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P3 Toolkit


Guidebook on Financing of Highway Public-Private Partnership Projects

December 2016

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This document is disseminated under the sponsorship of the U.S. Department of Transportation in the interest of information exchange. The U.S. Government assumes no liability for the use of the information contained in this document.

The U.S. Government does not endorse products or manufacturers. Trademarks or manufacturers' names appear in this report only because they are considered essential to the objective of the document.

Quality Assurance Statement

The Build America Bureau and the Federal Highway Administration (FHWA) provide high-quality information to serve Government, industry, and the public in a manner that promotes public understanding. Standards and policies are used to ensure and maximize the quality, objectivity, utility, and integrity of information. The Bureau and FHWA periodically review quality issues and adjust their programs and processes to ensure continuous quality improvement.

Technical Report Documentation Page
1. Report No.
2. Government Accession No. 3. Recipient's Catalog No.
4. Title and Subtitle
Guidebook on Financing of Highway Public-Private Partnership Projects
5. Report Date
December 2016
6. Performing Organization Code


7. Author(s)
Leslie Titus-Glover, Deepak Raghunathan, Suri Sadasivam, Rodney Walker, and Gayna Stevens-Credle (Applied Research Associates); Brien Desilets (project technical lead), Richard Wade, Cesar Queiroz, Judy Mulusa, Raymond Tillman, Lloyd Richardson, Michael Garvin, and Anthony Smith (Claret Consulting), Bob Brodesky and Christopher Grillo (IHS).
8. Performing Organization Report No.
9. Performing Organization Name And Address
Applied Research Associates
100 Trade Centre Drive, Suite 200
Champaign, IL 61820
10. Work Unit No. (TRAIS)
11. Contract or Grant No.
12. Sponsoring Agency Name and Address
Federal Highway Administration
Office of Innovative Program Delivery
1200 New Jersey Avenue, SE
Washington, DC 20590
13. Type of Report and Period Covered
14. Sponsoring Agency Code
15. Supplementary Notes
Contracting Officer's Technical Representative: Patrick DeCorla-Souza, FHWA Office of Innovative Program Delivery
16. Abstract
This Guidebook has been developed cooperatively by the U.S. Department of Transportation's Build America Bureau and the Federal Highway Administration's (FHWA) for transportation professionals who may be involved in a Public-Private Partnership (P3) project. The Guidebook is part of a P3 Toolkit consisting of tools and guidance documents to assist in educating transportation professionals as well as public sector policymakers, and legislative and executive staff. The P3 Toolkit forms the basis of a broader P3 capacity-building program that includes a curriculum of P3 courses and webinars. The P3 Toolkit addresses Federal requirements related to P3s and four key phases in P3 implementation: (1) legislation and policy, (2) planning and evaluation, (3) procurement, and (4) monitoring and oversight. This guidebook fits into the planning and evaluation phase and is concerned with the financial assessment of P3s prior to procurement and implementation.
17. Key Words
Public-private partnerships, project finance, project delivery, integrated project delivery, financial models
18. Distribution Statement
No restrictions
19. Security Classif. (of this report)
20. Security Classif. (of this page)
21. No. of Pages 22. Price
Form DOT F 1700.7 (8-72) Reproduction of completed page authorized


On July 17, 2014, the Build America Investment Initiative was implemented as a government-wide effort to increase infrastructure investment and economic growth. As part of that effort, the U.S. Department of Transportation (USDOT) established the Build America Transportation Investment Center (BATIC). The BATIC helped public and private project sponsors better understand and utilize public-private partnerships (P3s) and provided assistance to sponsors seeking to navigate the regulatory and credit processes and programs within the Department. In December 2015, the Fixing America's Surface Transportation Act (FAST Act) was enacted, which directed USDOT to establish a National Surface Transportation Infrastructure Finance Bureau, which was renamed the Build America Bureau (the Bureau).

Building upon the work of the BATIC, the Bureau was established in July 2016 as USDOT's go-to organization to help project sponsors who are seeking to use Federal financing tools to develop, finance and deliver transportation infrastructure projects. The Bureau serves as the single point of contact to help navigate the often complex process of project development, identify and secure financing, and obtain technical assistance for project sponsors, including assistance in P3s. The Bureau replaces the BATIC and is now home to DOT's credit programs, including Transportation Infrastructure Finance and Innovation Act (TIFIA), the Railroad Rehabilitation and Improvement Financing (RRIF) and Private Activity Bonds (PAB). The Bureau also houses the newly-established FASTLANE grant program and offers technical expertise in areas such as P3s, transit oriented development and environmental review and permitting. The Bureau is also tasked with streamlining the credit and grant funding processes and providing enhanced technical assistance and encouraging innovative best practices in project planning, financing, P3s, project delivery, and monitoring.

Working through the Bureau, USDOT has made significant progress in its work to assist project sponsors in evaluating the feasibility of P3s, and helping simplify their implementation. In response to requirements under the Moving Ahead for Progress in the 21st Century Act (MAP-21) and the FAST Act to develop best practices and tools for P3s, the Bureau, jointly with FHWA, is publishing this report on U.S. highway P3 concessions.

Table of Contents

Acronyms & Abbreviations

ADR Alternative Dispute Resolution
ADSCR Annual Debt Service Coverage Ratios
CADS Cash Available for Debt Service
CAPM Capital Asset Pricing Model
CBE Capital Beltway Express
CPI Consumer Price Index
DBF Design Build Finance
DBFM Design Build Finance Maintain
DBFOM Design Build Finance Operate Maintain
DBM Design Build Maintain
DBOM Design Build Operate Maintain
DS Debt Service
DSCR Debt Service Coverage Ratio
EBITDA Earnings Before Interest, Taxes, Depreciation, and Amortization
EMMA Electronic Municipal Market Access
EPC Engineering, Procurement, Construction
FHWA Federal Highway Administration
HOT High Occupancy Toll
IRR Internal Rate of Return
IRS Internal Revenue Service
LIBOR London Interbank Offered Rate
LLCR Loan Life Coverage Ratio
MAP Maximum Availability Payment
MPO Metropolitan Planning Organization
MRG Minimum Revenue Guarantee
MSRB Municipal Securities Rulemaking Board
NPV Net Present Value
O&M Operations and Maintenance
OIPD Office of Innovative Program Delivery
OS Official Statement
P3 Public-Private Partnership
PAB Private Activity Bonds
PPA Pocahontas Parkway Association
PPTA Public-Private Transportation Act
PV Present Value
QPA Quantified Probability Analysis
RFI Request for Information
RFP Request for Proposals
RFQ Request for Qualifications
SAFETEA-LU Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for Users
SB Shadow Bid
SIB State Infrastructure Bank
SPV Special Purpose Vehicles
T&R Traffic and Revenue
TIAA-CREF Teachers Insurance and Annuity Association College Retirement Equities Fund
TIFIA Transportation Infrastructure Finance and Innovation Act
TxDOT Texas Department of Transportation
VDOT Virginia Department of Transportation
WACC Weighted Average Cost of Capital


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