Evaluating the Role of Private Investment in Infrastructure Assets
University Transportation Research Center - Region 2
Cornell University, October 2015
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The major objectives of this study is to develop a comprehensive and inclusive framework and lessons/guidelines for designing socially beneficial, sustainable, and system-improving P3 projects. It seeks to close an important gap in our knowledge concerns the decision about which projects would become a suitable fit for P3 procurements. This study considers alternative P3 approaches for profit maximization and system cost minimization at full urban transportation network scales to make several policy recommendations on improving transportation system performance while maintaining profitability.
Synthesis of Public-Private Partnerships: Potential Issues and Best Practices for Program and Project Implementation and Administration
Kentucky Transportation Center, August 2015
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This report reviews the literature on P3 benefits and drawbacks and makes policy recommendations as Kentucky contemplates P3 authorization. It includes guidance and best practice that can ensure successful P3 implementation.
Feasibility Study Guideline for Public Private Partnership Projects
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This report presents a framework for PPP feasibility study at the early phase of project development. The financing analysis process model is developed and refined for the guideline. An Excel-based software package named P3FAST is developed and attached with the research report to facilitate the PPP feasibility study for transportation agencies. An example is discussed to demonstrate the analysis process and outcome. Three types of PPP models are compared and evaluated to achieve a feasible financing structure. The report includes two volumes: Volume I Research Report and Volume II Feasibility Study Guideline.
"Successful Delivery of Public-Private Partnerships
for Infrastructure Development."
Journal of Construction Engineering and Management, American
Society of Civil Engineers, ASCE, 133(12), 918-931. Abdel Aziz, A.
M (2007).
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Two common approaches have been used by governments for the implementation
of public-private partnerships (P3s): a finance-based approach that
aims to use private financing to satisfy infrastructure needs, and
a service-based approach that aims to optimize the time and cost
efficiencies in service delivery. The implementation of P3s, however,
may suffer from legal, political, and cultural impediments. In the
United States, the federal government enabled a number of acts to
ease the impediments and promote P3s for infrastructure development.
Based on a detailed analysis of P3s in the United Kingdom and British
Columbia, Canada, this paper describes principles that would characterize
the implementation of P3s at the program level (e.g., whether the
implementation is successful). The principles pertain to the: availability
of a P3 legal framework and implementation units; perception of the
private finance objectives, risk allocation consequences, and value-for-money
objectives; maintenance of P3s process transparency; standardization
of procedures; and use of performance specifications. Guidelines
for successful implementation are explained and discussed in the
context of the United States P3s experience and impediments.
"A Survey of the Payment Mechanisms for Transportation
DBFO (P3) Contracts in British Columbia"
Construction Management and Economics, 25(5), 492-543
(London, UK). Abdel Aziz, A. M (2007).
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In traditional project delivery systems, payment mechanisms provide
compensation for the work performed using construction capital payments.
In the alternative public-private partnership (P3) systems, payment
mechanisms follow the selected P3 system. For example, the build-operate-transfer
system provides compensation based on project demand using real-tolls
usage payments; the design-build-finance-operate (DBFO) system provides
shadow-tolls usage payments; and the performance-based DBFO system
provides compensation based on contractor's performance using service
availability payments. Designing the payment structure is an important
task where several factors have to be considered. This paper analyses
the implementation of payment mechanisms in a number of DBFO transportation
projects in BC, Canada, in terms of payment structure, payment types
and characteristics, determination and funding. The analysis provides
insights for the design of payment mechanisms. The analysis shows
that more payment types are being used and that the mechanisms are
designed to achieve specific government objectives. The analysis
refers to a new ‘hybrid' payment mechanism with elements derived
from the traditional and the P3 systems. The hybrid system may have
potential to minimize the overall project cost; however, agencies
have to be flexible in the delivery concepts as combinations of payments
for inputs, usage and services might have to be used.
"A Structure for Government Requirements in Public-Private
Partnerships "
Canadian Journal of Civil Engineering,
28(6), 891-909. Abdel-Aziz, A. M. and Russell, A.D. (2001).
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A spectrum of requirements for the procurement of public infrastructure
under various public-private partnership arrangements has been communicated
by governments to the private sector participants. This paper suggests
a structure for these requirements and demonstrates how they have
been realized in public-private partnership projects. Government
requirements are categorized and described under a structure of three
dimensions: rights, obligations, and liabilities. Each dimension
is further defined and explained through a number of attributes.
The structure provides insights as to the basis for the different
modes under public-private partnerships such as build-operate-transfer,
build-own-operate-transfer, and build-transfer-operate. The structure
is used to examine government requirements in a number of public-private
partnership transportation projects. The results show that, for each
dimension and its related attributes, comprehensive and clear articulation
of government requirements is generally needed. This will reduce
the amount of supplemental materials issued for the request for proposals,
help consortiums in responding with proposals that can fit the requirements
and reduce the amount of time spent in negotiations and (or) the
need for contract amendments to reflect marketplace realities missed
earlier.
"Public-Private Partnerships and the Development
of Transport Infrastructure: Trends on Both Sides of the Atlantic"
First International Conference on Funding Transportation Infrastructure. Perez, Benjamin G. (PB Consult) and James W. March (FHWA). Institute
of Public Economics at the University of Alberta. (August 2006).
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This investigation focuses on how forces - such as the will of the
government to extract resources to meet the public's needs and the
extent to which the national economy can produce them - have shaped
the use of P3s in developing transport infrastructure in Europe and
the United States. It begins by describing the different ways the
public and private sectors collaborate to develop transport infrastructure
in the United States and then compares recent experience and emerging
trends in P3 applications on both sides of the Atlantic.
