Model Public-Private Partnership Core Toll Concession Contract Guide
This Guide presents key concepts for the structuring and development of legal contracts for highway transportation Public-Private Partnerships (P3) in the United States. Required of the Federal Highway Administration (FHWA) by the Moving Ahead for Progress in the 21st Century Act (MAP-21), the Guide illustrates how P-3 contracts are developed and structured and explains the major provisions in typical P3 contracts. The Guide is part of a broader effort by FHWA to promote understanding of P3 transactions, which will include a parallel document on availability payment contracts used is some P3 transactions. This Guide is designed to provide industry-standard concepts, relevant common tools and mechanisms, and situational examples applicable to P3 transactions.
On February 6, 2014, FHWA published a draft of the Core Toll Concession Model Contract Guide (the Guide - Docket No. FHWA-2014-0006), requesting comments by March 10, 2014. FHWA received a total of 133 public comments on the review document from State Departments of Transportation, industry organizations, consulting firms, and private citizens. This final version of the Core Toll Concession Model Contract Guide published by FHWA on September 10, 2014 reflects responses to those comments, as well as further clarifications.
For further information please contact: Mark Sullivan, Office of Innovative Program Delivery, 202-366-5785, email@example.com, Federal Highway Administration, 1200 New Jersey Avenue, SE., Washington D.C. 20590; Alla Shaw, Office of the Chief Counsel, 202-366-1042, firstname.lastname@example.org, Federal Highway Administration, 1200 New Jersey Avenue, SE., Washington D.C. 20590; or Prabhat Diksit, 720-963-3202, email@example.com, 12300 W. Dakota Avenue, Suite 370, Lakewood, CO 80228.
Response to Comments on the Draft Core Toll Concession Model Contract Guide
This document provides a summary of FHWA's responses to the 133 comments it received on the draft of the Core Toll Concession Model Contract Guide it published on February 6, 2014, as well as further clarifications made to the final version of the Guide. The majority of the comments focused on the terms of the concession agreement presented in the Guide including terms relating to tolling regulation, benefit sharing, supervening events, changes in equity interest, changes in law, defaults, early termination, and handback. A minority of comments addressed the desirability of public-private partnerships (P3s) as a matter of public policy.
International Public-Private Partnership Synthesis Report
This report synthesizes the findings of a series of reports prepared for FHWA following an international public-private partnership (P3) scan conducted in 2008. The scan, sponsored by FHWA, the National Cooperative Highway Research Program, and the American Association of State Highway and Transportation Officials, led investigators to the United Kingdom, Australia, Portugal, and Spain to study the P3 markets in those countries and bring back transferable lessons for the evolving P3 market in the U.S. The scan resulted in four targeted reports on P3 tools, techniques and projects, as well as a summary report of the scan experience. This synthesis report was created to present the wealth of information from those reports in an accessible format.
The synthesis report contains three sections. The first section summarizes notable P3 practices used in the four scan countries and Canada (included in the analysis but not formally part of the scan trip), including subjects such P3 delivery options, value for money analysis, and risk allocation. The second section provides a brief overview of the development of the P3 market in each of the five countries, accompanied by 12 project profiles of notable P3 projects in each market. The last section is a summary of lessons learned from the scan reports that may be beneficial for actors in the U.S. The 12 project profiles included in the synthesis report share the formatting of profiles on the FHWA IPD website for ease of reference.
Model P-3 Contracts Listening Session (January 16, 2013)
MAP-21 requires the U.S. DOT/FHWA to develop standard model P3 contracts for the development, financing, construction, and operation of transportation facilities. On Wednesday, January 14, 2013, FHWA held a Listening Session for public project sponsors, consultants, private sector contractors, financing institutions, union representatives, concessionaires, and other organizations involved in project development; and members of the general public to provide input as it initiated development of these contracts. Topics discussed included: the design of the model contract template; the scope of the model contracts; and specific provisions included in the model contracts.
