The use of Public-Private Partnerships (P3s) marks a shift away from traditional ways of procuring and financing highway projects. Under the P3 model, a private partner may participate in some combination of design, construction, financing, operations and maintenance, including collection of toll revenues.
The Federal Highway Administration's (FHWA) Center for Innovative Finance Support (formerly Innovative Program Delivery) has produced a P3 Toolkit comprising tools and guidance documents to assist in educating public sector policy-makers, legislative and executive staff, and transportation professionals. The P3 Toolkit forms the base of a broader P3 capacity-building program which includes a curriculum of P3 courses and webinars. The P3 Toolkit addresses Federal requirements related to P3s and four key phases in P3 implementation:
- Legislation and Policy;
- Planning and Evaluation;
- Procurement; and
- Monitoring and Oversight.
P3 Evaluation Tools
The P3 Evaluation Tools are a key component of the P3 Toolkit. They serve as a reference for decision-makers and practitioners seeking to understand P3s as a financing alternative for major capital projects. The P3 Evaluation Tools include:
- Fact Sheets on FHWA's Public-Private Partnership (P3) Toolkit, Risk Valuation and Allocation, Value for Money Analysis, Benefit-Cost Analysis, Financial Structuring, Analytic Studies, Conducting Procurement, and Monitoring and Oversight
- Four Primers, one each on Risk Assessment, Value for Money Analysis, Financial Structuring and Assessment, and Establishing a Public-Private Partnership Program;
- An analytical tool called P3-VALUE 2.0 to help practitioners understand the process for evaluation of P3 approaches and educate the user on methods used to assess the viability of a P3 approach to infrastructure delivery along with a User Guide and a Quick Start Guide;
- Four Guidebooks, including guides on Risk Assessment, Value for Money Analysis, Project Delivery Benefit-Cost Analysis and P3 Project Financing (coming soon) for practitioners seeking a deeper understanding of the concepts, assumptions, inputs and outputs involved in the above analyses; and
- A P3-SCREEN Tool along with a supporting guide to assist practitioners seeking to perform a preliminary screening evaluation of the suitability of a major highway project (costing $100 million or more).
THE P3-VALUE 2.0 ANALYTICAL TOOL
Practitioners can use P3-VALUE 2.0 to better understand the concepts, inputs, key assumptions and outputs from evaluations of risk, financial feasibility, "value for money" and project delivery benefit-cost analyses. P3-VALUE 2.0 includes a Training Module designed to educate the user, as well as a Module that may be used by practitioners for high-level screening evaluation of actual projects. The complexity of the detailed-level analyses required for later stages of project development for specific projects requires that the analyses be done by experts using more detailed modeling. The four components of the Training Module are outlined below.
- Risk Assessment (RA): This component assists the user in understanding the process used in identifying, defining, valuing, and allocating risks. Aggregate risk values output from this component are used as inputs into the Value for Money (VfM) analysis described below.
- Value for Money (VfM): This component assists the user in understanding the process used in undertaking a value for money analysis.
- Project Delivery Benefit-Cost Analysis (PDBCA): This component assists the user in understanding the process used in estimating the societal net benefits that may be achieved by delivering a project as a P3, including the benefits from accelerating the project.
- Financial Analysis (FA): This component assists the user in understanding the process used to evaluate financial viability, including identification of required financial subsidies, under both conventional and P3 procurement.
P3 TOOLKIT QUICK FACTS
- The P3 Toolkit comprises tools and guidance documents to assist in educating public sector policy-makers, legislative and executive staff, and transportation professionals.
- P3 Evaluation Tools serve as a reference for decision-makers and practitioners seeking to understand P3s as a financing and delivery alternative for major capital projects.
- Practitioners can use P3-VALUE to better understand the concepts, inputs, key assumptions and outputs from evaluations of risk, financial feasibility and "value for money" analyses.
FOR FURTHER INFORMATION:
See FHWA's P3 Toolkit.