Delivery of Public-Private Partnerships for Infrastructure
Journal of Construction Engineering and Management, American Society of Civil Engineers, ASCE, 133(12), 918-931. Abdel Aziz, A. M (2007).
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Two common approaches have been used by governments for the implementation of public-private partnerships (P3s): a finance-based approach that aims to use private financing to satisfy infrastructure needs, and a service-based approach that aims to optimize the time and cost efficiencies in service delivery. The implementation of P3s, however, may suffer from legal, political, and cultural impediments. In the United States, the federal government enabled a number of acts to ease the impediments and promote P3s for infrastructure development. Based on a detailed analysis of P3s in the United Kingdom and British Columbia, Canada, this paper describes principles that would characterize the implementation of P3s at the program level (e.g., whether the implementation is successful). The principles pertain to the: availability of a P3 legal framework and implementation units; perception of the private finance objectives, risk allocation consequences, and value-for-money objectives; maintenance of P3s process transparency; standardization of procedures; and use of performance specifications. Guidelines for successful implementation are explained and discussed in the context of the United States P3s experience and impediments.
Survey of the Payment Mechanisms for Transportation DBFO
(P3) Contracts in British Columbia"
Construction Management and Economics, 25(5), 492-543 (London, UK). Abdel Aziz, A. M (2007).
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In traditional project delivery systems, payment mechanisms provide compensation for the work performed using construction capital payments. In the alternative public-private partnership (P3) systems, payment mechanisms follow the selected P3 system. For example, the build-operate-transfer system provides compensation based on project demand using real-tolls usage payments; the design-build-finance-operate (DBFO) system provides shadow-tolls usage payments; and the performance-based DBFO system provides compensation based on contractor's performance using service availability payments. Designing the payment structure is an important task where several factors have to be considered. This paper analyses the implementation of payment mechanisms in a number of DBFO transportation projects in BC, Canada, in terms of payment structure, payment types and characteristics, determination and funding. The analysis provides insights for the design of payment mechanisms. The analysis shows that more payment types are being used and that the mechanisms are designed to achieve specific government objectives. The analysis refers to a new ‘hybrid' payment mechanism with elements derived from the traditional and the P3 systems. The hybrid system may have potential to minimize the overall project cost; however, agencies have to be flexible in the delivery concepts as combinations of payments for inputs, usage and services might have to be used.
Structure for Government Requirements in Public-Private
Canadian Journal of Civil Engineering, 28(6), 891-909. Abdel-Aziz, A. M. and Russell, A.D. (2001).
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A spectrum of requirements for the procurement of public infrastructure under various public-private partnership arrangements has been communicated by governments to the private sector participants. This paper suggests a structure for these requirements and demonstrates how they have been realized in public-private partnership projects. Government requirements are categorized and described under a structure of three dimensions: rights, obligations, and liabilities. Each dimension is further defined and explained through a number of attributes. The structure provides insights as to the basis for the different modes under public-private partnerships such as build-operate-transfer, build-own-operate-transfer, and build-transfer-operate. The structure is used to examine government requirements in a number of public-private partnership transportation projects. The results show that, for each dimension and its related attributes, comprehensive and clear articulation of government requirements is generally needed. This will reduce the amount of supplemental materials issued for the request for proposals, help consortiums in responding with proposals that can fit the requirements and reduce the amount of time spent in negotiations and (or) the need for contract amendments to reflect marketplace realities missed earlier.
Partnerships and the Development of Transport Infrastructure:
Trends on Both Sides of the Atlantic"
First International Conference on Funding Transportation Infrastructure. Perez, Benjamin G. (PB Consult) and James W. March (FHWA). Institute of Public Economics at the University of Alberta. (August 2006).
This investigation focuses on how forces - such as the will of the government to extract resources to meet the public's needs and the extent to which the national economy can produce them - have shaped the use of P3s in developing transport infrastructure in Europe and the United States. It begins by describing the different ways the public and private sectors collaborate to develop transport infrastructure in the United States and then compares recent experience and emerging trends in P3 applications on both sides of the Atlantic.