Establishing A Public-Private Partnership Program: A Primer
Establishing a Public-Private Partnership (P3) program within a public agency involves issues from enabling legislation through identification, evaluation, negotiation and management of P3 projects. This primer explores key issues involved in establishing a P3 program at a public agency with a focus on P3s for new capacity for highway infrastructure.
This primer contains eight chapters. Following an introduction, Chapter 2 presents the key challenges to successful program development, highlighting organization/cultural changes, coordination, and conserving institutional. Chapter 3 describes the strategies for implementation, including roles, staff building/hiring/training and specialized P3 units. Chapter 4 discusses legal and statutory issues, while Chapter 5 presents methods for identifying, evaluating and structuring P3 projects. Chapter 6 presents information on conducting procurement and Chapter 7 has recommendations for oversight and monitoring. Finally, Chapter 8 includes concluding remarks on the responsibilities and considerations of policymakers as they assume the new role of a performance-based contract manager.
Financial Structuring and Assessment for Public-Private Partnerships: A Primer
This primer addresses Financial Structuring and Assessment for public-private partnerships (P3) and has been prepared as a companion document to FHWA's recent primers on Value for Money Analysis, Establishing A Public-Private Partnership Program and Risk Assessment for P3s. Most P3 projects are financed by using a combination of private equity, debt, and (often) public subsidies. For financial assessment of P3s, it is important to understand these sources of capital, how they are combined (referred to as "financial structure"), and how funds invested in a project are repaid.
This primer contains ten chapters. Following an introduction, Chapter 2 presents the basic concepts of project finance for P3s. Chapter 3 describes the various types of revenue sources that are used with P3s together with their advantages and disadvantages with regard to P3s in Chapter 3. Chapter 4 discusses sources of public sector financing for P3s, while Chapter 5 discusses the various sources of private capital and their incentives and capabilities, including how debt repayments may be scheduled to match projected cash flows to help make the project financially viable. Chapter 6 discusses the role of financial models, focusing on what is analyzed and interpretation of results rather than the details of the modeling process. Chapters 7, 8 and 9 describe the metrics used for financial evaluation by public agencies, equity investors and lenders respectively. Finally, Chapter 10 concluding remarks on the different ways in which financial assessments are used by project sponsors and private developers as P3 projects advance through the procurement and implementation processes.
Risk Assessment for Public-Private Partnerships: A Primer
This primer addresses Risk Assessment for public-private partnerships (P3) and has been prepared as a companion document to FHWA €™s recent primers on Value for Money Analysis, Establishing A Public-Private Partnership Program and Financial Structuring and Assessment for P3s. Project risk management is an iterative process that begins in the early phases of a project and is conducted throughout the project €™s life cycle. It involves systematically considering all possible outcomes before they happen and defining procedures to accept, avoid, or minimize the impact of risk on the project.
The primer contains seven chapters. Following an introduction, Chapter 2 discusses how the extent of risk transfer varies by type of project and type of P3 contract. Chapter 3 outlines the key types of risks faced in P3 projects. Chapter 4 presents analysis of project risks to assess their cost impacts. Chapter 5 explains how risks are optimally allocated between the public and private sectors to minimize total project life-cycle costs. Chapter 6 discusses how costs of risks under traditional and P3 procurements may be incorporated into Value for Money analyses often used to compare the two procurement options. Chapter 7 concludes with a summary.
Value for Money Assessment for Public-Private Partnerships: A Primer
This primer addresses Value for Money Assessment (VfM) for public-private partnerships (P3) and has been prepared as a companion document to FHWA €™s recent primers on Risk Assessment, Establishing A Public-Private Partnership Program and Financial Structuring and Assessment for P3s. The VfM analysis process is used to compare the aggregate benefits and the aggregate costs of a P3 procurement against those of the traditional public alternative. VfM assessment is different from benefit-cost analysis, which determines whether investing in a public sector project is a good use of societal resources. They are also distinct from the process of establishing whether or not a project is actually affordable to the government.
