Design Build Finance Operate Maintain (DBFOM) Toll Concessions

Tolls paid by project users often comprise the primary revenue source for a P3 transaction. In return for the right to collect tolls during the concession period, the P3 developer bears the risk that the revenues may be inadequate to repay the underlying project loans and equity investments. In the event of greater-than-expected revenues, some concession agreements include a revenue-sharing provision between the private partner and public owner.

TOLLING TO MANAGE TRAFFIC FLOW

From the financing perspective, the purpose of a toll is to repay the debt raised to build and operate the toll facility. From a transportation perspective, tolls can also provide a tool for managing traffic flow. Known as "congestion pricing," these toll rates may vary per time of day or in real time based on actual traffic conditions. Much like carpool lanes, "priced managed lanes" operate in parallel to toll-free lanes, typically in established highway corridors with heavy traffic volumes. The fluctuating toll rate assures the managed lane user of a predictable travel time. Many DBFOM concessions use congestion pricing principles to establish their toll rates.

Projects

Design Build Finance Operate Maintain (DBFOM) Toll Concessions:

* Facility now under public management and operation