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APPENDIX D
Other Individuals/Interest Groups Survey Summaries
List of Respondents*
Name Organization
Anonymous Legislature
Achterman, Gail Oregon Transportation Commission
Baxandall, Phineas U.S. Public Interest Research Group
Clary, Lowell Lowell Consulting, LLC
DiPietro, Susanne Citizen
Diedrich, Roger Sierra Club, Virginia Chapter
Enright, Dennis NW Financial Group
Epstein, Lois Alaska Transportation Priorities Project
Ford, Richard Washington Transportation Commission
Holman, Bill Nicholas Institute, Duke University
Jacobs, Carl Aeia NB #20
Levenson, Dana RBS Greenwich Securities
Mandel, Nick New Mexico Department of Transportation
Muchnick, Allen Arlington Coalition for Sensible Transportation
Neumann, Dennis BNY Capital Funding
Pagano, Anthony University of Illinois at Chicago
Parker, Jeffrey Jeffrey A. Parker and Associates
Pollard, Trip Southern Environmental Law Center
Poole, Robert Reason Foundation
Redfield, Beth Office of Program Research, Washington State
Legislature
Richards, Mary Massachusetts Organization of State Engineers and
Scientists
Staley, Samuel Reason Foundation
Toppin, Ted Professional Engineers in California Government
Woodland, John New Mexico Department of Transportation
*Note: The list of respondents is organized by alphabetical order, and in no way does it reflect the order of responses
provided in the following pages.
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Respondent #1
Type of Organization c. Legislature
Top benefits of PPP 1. Rapid construction
2. Less costly
PPP Concern 1 Another alternative
PPP Concern Mitigation 1 [State] passed an Act that made it possible to have a regional
highway provider
PPP Concern 2
PPP Concern Mitigation 2
PPP Concern 3
PPP Concern Mitigation 3
PPP Concern 4
PPP Concern Mitigation 4
PPP Concern 5
PPP Concern Mitigation 5
Factors to consider by decision- State loses control
makers
Contract structures/techniques
to protect public interests
Other perspectives
Respondent #2
Type of Organization c. Legislature
Top benefits of PPP 1. Cash flow
2. More flexibility in use of resources
PPP Concern 1 Less control over toll rates
PPP Concern Mitigation 1 Law and contract terms to include public role in setting toll rates.
PPP Concern 2 Contractual provisions that tie the hands of public entities
PPP Concern Mitigation 2 More knowledgeable public contract negotiators
PPP Concern 3 More expensive toll rates for longer periods of time with less public
benefit
PPP Concern Mitigation 3 Public financing
PPP Concern 4 Not clear whether the private lessor will exercise good stewardship
for the facility. When the lease is up, in what condition will the
facility be returned to the public?
PPP Concern Mitigation 4 Performance measures
PPP Concern 5
PPP Concern Mitigation 5
Factors to consider by decision- Is it really cheaper? Are the benefits from using a PPP worth any
makers additional costs borne by the public? Are the benefits worth loss of
control of the facility?
Contract structures/techniques
to protect public interests
Other perspectives
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Respondent #3
Type of Organization l. Transportation Consulting
Top benefits of PPP 1. Private Sector Expertise
2. Use Others Money
3. Promote Innovation in Project Development and Delivery/Profit
Motive
4. Accelerate High Profile Projects
PPP Concern 1 Lack of understanding and clear communication on what a PPP is
and is not such as PPPs do not solve funding shortfalls and are a
delivery tool. A funding option, such as tolls, is needed for a PPP to
be successful.
PPP Concern Mitigation 1 Education of key policy makers at a high level of PPPs and also
training programs for key staff such as CFOs, chief engineers, etc.
PPP Concern 2 A few "risky-on the edge" PPP deals cause concerns among the key
policy makers and a good delivery tool is thrown out. For example,
some risky toll roads built by public entities have struggled, yet toll
roads continue to get promoted. It should be the same with PPPs.
PPP Concern Mitigation 2 Put in place solid PPP processes that help promote the best projects
and finance plans moving forward and limit the highly risky
projects/schemes from moving forward.
PPP Concern 3 Brownfield toll roads being leased over long period without the
public owner sharing in the upside of the revenue stream.
PPP Concern Mitigation 3 There should be strong consideration for policy provisions that
require the governmental entity to share in the upside revenue on the
lease of toll roads. This should not be overly prescriptive, but give the
flexibility needed for each state to work within an overall policy and
then apply this based on the specific situation.
PPP Concern 4 Some PPP projects seem to be starting way too early in the project
development process. This may lead to "negotiated" deals that might
or might not generate the best bang for the public owner.
PPP Concern Mitigation 4 This is a tough one. How do you prescribe a one size fits all policy
without killing innovation? Possibly requiring a solid Value for
Money analysis at a minimum before moving forward and then
based on the final proposal would help ensure a good analysis is
provided before signing the deal.
PPP Concern 5 Congress might become overly prescriptive on the PPP process and
toll roads.
PPP Concern Mitigation 5 States must educate their Congressional members that all tools must
be provided in today's environment to provide states the flexibility
needed to deliver timely transportation improvements.
Factors to consider by decision- 1. Pick the right projects that fit the PPP profile
makers 2. Be patient and start at the right time in the project development
process (generally with environmental clear or almost clear)
3. Hire good PPP advisors (legal and financial are most important)
4. Develop a clear and consistent PPP process
5. Be patient and persistent--large PPPs are not for the faint of heart!
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Contract structures/techniques This depends on the goals to be accomplished. The best answer is to
to protect public interests build a solid transparent PPP process that is competitive and the
results will speak for themselves.
