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November/December 2005
Guest Editorial
Public-Private Partnerships
Transportation is an industry in transition, moving away from a government-only endeavor to a partnership between government and the private sector. Federal, State, and local governments have been exploring public-private partnership (PPP) initiatives and already have embarked on a number of projects that involve variations on the concept.
The growing level of interest in this concept became clear at the 17th annual conference on PPPs hosted by the American Road & Transportation Builders Association. The conference drew three times the number of attendees than it did 5 years ago, with participants representing a number of disciplines in the transportation industry, including planners, designers, builders, system operators, and financiers.
For the transportation community, PPPs promise the possibility of greater innovation and efficiency in the delivery of highway projects and additional revenue streams to fund needed transportation improvements. For taxpayers and motorists, PPPs mean that projects often are completed more quickly, at lower cost, and with more and better travel choices. These partnerships can maximize the resources, efficiencies, and expertise of the free market system, bringing these advantages to surface transportation projects. However, implementing PPPs will require educating the public and managing its expectations for those benefits to be fully realized.
Currently, 19 States and territories have passed legislation that enables them to make use of PPPs: Alabama, Arizona, California, Colorado, Delaware, Florida, Georgia, Louisiana, Maryland, Minnesota, Missouri, Nevada, North Carolina, Oregon, Puerto Rico, South Carolina, Texas, Virginia, and Washington.
In addition, some of these States have active PPPs underway. The Trans-Texas Corridor (TTC), for example, originally was approved in February 2004 to proceed under Special Experimental Project No. 14 (SEP-14), a construction program focused on evaluating innovative contracting methods. Later, the Federal Highway Administration (FHWA) upgraded the TTC to SEP-15 status, which focuses on PPP approaches to project delivery, giving Texas greater flexibility to employ innovation and PPPs as the project progresses.
Through a partnership with a consortium of engineering, construction, and financial firms, the Texas Department of Transportation will develop a transportation corridor that roughly parallels Interstate 35, running north-south from Oklahoma to Mexico. The multiuse corridor could include lanes for passenger vehicles, trucks, and rail, as well as dedicated zones for water, electric, telecommunications, and other utility lines.
A recent initiative in Oregon, the Oregon Innovative Partnerships Program (OIPP), is designed to develop an expedited project delivery process, maximize innovation, and develop partnerships with private entities and various units of government. The OIPP will be used on three projects.
This issue of PUBLIC ROADS explores a number of facets of PPPs. One article, "Working With the Private Sector to Meet Transportation Goals," features excerpts from a panel discussion hosted by the Transportation Research Board in January 2005, during which former Federal Highway Administrator Mary E. Peters and private-sector representatives explored how PPPs could help advance critical transportation projects. Another article, "The Future of Highway Financing," shares highlights from a roundtable discussion involving finance and policy experts looking at ways to fund tomorrow's surface transportation projects.
On a practical level, many States are viewing roads and bridges as assets instead of liabilities. Leasing these assets, for the long term, means States may have additional financial resources for transportation improvements.
J. Richard Capka
Acting Administrator
Federal Highway Administration
Other Articles in this issue:
On the Road to Environmental Excellence
The Future of Highway Financing
Working With the Private Sector to Meet Transportation Goals
November/December 2005 · Vol. 69 · No. 3
