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Executive Summary

Comprehensive highway public-private partnership (PPP) programs are relatively new to the United States and not widely used. Limited highway funds, unmet needs for new highway capacity, interest from private investors, and other factors have led to substantial discussion of PPP projects and programs at the State and Federal levels and implementation of projects in a few leading States. In contrast, some countries have extensive and, in some cases, long-term experience with infrastructure PPPs, particularly highways. This presents a unique opportunity to capitalize on the knowledge and experience gained in the international community, where tested policies and practices are in place.

A desk study was completed to identify the countries with the most potential to provide relevant and current information on PPPs. Subsequently, a team of nine professionals representing government, private industry, and academe visited Australia, Portugal, Spain, and the United Kingdom in June 2008 to collect and evaluate information about PPP programs and projects for highway infrastructure. The team met with representatives of the public and private sectors involved in PPP arrangements. The Federal Highway Administration (FHWA) and the American Association of State Highway and Transportation Officials (AASHTO) jointly sponsored this scan through the National Cooperative Highway Research Program (NCHRP).

The purpose of this scan was to (1) examine programs, policies, and practices used by other countries that actively solicit and involve the private sector in the delivery of highway infrastructure; (2) document lessons learned; and (3) make implementation recommendations that will improve U.S. policy and practice.

For the purposes of this report, a public-private partnership is defined as a contract between the public and private sectors for the delivery of a project or service in which the private partner has responsibility for acquiring the majority of the necessary financing.

Key Learning Points of the Scan

The scan team learned a significant amount about established PPP programs during its visits with the host countries. The team identified several critical points that it consistently observed across the nations. These points are the salient messages from the scan:

Principal Findings

The team gained valuable insights about established PPP programs during its visits with the host countries. Foremost, the relative maturity of the host nation PPP programs offered a rich environment for the collection of useful and tested information on PPP policies and practices. In many cases, the team received details on secondand even third-generation PPPs. Hence, the degree of institutional learning that had occurred was clear. Further, the diversity among policies and practices observed also provided alternative perspectives of various issues.

This experience base provided the team with numerous findings. The most significant ones are highlighted below in two categories: general and project life cycle findings.

General Findings
Project Life Cycle Findings

Additional Findings

Beyond the principal findings, the team made other important observations:

Implementation Strategies

After some discussion, the team agreed that this scanning study and its implementation strategies should facilitate the pervasive use of a project development process by State and local highway agencies that selects an effective project delivery system from a range of options that includes PPPs. An effective project delivery system is defined as one that provides the greatest benefits to society and meets government objectives.

The recommendations and implementation actions that follow are geared toward this end.

Short-Term Actions
  1. Convene executive workshops at which representatives from countries visited or elsewhere speak directly to public and private sector decisionmakers. Providing information to both decisionmakers (executives) and those implementing the programs (directors or staff members) will benefit State departments of transportation (DOTs).
  2. Develop training guidelines for PPP program managers, procurement officers, contract managers, and financial and legal specialists that State DOTs can use to tailor development and training programs to their specific needs.
  3. Encourage FHWA to convert the scan team into an expert task group to implement scan findings.
  4. Encourage AASHTO to establish a group focused on PPPs, perhaps as a section of one of its subcommittees. Implementation of this recommendation will allow the discussion on the development of PPPs to stay active and involve stakeholders at all levels of AASHTO, State DOTs, and FHWA.
  5. Create a set of state-of-the-practice publications that further highlight the lessons learned from the scanning study and possibly expand the scope of inquiry to include other nations not studied. Issues such as business case development and analysis, value-formoney and risk analysis, procurement processes, contract provisions, and change management are all important topics for these publications to address.
  6. Develop comparative case studies of representative projects, past and current, that highlight maturing and evolving policies and practices. For instance, the Victoria government has developed two projects, CityLink and EastLink. An indepth review of the project specifics, lessons learned, procurement changes, and program evolution would meet one of the principal objectives of the scanning study.
Midterm Actions
  1. Develop a strategy to facilitate research in the following areas:
    1. Investigate advantages and disadvantages of alternative organizational forms for PPP divisions.
    2. Examine methods for identifying and analyzing candidate PPP projects.
    3. Investigate the evolution and effectiveness of KPIs.
    4. Investigate the risk mitigation practices of the private sector in PPP arrangements to determine if private participants assume real levels of risk.
    5. Investigate the determinants of concession length, both domestically and abroad.
    6. Evaluate methodologies for establishing and managing toll structures.
    7. Investigate and identify appropriate metrics for assessing benefits and costs of PPP programs and projects and overall PPP program and project performance.
Long-Term Actions
  1. Develop and publish principles and guideline documents that update or complement existing documents that are similar in nature, such as the following:
    1. Establishing a PPP program
    2. Identifying and evaluating candidate PPP projects
    3. Procuring PPP projects
    4. Creating PPP contracts
    5. Managing PPP contracts
    6. Measuring PPP program and project performance
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Page last modified on November 7, 2014
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