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VIII:Glossary of Terms

2004 Report – The U.S. Department of Transportation Report to Congress on Public-Private Partnerships, 2004.

Australia PPP ReportPerformance of PPPs and Traditional Procurement in Australia : Final Report, The Allen Consulting Group, November 30, 2007.

BRT or Bus Rapid Transit – BRT generally refers to public transit systems in which buses have access to managed lanes or dedicated routes to provide greater travel time predictability to bus passengers.

Availability Payment – An availability payment is a periodic payment made to a concessionaire by a public authority for providing an available facility. Payments are reduced if the facility is not available for a period of time, or not being maintained in satisfactory condition. Using an availability payment structure eliminates the need for the concessionaire to assume any traffic risk and protects the interests of the public by giving the concessionaire a financial incentive to maintain the facility in satisfactory condition and operating at a specified level of performance.

DBB or Design-Bid-Build – DBB has been the dominant form of procurement in the U.S. since the creation of the modern transportation system. Under the DBB approach, the design and construction of a facility are procured separately. The public agency either performs, or contracts with an engineering firm to perform, the design work, and then separately contracts with a private construction firm through a competitive, low bid process to perform the construction work. In a DBB procurement, the public agency assumes the risk that the design work is accurate and complete. Typically, the public agency sponsor also assumes the risk and responsibility for the operation and maintenance of the facility. Under the DBB approach, the public sector is responsible for funding the project.

DB or Design-Build – Contractual arrangements pursuant to which the private sector is responsible for designing and constructing a facility for a fixed price and by a date certain. This arrangement allows for greater private sector involvement in the design and construction of new capacity than has traditionally been permitted, but does not transfer any of the risks of financing, operating and/or maintaining a facility to the private sector.

GAO – The U.S. Government Accountability Office.

HOT Lanes or High-Occupancy Toll Lanes – HOT lanes are lanes that are open to buses and high-occupancy vehicles, just like traditional high-occupancy vehicle and carpool lanes, or "HOV lanes", but which are also available to single-occupant vehicles that pay a toll. Tolls charged in HOT lanes can be variable, meaning they are reduced when there is little or no traffic and they are increased when there is more traffic. Variable tolls encourage people to travel when there is less traffic and ensure that a reliable travel time is always available for drivers willing to pay a toll. HOT lanes implemented in the U.S. include the 91 Express Lanes in Orange County, California, the I-15 HOT Lanes in San Diego, California, the I-394 HOT Lanes in Minneapolis, Minnesota, and the I-25 HOV/Express Toll Lanes in Denver, Colorado.

Long-Term, Concession-Based PPPs – In long-term, concession-based PPPs, the private sector generally assumes a significant portion of the financial risk of the project, risks associated with the operation and maintenance of the project, and, in the case of new capacity and capital improvements, risks associated with the project's design and construction. Whether the private sector assumes a significant portion of the risk that the project will not generate enough traffic and revenue to pay for the project's costs is an important component of the structure of a long-term, concession-based PPP.

Maryland ReportCurrent Practices for Public-Private Partnerships for Highways, Draft Report, submitted by KCI Technologies, Inc., in cooperation with the Maryland Transportation Authority, the Maryland Department of Transportation, and the Maryland State Highway Administration, June 22, 2005.

Managed Lanes – Generally, managed lanes use pricing or eligibility requirements to manage demand and increase freeway efficiency. Managed lanes can include HOV lanes, HOT lanes, express toll lanes, bus rapid transit lanes, or TOT lanes.

NCSL ReportSurface Transportation Funding Options for States, National Conference of State Legislatures, May 2006.

PABs or Private Activity Bonds – Tax-exempt bonds authorized to finance privately developed and operated highway and freight transfer facilities. PABs allow highway and freight transfer facilities to be developed, designed, financed, constructed, operated and maintained by the private sector as PPPs, while maintaining the tax-exempt status of the bonds. PABs are issued by a public, conduit issuer on behalf of a private entity. The private entity is the obligor on the PABs.

Penta-P – The Public-Private Partnership Pilot Program authorized by SAFETEA-LU to demonstrate the advantages of PPPs for certain new fixed guideway capital projects funded by the Federal Transit Administration.

PPPs – PPPs are essentially contractual arrangements between the public and private sectors that allow a single private entity to assume significant control of, and risk for, multiple elements of a project, including design, construction, financing, operation and maintenance. A detailed definition is provided in Section III of this report.

Private Partner or Concessionaire – In a PPP, the single private entity responsible and financially liable for performing all or a significant number of functions in connection with a project is called the private partner or concessionaire. The private partner is typically a consortium of private companies with expertise in the different functions to be performed (design, construction, financing, operation and/or maintenance).

RFP or Request for Proposals – An RFP is an invitation from a procuring agency for private companies to submit detailed proposals on a particular PPP project. In a PPP, the RFP is often part of a two step procurement process and is only issued by a procuring agency to private companies that have been shortlisted in a preliminary qualifications process.

RFQ or Request for Qualifications – An RFQ is an invitation from a procuring agency for private companies to submit their qualifications to carry out a particular PPP project. In a PPP, the RFQ is often the first part of a two step procurement process and helps the procuring agency shortlist qualified companies to submit detailed proposals in response to a subsequent RFP.

SAFETEA-LU – The Safe, Accountable, Flexible, Efficient, Transportation Equity Act: A Legacy for Users ("SAFETEA-LU").

Shadow Tolls – Shadow tolls are per vehicle amounts paid to a private toll road operator by the procuring agency or another public entity in lieu of collecting tolls directly from the users of the facility. The users of the facility do not pay tolls. Shadow tolls may be based on types of vehicles and distances traveled on the facility.

TIFIA – The Transportation Infrastructure Finance and Innovation Act of 1998 (TIFIA) established a Federal credit program for eligible transportation projects authorizing USDOT to provide three forms of credit assistance – secured (direct) loans, loan guarantees, and standby lines of credit. TIFIA's fundamental goal is to leverage Federal funds by attracting substantial private and other non-Federal co-investment.

TOT Lanes or Truck Only Toll Lanes – TOT lanes are lanes that are open exclusively to heavy or commercial trucks that pay a toll and not to any other type of vehicle. TOT lanes separate truck traffic from passenger car lanes and are considered to enhance safety and efficiency for both trucks and passenger cars and to generate revenue.

USDOT – United States Department of Transportation.

USDOT Transit PPP ReportReport to Congress on the Costs, Benefits, and Efficiencies of Public-Private Partnerships for Fixed Guideway Capital Projects, USDOT, November 2007.

UK NAO ReportPFI: Construction Performance, UK National Audit Office, Report by the Comptroller and Auditor General, HC 371 Session 2002-2003, February 5, 2003.

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