The primer contains nine chapters. Following an introduction, Chapter 2 provides an overview of the VfM analysis process. Chapter 3 discusses discounting of future costs and revenues to facilitate comparison of the procurement alternatives in terms of present value. Two key components of the PSC are life-cycle costs and the costs or risks. They are discussed in Chapters 4 and 5 respectively. Toll revenue risk is discussed separately in Chapter 6. Chapter 7 discusses quantitative assessment of VfM and Chapter 8 discusses qualitative assessment. Finally, Chapter 9 presents a summary with cautionary notes based on experience to date.
Public-Private Partnership Concessions for Highway Projects: A Primer
This primer provides a brief introduction to public-private partnership (P3) concessions for transportation project finance. Although many types of P3s exist, this primer focuses on P3s that involve assumption of financing risk by the private sector, as well as long-term (i.e., 10+ years) operations and maintenance. These types of long-term P3s are typically termed Design-Build-Finance-Operate (DBFO) concessions, because the private sector assumes the obligation to design, build, finance, operate, and maintain a facility for a specified term in exchange for the right to some form of compensation for a specified term.
The primer reviews the basic structure of P3 project finance concessions and introduces the key public and private project participants and their roles. It also describes the motivations of both public and private partners for entering into P3s, presents typical P3 concession characteristics, and clarifies common misconceptions of what P3s can and cannot accomplish. Finally, the primer outlines typical P3 implementation steps and provides recent examples of P3 concessions.
P3 Program Road Map
The FHWA P3 Roadmap identifies initiatives and actions to be implemented by FHWA from 2013 through 2017 to support the development and use of public-private partnerships (P3s) across the United States with a unified approach. The primary audience for these activities is FHWA and its partner agencies within the U.S. DOT as well as external public sector stakeholder organizations and interest groups.
FHWA P3 Program Plan
The FHWA P3 Program Plan identifies initiatives and actions to be implemented by FHWA from 2013 through 2017 to support the development and use of public-private partnerships (P3s) across the United States with a unified approach. The primary audience for these activities is FHWA and its partner agencies within the U.S. DOT as well as external public sector stakeholder organizations and interest groups. P3 Program Plan seeks to achieve the following measurable outcomes:
Improving P3 capacities within State governments to support the consideration and identification of projects for P3 procurement during the planning process; conduct the P3 procurements; and manage P3 contract performance and evaluate post-implementation outcomes.
Value for Money State of the Practice (December 2011)
The 2011 Value for Money State-of-the Practice document was created to assist state practitioners in their P3 program efforts. Value for Money is a uniform process utilized on a case-by-case basis to compare the aggregate benefits and the aggregate costs of a P3 project against those of the traditional public alternative. In addition to the introductory chapter (Chapter 1), the report includes two separate sections: International Methodology and Practice and Methodology and Practice in the United States. The report is a state-of-the practice document. FHWA does not recommend any single approach to analyzing procurement options. FHWA does highly encourage that state practitioners consider some type of analysis when considering P3 procurement options.
Introduction to Public-Private Partnerships (P3s)
Presentation PDF HTML
This presentation prepared by OIPD P3 specialists provides definitions of common P3 terminology, information of the benefits and challenges associated with P3 projects, examples of different types of P3 projects and a review of the financing tools that may be used with P3 project. The intent of the presentation is to:
Advanced Public-Private Partnerships (P3s) Training
Presentation PDF HTML
Q&A Information Website
The Office of Innovative Program Delivery hosted an Advanced Public-Private Partnerships (201 level) webinar that focused on questions from the Colorado DOT with regards to specific issues related to public-private partnerships for High-Occupancy Toll (HOT) lanes. Experts from states that have successfully implemented public-private partnership agreements discussed their experiences and how they have addressed the issues. The webinar is intended for transportation professionals who already have a basic understanding of public-private partnerships.