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 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.
During 2003 and 2004 the Federal Highway Administration (FHWA), in cooperation with the Office of the Secretary of Transportation, sponsored a series of workshops on the topic of public- private partnerships (P3s) and their applicability to the nation's highway development program. The P3 workshops were designed to educate transportation decision-makers in state and local legislatures and transportation agencies about P3s and their potential to help leverage scarce public resources to address urgent transportation facility needs. An initial mini-workshop was held in Washington, D.C. as part of the 15th anniversary celebration of the redevelopment of Union Station as one of the nation's premier public-private partnerships. This was following by six P3 workshops in Washington/Oregon, Minnesota, Texas, Florida, California, and North Carolina.
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.
Public-Private Partnership Pilot Program (Penta-P)
The Public-Private Partnership Pilot Program, known as Penta-P, was authorized SAFTEA-LU for certain new "fixed guideway capital projects," meaning public transit systems that use rail or a dedicated road, such as a bus rapid transit system. The pilot program will allow USDOT to study whether public-private partnership projects speed completion, allow more reliable projections of project costs and benefits, and improve project performance. The pilot will study projects that, among other things, use methods of procurement that integrate risk-sharing and streamline project development, engineering, construction, operation, and maintenance. The amount and terms of private investment in such projects is a significant factor in selecting projects to participate in the program.
Report to Congress on the
Costs, Benefits, and Efficiencies of Public-Private Partnerships for Fixed
Guideway Capital Projects
This report responds to a SAFETEA-LU requirement and is intended to identify and examine the costs, benefits, and efficiencies of applying P3 delivery approaches to transit projects.
the Public Interest: The Role of Long-Term concession
Agreements for Providing Transportation Infrastructure
USC Keston Institute for Public Finance and Infrastructure Policy
Written by Jeffrey Buxbaum and Iris Ortiz of Cambridge Systematics, Inc. this paper explores the confusion and controversy surrounding long-term concession agreements has come about because they have been promoted as silver bullets, as essentially free money provided by the private sector that will not require new taxes or fees. But users of the facilities will have to pay, and how users pay will be very different from how they have paid in the past. These new models may in fact prove to be more equitable and efficient than the old methods, but the negative reaction in some quarters to the initial agreements highlights the need for careful analysis and transparency going forward. The report explores the recent long term lease transactions of the Chicago Skyway, Indiana Toll Road and other potential transactions in those two states as well as Texas, Virginia and other domestic locations. The report identifies a number of potential strategies to address public concerns regarding public sector decision making including, conflicts of interest between the public and private sectors, and how contract terms can affect price levels and pubic control.
by Dollars: What States Should Know When Considering Public-Private Partnerships
to Fund Transportation
Pew Center on the States
This report analyzes Pennsylvania's unsuccessful effort in 2008 to lease the Pennsylvania Turnpike to private investors. The report provides valuable lessons for other cash-strapped states seeking to fund their highways and bridges. It identifies the information states need and the issues they should deliberate when exploring P3s to fund infrastructure improvements.
According to the report, states considering public-private partnerships should have clear, data-driven answers to questions in the following four categories: (1) Examining the Options - the Decision-Making Process; (2) Let's Make a Deal - the Deal-Making Process; (3) Show Me the Money - Financial Analysis; and (4) Who Will Mind the Store? Oversight and Service Provision.
How States and Territories Fund Transportation: An Overview of Traditional and Nontraditional Strategies
National Governors Association Center for Best Practices
This report is designed to provide states with an overview of traditional funding mechanisms, profiles of new and innovative programs at work in the United States and overseas, and a summary of each state's surface transportation funding approaches. The report covers state-driven mechanisms only and is meant to help states identify strategies to consider in addressing their revenue needs alongside federal and local approaches. P3s are discussed among the nontraditional and innovative financing mechanisms, and the report highlights which states are authorizes and have used P3s or surface transportation projects.
