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LTC, Annual Forum, For Whom the Road Should Toll: The Future of Toll Roads and Road Pricing in California, 05/02/2008, Kent Olsen
Kent Olsen of PB AMERICAS Inc. gave a presentation on public-private partnerships at a 2008 transportation forum. He discussed what PPPs are, their history of use for transportation projects in the 19th and 20th centuries, and their potential advantages and disadvantages. PPPs can provide additional funding, risk sharing, and faster project delivery through private capital investment. However, they also mean less public control and long-term commitments. To encourage more PPPs, the public sector should define projects well, streamline processes, and draw on lessons from other PPP transportation projects.
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LTC, Annual Forum, For Whom the Road Should Toll: The Future of Toll Roads and Road Pricing in California, 05/02/2008, Kent Olsen
- 1. Public–Private Partnerships New Optionsfor Project Delivery Transportation Forum Ontario, California May 2, 2008 Kent Olsen PB AMERICAS Inc. olsen@pbworld.com
- 2. Public Private Partnerships What are they? Why are they needed? What are advantages? What are disadvantages? How do we encourage more?
- 3. Public Private Partnerships What Are They?
- 4. Public Private Partnerships Fromthe National Council of Public-Private Partnerships: “a contractual agreement between a public agency (federal, state or local) and a for-profit corporation. Through this agreement the skills and assets of each sector (public and private) are shared in delivering a service or facility for the use of the general public. In addition to the sharing of resources, each party shares in the risks and rewards potential in the delivery of the service and/or facility.”
- 5. Public Private Partnerships InTransportation Design-build Innovative financing by public sector Finance, design-build Design-build, operate, maintain (public sector financing Finance, design-build, operate, maintain Franchise or concession
- 6. Public Private Partnerships ALittle History 19th Century: Turnpikes ● Dirt-filled roads financed by tolls ● Named for the gates across the road and the sharp pole or “pike” on the gate allowing it to open or close
- 7. Public Private Partnerships ALittle History 19th Century: Railroads ● 1869 – World’s first transcontinental railroad completed ● Paid for by non-equity government financing ● Pacific Railroad Bill of 1862 provided for land grants, advanced money to railroads payable upon completion of certain mileage segments
- 8. Public Private Partnerships ALittle History New York’s Transit System ● 1868 – elevated line privately financed by the New York Elevated Railroad Company ● Subway – the idea was there, but complicated legal and surety issues hindered implementation ● 1904 - first subway line opened by Interborough Rapid Transit
- 9. Public Private Partnerships ALittle History 20th Century: State Turnpikes ● 1940 - First US turnpike opened in Pennsylvania – 160-mile, 4-lane toll road Pennsylvania Turnpike circa 1940 ● Financed through $29M federal grant and a $40M purchase of turnpike bonds by the government’s Reconstruction Finance New Jersey Turnpike circa 1950 Corporation at 3.75%
- 10. Public-Private Partnerships A LittleHistory 20th Century: Mixed Record in California: ● Orange County Toll Roads ● SR 91 ● SR 125 San Diego ● Alameda Corridor ● LA to San Diego Bullet Train ● Two other AB 680 Projects
- 11. Public Private Partnerships: Options Shadow tolls FAIR lanes HOT lanes Express lanes SR 91 Tolled Express Lanes Orange County, California Truck lanes Toll roads Future HOT Lanes Houston, Texas
- 12. Public Private Partnerships Why Do We Need Them?
- 13.
- 14. Options to AddressTransportation Raise the vehicle fuel tax Increase enforcement of traffic laws Increase general taxes to fund transportation More aggressive traffic management Implement vehicle mileage fee Allow congestion to discourage users Attract private capital to fund transportation projects
- 15. Public Private Partnerships What Are the Advantages?
- 16. Public Private Partnerships: Advantages Additional project funding Potential up-front payment Increase leverage from revenue streams Requires less public resources Faster delivery of projects Shares risk
- 17. Public Private Partnerships What Are the Disadvantages?
- 18. Public Private Partnerships: Drawbacks Less public control of project Public perception of the concept Long term commitment
- 19. Public Private Partnerships How Do We Encourage More?
- 20. Encouraging Public PrivatePartnerships What Can the Public Sector Do? Start with a well-defined project Streamline the procurement process Prepare contract with fair risk allocation Fund environmental studies Procure right-of-way in urban areas Reduce government involvement in implementation Draw on lessons learned elsewhere
- 21. Encouraging Public PrivatePartnerships Optimum Project Characteristics High-priority with strong support Non-controversial Well developed project concept Does not rely on unproven technology or approach Greater than $200 million in size
- 22. Public–Private Partnerships New Optionsfor Project Delivery Transportation Forum Ontario, California May 2, 2008 Kent Olsen PB AMERICAS Inc. olsen@pbworld.com