P3 Primer: An Update on the Burgeoning Private sector role in U.S. highway and Transit Infrastructure
This 2008 report describes the use of PPPs by state and local transportation authorities over the recent past and provides an update of USDOT's 2004 Report to Congress on PPPs (the "2004 Report"). The primary purposes of the P3 Primer are: (i) to explore the growing use of PPPs by state and local transportation authorities, and (ii) to identify the advantages and disadvantages of PPPs as an alternative to traditional approaches to transportation funding and procurement. The substance of this report is set forth in Sections III through VI. Section III defines PPPs and describes their benefits. While the 2004 Report provided a broad definition of PPPs, this report refines and focuses that definition to reflect the increasing utilization in the United States of long-term, concession-based PPPs, a subset of PPPs which have become significantly more prevalent since the 2004 Report was delivered. This section of the report then briefly describes the benefits of PPPs that have been used in the United States and abroad, which were described in greater detail in the 2004 Report. Section IV explores the use of long-term, concession-based PPPs in the United States while Section V describes the advantages of PPPs as an alternative to the failings of traditional approaches to project funding and delivery. Section VI identifies certain risks commonly attributed to PPPs and how they can be managed and evaluated.
Public Policy Considerations in Public-Private Partnership (PPP) Arrangements
This 2009 FHWA report is intended to help frame public policy considerations in public-private partnership (PPP) arrangements. State legislatures and public officials have taken these considerations into account in PPPs. Each state's approach, however, varies depending on a number of factors, including the public sector's policy objectives, the interests of the users, the characteristics of the project and specific risk factors. This report examines how different states have responded to the issues most frequently raised by examining provisions in state law and PPP agreements. The report identifies and addresses 14 public policy issues related to PPPs, based on a review of Congressional and state legislative hearings, publications, and discussions with key federal, state and local decision makers. Each issue is addressed in a separate section that includes (i) analyses of how state transportation departments and other public authorities have addressed the public policy considerations in those areas and (ii) charts detailing legislative and contract provisions that have been used. The findings of the report are based upon the review of PPP agreements for several recent and ongoing partnership projects.
Guidebook on Implementing Public-Private Partnerships
for Transportation infrastructure Projects in the United States.
This Guidebook is intended to assist sponsors and providers of transportation projects take the necessary steps and precautions to promote the successful delivery of P3 project while protecting the public interest, especially the ultimate users of facilities so developed.
Studies of Transportation Public-Private Partnership
in the United States
This report focuses on P3 applications to transportation projects in the United States. It promotes greater understanding of the role of institutional factors in the implementation of P3s.
Studies of Transportation Public-Private Partnership around
This report focuses on P3 applications to transportation projects in England, Australia, New Zealand, Hong Kong, India, Israel, Denmark, Sweden and Argentina, and provides an overview of variety of projects and approaches used to implement P3s around the world.
for Using P3s on Highway Projects
Issued in November 2005, this manual is intended to provide a one-stop resource for States interested in pursuing Public-Private Partnerships and curious as to how Federal requirements apply. Although a summary document itself, it identifies links and references that will provide access to more detailed guidance for anyone interested in exploring a Public-Private Partnership.
of Public-Private Partnership Projects for Roads Bridges & Tunnels
from Around the World - 1985-2004
This August 2005 report presents a synthesis of a comprehensive database of highway infrastructure projects from around the world financed or delivered through some form of public-private partnership (P3). This synthesis provides insights into the nature and extent of highway infrastructure projects that have and are being advanced through various types of P3 contractual arrangements. They also reveal the predominant types and sizes of P3 contracts used in various regions and countries around the world for developing different types of highway infrastructure, including roads, bridges, and tunnels. The results of this synthesis are intended to inform those involved in the development, funding, or delivery of highway infrastructure regarding the worldwide use of P3s to delivery highway and other forms of public use infrastructure.
Report to Congress on P3s
This report, issued in December 2004 by U.S. DOT, answers the questions posed by Congress and attempts to provide a resource document for States interested in using public-private partnerships as a method of procurement. The report is divided into five major sections: history and initiatives, value of public-private partnerships, impediments to their formation, stakeholder comments, and recommendations for removing those impediments. The value section is designed to help States considering public-private partnerships better understand the benefits of such an approach and some of the downsides. This report, however, is not designed to be a manual on how to use public-private partnerships as part of a State program. We have not addressed the myriad issues concerning when public-private partnerships should be used and how they should be negotiated. The report focuses on the questions posed by the House Report language and provides the background necessary to provide context for the answers to those questions.