Innovative State Transportation Funding and Financing: Policy Options for
National Governors Association Center for Best Practices
This paper presents the basic state policy options for funding transportation and outlines recent innovations by: (1) providing case studies of state and international experience with a full range of policy options; (2) addressing new options that have emerged; (3) summarizing new developments in P3s; and (4) detailing financing options, such as congestion pricing, which establish a price signal to users that can both raise revenue and encourage more efficient use of the transportation infrastructure. Each chapter provides a description of a different type of innovative financing or funding approach or ways to address demand; best practices from the United States and abroad; and additional considerations for states that are considering these options. Chapter 6 deals with the recent interest in P3s by discussing innovative procurement, design-build strategies, concession agreements, and other ideas.
Foundation Annual Privatization Report 2009
Reason Foundation's 23rd Annual Privatization Report details the latest trends and examples of how public officials are reducing costs and improving service delivery through public-private partnerships, outsourcing, and performance-based government. The surface transportation component of the report contains information on new P3 toll roads, the leasing of existing toll roads, HOT/managed lane projects underway, overseas concession projects, and a look at China's growing effect on private capital.
Ten Myths and Facts on Transportation Public-Private Partnerships
This report authored by the Reason Foundation in conjunction with the Buckeye Institute for Public Policy Solutions aims to clarify 10 prominent “myths” about P3s and describe the corresponding “facts.” The report is designed to inform transportation infrastructure decision making following the 2011 legislative authorization permitting the Ohio DOT to enter into transportation P3s and the long-term lease of the Ohio Turnpike to private investors, separately authorized in that year’s state budget. In 2012, the Ohio DOT announced the formation of an internal Division of Innovative Delivery that is helping to identify alternative funding solutions for transportation initiatives, capitalizing on this new authorization in the face of traditional funding shortfalls.
Highway Public-Private Partnerships: More Rigorous Up-front Analysis Could
Better Secure Potential Benefits and Protect the Public Interest
In producing this report, GAO was asked to review: (1) the benefits, costs, and trade-offs of public-private partnerships; (2) how public officials have identified and acted to protect the public interest in these arrangements; and (3) the federal role in public-private partnerships and potential changes in this role. As input into the study, GAO reviewed federal legislation, interviewed federal, state, and other officials, and reviewed the experience of Australia, Canada, and Spain. GAO's work focused on highway-related P3s and did not review all forms of public-private partnerships. GAO recommends that Congress consider directing the Secretary of Transportation, in consultation with Congress and other stakeholders, to develop objective criteria for identifying potential national public interests in highway P3s.
Using Public-Private Partnerships to Carry Out Highway Projects
This Congressional Budget Office study was prepared at the request of the Chairman of the Senate Budget Committee and focuses on the following questions: (1) What are public-private partnerships and how often are they used? (2) Does private financing increase the resources available to build, operate, and maintain roads? (3) Do public-private partnerships build roads more quickly or at a lower cost? The report finds that private financing will increase the availability of funds for highway construction only in cases in which states or localities have chosen to restrict their spending by imposing legal constraints or budgetary limits on themselves. The reason is that revenues from the users of roads and from taxpayers are the ultimate source of money for highways, regardless of the financing mechanism chosen. On the basis of evidence from a small number of studies, such partnerships have built highways slightly less expensively and slightly more quickly, compared with the traditional public-sector approach.
Public Works Financing newsletter's specific focus since 1988 has been on public-private partnerships in infrastructure finance. Its experienced editorial staff provides projects leads, detailed project case studies, news analysis, business and political trends, plus a directory of 36 of the industry's most experienced consultants. In addition to monthly issues, PWF publishes a database each October of over 2,200 P3 projects that are planned, being built or operating around the world.
Infrastructure Journal is a British publication and website dedicated to P3s across all sectors. Infrastructure Journal also prepares P3 case studies and organizes conferences. It is an international forum with 29% of its reader distribution in Europe, 17% in Asia, 31% in North America, 18% in Latin America, and 5% in the Middle East and Africa. Its readership includes public officials, lawyers, consultants, contractors, commercial lenders, multilateral and bilateral lenders, development agencies, and project sponsors and developers.
