FHWA - Center for Innovative Finance Support - P3 Toolkit: Analytical Tools

P3-VALUE 2.2 User Guide and Concept Guide

January 2019

Tables

Figures

AP	Availability Payment
BCA	Benefit Cost Analysis
BS	Balance Sheet
CF	Cash Flow
CFADS	Cash Flows Available to Debt Service
DSCR	Debt Service Coverage Ratio
DSRA	Debt Service Reserve Account
GPL	General Purpose Lanes
IRI	International Roughness Index
IRR	Internal Rate of Return
ML/TL	Managed Lanes or Tolled Lanes
MMRA	Major Maintenance Reserve Account
O&M	Operations and Maintenance
PDBCA	Project Delivery Benefit-Cost Analysis
P&L	Profit & Loss
PSC	Public Sector Comparator or Conventional Delivery
P3	Public-Private Partnership
V/C	Volume/Capacity Ratio
VDF	Volume Delay Function
WACC	Weighted Average Cost of Capital

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Part I: User Guide

1 Structure of P3-VALUE 2.2 Tool

This chapter discusses the modeling approach followed to develop P3-VALUE 2.2 as well as the tool's structure. Furthermore, it presents the different worksheets in the tool.

1.1 Modeling Standards

The P3-VALUE 2.2 tool follows international best modeling practices, ensuring transparency and a logical model flow from inputs through calculations to outputs. More specifically, the P3-VALUE 2.2 tool uses the FAST modeling standard (for more details, see: https://www.fast-standard.org). FAST models break down complex modeling problems into simple and easy-to-understand components. FAST stands for:

Flexible: Easy to change, which is particularly important if FHWA were to require different functionalities in the future.
Appropriate: Reflects key economic and financial drivers without being cluttered with unnecessary detail.
Structured: Rigorously applies consistent design rules.
Transparent: Builds models that other people can read and understand.

Some distinguishing features of FAST include:

Calculation blocks for easy referencing to inputs.
Flags to break up and simplify calculations.
Automatic track changes in inputs or calculations during the modeling process.
Checks to verify model integrity.

The FAST modeling standard minimizes the risk of errors and omissions and facilitates quality control and auditing. Furthermore, the FAST modeling standards help create a user-friendly and logical model structure, enabling the user to "read" the model and understand the full analysis, without necessarily having to understand all individual calculations. By adhering to the FAST modeling standards, the P3-VALUE 2.2 tool's calculations are transparent, thereby reducing the risk that users perceive the tool as a "black box". Furthermore, by adhering to FAST modeling standards, the P3-VALUE 2.2 tool can easily accommodate future adjustment or additions if required. Figure 2 shows how a model based on FAST standards maintains a strict separation of inputs, calculations, and outputs.

Figure 2: FAST Modeling Approach to User Interface Separation

Text description of Figure 2.

P3-Value detailed model structure

This figure is a detailed model structure for the P3-Value tool. It begins with Inputs, including Simplified Inputs, Input timing & cost, Input Traffic & Toll, Input Finance, Input Risk and Input BCA.

There are arrows from the inputs box to other boxes, including Value-for-Money Analysis, Revenues Calculations, Core Calculations, Risk Calculations, Travel Cost Calculations and Project Delivery Benefit-Cost Analysis.

Within the Revenues Calculations box there is only Revenues listed.

Within the Core Calculations box there are four listed sheets, including: Time&Esc, Traffic, Construction, and O&M.

Within the Risk Calculations box, five sheets are listed, including: Pure risks, base variability, lifecycle performance risk, risk output for VfM, and risk output for PDBCA.

Within the Travel Cost Calculations box there are eleven sheets listed, including: speed, non-fuel cost, travel time cost, fuel cost, construction delays, accidents, O&M delays, emissions, incident delays, transit and carpooling.

All previously listed boxes lead through arrows to the final two boxes: Value-for-Money Analysis and Project Delivery Benefit-Cost Analysis.

The Value-for-Money Analysis box contains three sub-boxes, including: PSC VfM Calculations, P3 VfM Calculations, and finally the VfM Outputs (which are derived from the previous two sub-boxes).

The PSC VfM Calculations sub-box contains three sheets, including: PSC financing, PSC reserves, and PSC CWF. The P3 VfM Calculations Sub-box contains six sheets, including: P3 financing, P3 reserves, P3 depreciation, P3 FinStat, P3 (Pub) CWF, and P3 CWF.

The final sub-box, VfM Outputs, contains nine sheets, including: Subsidy and bid, VfM graph data, VM simplified output, VfM output summary, VfM comparison graph, VfM PSC graph, VfM P3 (public) graph, VfM P3 (Private) graph, and financing outputs.

The last box is Project Delivery Benefit-Cost analysis. This includes two sub-boxes: Benefits Calculations and PDBCA Outputs. Benefits Calculations includes six sheets: Benefits per vehicle, benefits existing traffic, benefits induced traffic, net benefits, transit benefits, and carpooling benefits. These sheets are used to calculate the PDBCA outputs, which include: PDBCA Graph data, pdbca output summary, PDBCA incremental Comparison, PDBCA Delayed PSC Graph, PDBCA PSC graph, and finally PDBCA P3 graph.

1.2 Model Structure

The P3-VALUE 2.2 tool is organized into a number of modules. Each module has a specific objective. This modular approach enables users to "zoom" in on a specific issue without having to consult all other calculations and modules. The P3-VALUE 2.2 tool contains the following modules:

Inputs (costs, timing, traffic, tolling, finance, risk, etc.)
Core calculations (traffic, construction, O&M, escalations)
Revenues
Travel cost calculations
Risk Assessment
Value-for-Money Analysis
Project Delivery Benefit-Cost Analysis

Each module has its own landing sheet, which visually presents how this module is connected to other modules. More specifically, the landing sheets show the following items:

Elements used in the module (either inputs or elements calculated in other modules)
Calculations in this module
Impacted modules & outputs

Figure 3 presents the overall structure of the P3-VALUE 2.2 tool and the interactions between the different modules. For example, as can be seen by the arrows in the figure, the Value-for-Money Analysis module uses revenues, core calculations, and risks to calculate the VfM outputs. This structure is also presented on the home sheet of the P3-VALUE 2.2 tool. From the home sheet, users can access the various modules and sheets by double-clicking on the blue links.

Figure 3: P3-VALUE Detailed Model Structure

Text description of Figure 3.