Office of International Programs: Contract Administration:
Technology and Practice in Europe
In June 2001, a team comprised of Federal, State, contracting, legal, and academic representatives traveled to Portugal, the Netherlands, France, and England. Their mission was to investigate and document alternative contract administration procedures for possible implementation in the United States.
The scan team discovered that European highway agencies appear to be better at exploiting the efficiencies and resources that the private sector offers, through the use of innovative financing, alternative contracting techniques, design-build, concessions, performance contracting, and active asset management. European agencies have created contracts that focus on the users, while seeking to allocate risk appropriately and establish an atmosphere of trust in the implementation of procedures. The United States can directly and immediately employ many European procedures to help cope with its most urgent transportation needs. The report discusses these European techniques in terms of procurement, contract types, and payment mechanisms.
The report addresses the following subjects: best-value selection, performance specifications, design-build, shadow tolls, public-private partnerships, concessions, and design-build-operate-maintain.
Partnerships for Highway Infrastructure: Capitalizing on International
FHWA, AASHTO, and NCHRP sponsored a scanning study to collect information about P3 programs for highway infrastructure in Australia, Portugal, Spain, and the United Kingdom, where P3 experience is more extensive. In this publication, the scan team reports that P3s are an effective strategy for delivering highway projects, and they are service arrangements as much as financial ones. The team observed that potential P3 projects must be analyzed and structured thoughtfully to preserve public interests and that managing the partnership over the life of the contract is critical to providing the services expected. Team recommendations for U.S. implementation include convening workshops, developing training guidelines, establishing an expert task group, developing a research strategy, and publishing principles and guideline documents on P3 topics.
Innovative Finance Quarterly
This quarterly newsletter, published by FHWA, provides information on the latest developments in Federally-sponsored innovative finance programs, such as TIFIA, GARVEE Bonds, and SIB transactions. It also features descriptions of innovative projects and programs of interest launched by state DOTs around the country. The newsletter also tracks legislative changes. Copies of all issues of the Quarterly dating back to 1997 are available on the FHWA Innovative Finance website, together with copies of FHWA's earlier Innovative Finance Newsletter.
Toll Road Activity in the U.S.A. Survey and Analysis
This white paper summarizes current toll road activity in the U.S. through 2008 including an analysis of existing toll facilities constructed since ISTEA, as well as those currently being planned, designed, or constructed.
Overview of Key Enabling and Sample Provisions: State PPP Enabling Legislation for Highway Projects
This document prepared by Nossaman LLP in 2005 provides an overview of 28 key elements for P3 enabling legislation for highway projects, together with an explanation of their importance, and sample provision text for each of the elements.
Key Elements of State PPP Enabling Legislation for Highway Projects
This document prepared by Nossaman LLP summarizes those states with P3 enabling legislation and how they met the 28 key elements outlined in the overview document above as of December 2007.
Model Legislation for States Considering P3 Authorization
This model P3 legislation is based on a survey of existing state statutes that authorize public-private initiatives. It provides states with an example of what basic elements to consider and address in P3 authorizing legislation. It is meant to serve as a representation of the core provisions dealing with issues that a state should consider when pursuing greater private sector involvement in the delivery of transportation services. Users are advised that the model legislation cannot anticipate the relationship of state laws with the model provisions contained within it. This model legislation has been prepared solely for informational purposes and should be not construed as a statement of USDOT or FHWA policy.
Financing Freight Infrastructure Guidebook
This guidebook developed by FHWA's Office of Freight Management and Operations and Office of Planning provides information on funding financing tools available for freight improvements and case studies of freight financing. Private sector options for financing freight needs are presented and noted among the case studies were relevant.