Over the past twenty years INNOVATION BRIEFS have become "must reading" for thousands of legislators, public officials, business leaders, newspaper editors and transportation professionals. The Briefs' critical commentaries and incisive analysis of current events keep readers in touch with trends and ideas in the transportation world without subjecting them to an information overload. Its editorial policy is to maintain an independence of views, while striving to remain balanced and objective in its coverage. Innovation Briefs are published by C. Kenneth Orski, a public policy consultant and former principal of the Urban Mobility Corporation.
The Bond Buyer is the definitive source of up-to-date information on bond offerings in the United States . It is available by subscription only, in both on-line and paper format. The paper is updated daily.
Project Finance provides strategic information, news, and forecasts and trend analysis on the project finance markets. It contains features on countries, infrastructure surveys by region and sector, and agency and development bank news. It offers periodic industry- and region-specific special issues and maintains a team of 22 journalists who track current developments around the world.
TOLLROADSnews, a publication specializing in tolling, describes this emerging service business and documents the debates and controversies. It provides descriptions of new toll projects around the world, analysis of political, legal, and economic problems of toll projects, information on toll technologies, and reports on ongoing operations of toll agencies and projects.
Published by Dow Jones & Company, Inc., the Wall Street Journal is one of the most respected daily financial newspapers in the world. It carries information on all aspects of finance and is used as a reference by nearly all financiers.
News Record (ENR)
ENR, the weekly engineering industry magazine, has online access. Recent articles are listed by topic, such as transportation or finance. The site also provides up to date construction pricing information, indicating recent cost trends for key construction materials.
American Association of State Highway Transportation Officials (AASHTO) Journal is a weekly publication that covers legislative and regulatory news on transportation. The AASHTO site search engine references previous volumes of the journal but without specific article references.
Parliamentary Inquiry into Public-Private Partnerships (2006)
The purpose of this inquiry was to assess whether P3s are being managed efficiently and effectively, not whether or not they should be used. It compared Australian institutional arrangements with national and international best practice. The inquiry found that Government guidelines for P3s were open to interpretation and were not being applied consistently, that conditions which led to P3 arrangements were seen as less than transparent, and that there needs to be more of a focus on the ongoing evaluation and monitoring of projects over their whole life. The inquiry examined ways in which knowledge sharing about the development and operation of P3s can be improved, to increase the level of P3 management expertise across the public sector and thus increase value for money.
The Partnerships Victoria policy, introduced in 2000, provides the framework for a whole-of-government approach to the provision of public infrastructure and related ancillary services through public-private partnerships. There are 19 Partnerships Victoria projects in existence worth around $9.5 billion in capital investment.
Canada (Building Canada)
Infrastructure Canada was established as a department in August 2002. Since then, the department, among other things, has worked to provide a focal point for the Government of Canada on infrastructure issues and programs through the Building Canada plan, a historic $33 billion infrastructure plan. Under Building Canada, the nation's most important economic and environmental priorities are being addressed through targeted and based-funding programs. One of these programs is the $1.25 billion P3 Fund. This fund will support innovative projects that provide an alternative to traditional government infrastructure procurement. A new federal P3 office will also be established.
Partnerships British Columbia is a company responsible for bringing together ministries, agencies and the private sector to develop projects through public-private partnerships. As a company registered under the Business Corporations Act, Partnerships BC is wholly owned by the Province of British Columbia and reports to its shareholder the Minister of Finance.
Council of Canada
The Canadian Council for Public-Private Partnerships was established in 1993 as a member-sponsored organization with representatives from both the public and the private sectors. As proponents of the concept of P3s, the Council conducts research, publishes findings, facilitates forums for discussion and sponsors an Annual Conference on topics related to P3s, both domestic and international.
