary design and environmental review of the project. Policymakers must consider whether to set up a P3 program or develop P3 projects on a project-by-project basis; and what criteria and process to use for the selection of projects as potential P3s. To evaluate and structure P3 projects, public agency staff will need to be conversant with various evaluation tools, risk allocation considerations and financial considerations.
In the procurement phase public agencies must consider: (1) How to structure a commercially viable P3 agreement that achieves policy goals, optimally allocates project risks, and brings value to the investment; and (2) How to conduct a fair and competitive procurement process to select the best partner and negotiate a final agreement that is transparent and protects the public interest while addressing the private partner's concerns.
P3 agreements include outcome-based performance specifications. After the agreement is signed, the public agency must manage the contract to ensure that it achieves the performance standards established in the agreement. Key issues in managing contract performance are: setting performance standards, monitoring technical and financial performance, assessing payments and penalties for performance, resolving disputes and promoting effective contract governance.
For further Information: See FHWA's Primer on Key Issues in Establishing a Public-Private Partnership Program, available at: http://www.fhwa.dot.gov/ipd/p3/.
|Primarily Statutory Issues: These issues are typically addressed through State legislation.||
|Issues typically addressed through Policy and/or Statute:
These issues may be addressed in legislation to authorize or clarify specific capabilities as necessary, but the details are frequently addressed through program policy.
|Issues typically addressed through Contract and/or
These issues are typically addressed in contracts although the general parameters may be set by statute or policy.
The Center for Innovative Finance Support provides a one-stop source for expertise, guidance, research, decision tools, and publications on program delivery innovations. Our Web page, workshops, and other resources help build the capacity of transportation professionals to deliver innovation.
The Center for Innovative Finance Support's Project Delivery team covers cost estimate reviews, financial planning, and project management and assists FHWA Divisions with statutory requirements for major projects (e.g., cost estimate reviews, financial plans, and project management plans).
The Center for Innovative Finance Support's Project Finance program focuses on alternative financing, including State Infrastructure Banks (SIBs), Grant Anticipation Revenue Vehicles (GARVEEs), and Build America Bonds (BABs).
Public - Private Partnerships
The Center for Innovative Finance Support's P3 program covers alternative procurement and payment models (e.g., toll and availability payments), which can reduce cost, improve project quality, and provide additional financing options.
The Center for Innovative Finance Support's Revenue program focuses on how governments can use innovation to generate revenue from transportation projects (e.g., value capture, developer mitigation fees, air rights, and road pricing).
The Transportation Infrastructure Finance and Innovation Act (TIFIA) program provides credit assistance for significant projects. Many surface transportation projects - highway, transit, railroad, intermodal freight, and port access - are eligible to apply for assistance.