Board of Canada Steering a Tricky Course: Effective Public-Private Partnerships
for the Provision of Transportation Infrastructure and Services
This study asks the question: what are the factors that make for successful P3s? To help answer it, the study offers three case studies, two in Canada and one in the U.K. The Confederation Bridge P3 (linking Prince Edward Island to New Brunswick) shows that project risks can be successfully transferred to the private sector and underscores the importance of having the procurement authority adapt its role to the requirements of a P3. The London Underground P3s demonstrate the use of innovative output-based performance measures, but they also show that significant uncertainty about major costs (such as upgrades to legacy assets) can impair the effectiveness of risk transfer to the private sector. As well, these P3s suggest that governments should be cautious about imposing P3 delivery methods on lower levels of government. Finally, the Montreal metro project, which was not a P3, provides insights on the importance of thorough project planning and the value of extensive due diligence.
for Successful Public-Private Partnerships
This document was designed as a practical tool for P3 practitioners in the public sector faced with the opportunity of structuring a P3 and of integrating or "blending" European Communities grant financing in P3s. The report is to focus on a number of critical issues influencing the successful integration of public grants, private funds, IFI loans (such as the EIB or EBRD) and European Commission financing. Reference is made to a number of analytical techniques which are well known and documented. These are not presented with the objective of promoting a standard methodology but rather in an attempt to highlight areas in which particular care and analysis needs to be observed. The Guidelines are not designed to provide an exhaustive list of P3 structures nor present any structures as having the endorsement of the Commission. The Guidelines present five thematic parts dealing in turn with:
Book on P3 Case Studies
The growing interest in the development of P3's was confirmed by the request, put forward by representatives of Candidate Countries, to complement the Guidelines with examples of actual projects in order to better understand the practical implementation issues. Following this request, the Commission has developed this Resource Book, consisting of a set of case studies of P3s in both Western and Central Europe and in various sectors including: Water and Wastewater Management, Solid Waste Management and Transport. These sectors are representative of those in which the Commission has provided grant financing. While they are not the only sectors in which P3 principles are being applied, they do provide a balance between sectors with a considerable history of P3 application such as transport and those in which it is relatively new and encountering specific issues.
Finance of Transport Infrastructure Projects Value and Risk Analysis of
a Finnish Shadow Toll Road Project
This dissertation investigates the characteristics of a feasible framework for private finance of road infrastructure projects using one case project as an aid, which is analyzed in depth. The research makes an effort to find out whether private finance of road infrastructure projects is able to bring additional benefits for the state and the project investors and whether private finance is applicable from their viewpoints.
Finance Initiative: strengthening long-term partnerships
United Kingdom Treasury
This publication builds on measures introduced since 2003 that explain the UK's approach to its Private Finance Initiative (PFI) program, setting out further improvements to PFI to support its ongoing important role in delivering better public services. The Government sees PFI continuing to play a small but important role in the overall objective of delivering modernized public services. It will continue to be used only where it can demonstrate value for money and is likely to continue to comprise around 10-15 percent of total investment in public services.
Central Public-Private Partnership Unit of the Department of Finance
The Central Public-Private Partnerships Policy Unit in the Department of Finance was established to provide optimum support for the development of the P3 process. The key function of this unit is to develop the legislative framework, technical and policy guidance to support the P3 process and to disseminate best practice in P3s.
Partnerships UK is a joint venture that acts as a public-private partnership developer, working in partnership with public bodies.
The Scottish Futures Trust is a Government-owned company set up to improve public infrastructure investment. Established in September 2008, SFT pursues value for money by operating across the whole public sector and by delivering benefits and savings wherever possible at each point in the infrastructure investment cycle. From needs identification, options investigation and investment appraisal; through financing, procurement, design and construction; to life cycle management, maintenance and disposal, the SFT offers value and professional expertise.
Transport Infrastructure Investment: Options for Efficiency
Full Report PDF
This OECD report examines principles for determining the most appropriate models for investment in surface transport infrastructure. Public-private partnerships (P3s) have attracted much attention in recent years. Appropriately designed, P3s have the potential to allow for important efficiency gains by transferring the responsibility for long-term cost management to private organizations that are intrinsically motivated to reduce overall costs in pursuit of profits, including by way of innovation. But P3s are complex arrangements, with many pitfalls. Much surface transport infrastructure does not lend itself to P3s, so the true role for these instruments in the overall system has to be carefully defined. Governments are faced with a complicated set of options for investing in infrastructure. In all likelihood, different elements of the surface transport system will employ different models, including various degrees of user charging. One of the greatest challenges is in ensuring consistency across the system.
This report begins in Part I with a discussion of the overall challenge of providing surface transport infrastructure, including a description of the available models. It also provides an overview of the current situation observed around the world. Part II discusses the fundamental question of how borrowing for the creation of surface transport infrastructure should be treated in public accounts. Part III considers the potential benefits of using different models for the provision of infrastructure. Part IV looks at key questions related to the design of P3s, particularly their legal and regulatory frameworks and procurement processes. The report is based on research by a working group of experts from 19 countries, chaired by Dr. Urban Karlström, Director General of the Swedish National Road and Transport Research Institute.
Recommendation of the Council on Principles for Public Governance of Public-Private Partnerships
This document sets forth the OECD Council’s principles on public-private partnerships governance. Twelve principles are described, organized under three topics:
Guidebook on Promoting Good Governance in Public-Private Partnerships
Prepared by the Public-Private Partnership (P3) Alliance of the United Nations Economic Commission for Europe (UNECE), this Guidebook promotes good governance in the use of P3s and is designed to support P3 capacity-building programs especially in the transition economies. The P3 Alliance was established in 2001 to improve the awareness, capacity and skills of the public sector in developing successful P3s in Europe. To this end, the Alliance prepares guidelines on best practices in P3s, as well as preparing other P3-related educational and training materials, and sponsoring P3 conferences and workshops. The Guidelines were reviewed at an International Conference organized by UNECE and the Government of Israel with the participation of experts from different countries to provide their experience and best practice in creating good governance conditions for P3s. A network of experts has also been established, incorporating the experts from the former Alliance group, to implement a work program on P3s.
Nations Economic and Social Commission for Asia and the Pacific
The United Nations Economic and Social Commission for Asia and the Pacific (ESCAP) is the regional development arm of the United Nations for the Asia-Pacific region. With a membership of 62 Governments, 58 of which are in the region, and a geographical scope that stretches from Turkey in the west to the Pacific island nation of Kiribati in the east, and from the Russian Federation in the north to New Zealand in the south, ESCAP is the most comprehensive of the United Nations five regional commissions. Its Transport Division works with member countries, including the public and private sector stakeholders to help them to optimize and manage the opportunities brought by the deepening of globalization. The division comprises three sections: Transport Infrastructure Section, Transport Facilitation Section, and the Transport Policy and Development Section. The Transport Policy and Development Section is, among other things, responsible for the division's work on financing infrastructure and public-private partnerships for infrastructure development.
Public-Private Partnership in the Transport Sector
This is the first volume in a series sponsored by the Diebold Institute for Public Policy Studies. The book reviews the history of transport partnerships around the world and provides detailed case studies of three recent partnership projects:
Research for the book has been assembled through interviews with financial advisers, bankers, construction companies, investors, government officials, development banks, academicians, and journalists, together with the review of primary project documents and other written materials.
Representing a case of failure, a case of success, and one whose fate has not yet been determined, the cases offer rich comparisons. They have been shaped by differing cultural expectations and economic conditions. They have also benefited from the commitment of creative supporters and been subjected to changing political winds.
This book deals with the legal issues encountered when negotiating and drafting agreements relating to project finance, and is designed for general use throughout the world rather than any particular country. The book is printed in loose-leaf form and is updated annually. It provides a chapter-by-chapter analysis and discussion of the different issues involved in project finance, together with contract forms that represent a collection of documents used around the world.
Private: The International Experience with Transport Privatization
Going Private examines the diverse privatization experiences of transportation services and facilities. Cases are drawn from the United States, Asia, Europe, and Latin America. Since almost every country has experimented to some degree with highway and bus privatization, the authors focus particularly on these services, although they also discuss urban rail transit and airports. Highways and buses, they explain, encompass all three of the most common and basic forms of privatization: The sale of an existing state-owned enterprise; use of private, rather than public, financing and management for new infrastructure development; and contracting out to private vendors public services previously provided by government employees.