Other perspectives It seems the survey focuses mostly on the "needs improvement" side
of the PPP discussion. This may tend to convey there are "problems"
when the facts are showing the states that have been working with
PPPs for several years have good solid PPP processes. The key seems
to be to find a way to shorten the learning curve for those new to
PPPs.
Respondent #4
Type of Organization Other; Public Policy Think Tank
Top benefits of PPP 1. new capital brought into infrastructure,
2. economic life-cycle management,
3. customer driven focus,
4. access to private equity markets, and
5. long-term incentives to maintain facilities
PPP Concern 1 Consistent, sustained investment in facilities
PPP Concern Mitigation 1 Solved by including performance outcomes in contracts, including
pavement standards, LOS goals/targets
PPP Concern 2 Financial viability of projects as stand alone facilities
PPP Concern Mitigation 2 Solved by supplementing user fees (e.g., tolls) with public funds,
altering the length of the lease agreement, or allowing alternative
revenues to be raised by private company to supplement user fees
PPP Concern 3 Interoperability of technology among facilities
PPP Concern Mitigation 3 Solved by ensuring technology is open-ended and RFP specifies the
ability to operate with competing technologies
PPP Concern 4
PPP Concern Mitigation 4
PPP Concern 5
PPP Concern Mitigation 5
Factors to consider by decision- 1. Ability to improve facility or service performance;
makers 2. Performance measures are included in the PPP agreement,
allowing either party to "walk away" of one does not fulfill its
part of the contract;
3. Ensure the length of the PPP agreement is appropriate for the
service or facility;
4. Ensure the private entity shoulders most of the risk for failure to
perform
Contract structures/techniques
to protect public interests
Other perspectives
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Respondent #5
Type of Organization n. Investment Bank
Top benefits of PPP 1. Transfer of financial and operating risk from a public to a private
entity;
2. Up-front benefit paid to leaser;
3. Deployment of up-front benefit to other capital projects
PPP Concern 1 1. Misuse of up-front benefit;
2. Hijacking of up-front benefit by subsequent political regimes
PPP Concern Mitigation 1 Public statements and commitments to authorizing bodies about the
intended use of the up-front proceeds.
PPP Concern 2 Placing the up-front proceeds in an irrevocable trust, to be governed
in accordance with the trust agreement for the purposes enumerated
by the trust.
PPP Concern Mitigation 2
PPP Concern 3
PPP Concern Mitigation 3
PPP Concern 4
PPP Concern Mitigation 4
PPP Concern 5
PPP Concern Mitigation 5
Factors to consider by decision- 1. That the user of the facility receives the same if not better service
makers from the facility being leased or sold;
2. That the new operator is capable from both a financial and
operating standpoint to provide the service to the user;
3. That the leaser or seller uses the proceeds in an appropriate
Manner; i.e., a capital-for-capital exchange.
Contract structures/techniques Duplicating the concession agreements from the [project] and
to protect public interests [project] deals.
Other perspectives
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Respondent #6
Type of Organization m. Financial Advisor
Top benefits of PPP - More favorable risk allocation;
- New business model for infrastructure development;
- New entrants to the marketplace increasing competition;
- New technologies and improved attention to life cycle cost
PPP Concern 1 Excessive focus on revenue maximization
PPP Concern Mitigation 1 Greater public policy focus on underlying goals for each P3 project
PPP Concern 2 Deal terms that are perceived to be contrary to the public interest
PPP Concern Mitigation 2 Provide meaningful caps on toll rate escalation, limit concession
tenors, focus competition on lowest toll rates, etc.
PPP Concern 3 Inadequate criteria for selecting candidate projects for P3
implementation
PPP Concern Mitigation 3 Better public sector understanding of the trade-offs inherent in P3--
private sector money is not "free" and P3 is not necessarily the
answer when everything else has failed
PPP Concern 4 Attempting to apply existing finance, contracting and O&M tools to
P3
PPP Concern Mitigation 4 Study commercially-acceptable practice so that the public owner
understands the P3 framework and doesn't either give away the store
or offer a deal that can't be financed. Seek industry input on project
concepts.
PPP Concern 5 Separate P3 activity from the agency's core production and
contracting functions
PPP Concern Mitigation 5 Make the investment in time and energy to involve District-level staff
in the procurement process. They know the project best and will
maintain a balance between technical and financial considerations.
Lessons learned will migrate to the overall work program,
magnifying benefits from new approaches to risk allocation.
Factors to consider by decision- - Project readiness--don't put projects out for tender before they are
makers ready;
- Clear goals--risk transfer and revenue risk;
- Use a competitive process--avoid losing control through unsolicited
proposals;
- There is no free lunch--private equity
Contract structures/techniques Our experience with availability payments has been extremely
to protect public interests positive in [project] and [project] in [state]. Emphasis must be given
to institutionalizing the P3 process and providing the necessary
training to make P3 part of the everyday toolkit for project
implementation.
Other perspectives
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Respondent #7
Type of Organization Other; commercial bank
Top benefits of PPP The key feature is bringing private money to Infrastructure that
governments at all levels from Federal down to local do not have the
money to improve, let alone provide for growth.
PPP Concern 1 Documents in the P3 arena are very specific about the service level
the private firm will provide. The concern is how high and how fast
tolls will rise. Clearly if raising tolls were politically expedient we
would not need a P3. To much concern about congestion pricing and
simply increasing tolls to the point where governmental bodies can
provide for repair and growth.
PPP Concern Mitigation 1 Raise the tolls
PPP Concern 2
PPP Concern Mitigation 2
PPP Concern 3
PPP Concern Mitigation 3
PPP Concern 4
PPP Concern Mitigation 4
PPP Concern 5
PPP Concern Mitigation 5
Factors to consider by decision- Long-term costs;
makers Control of the asset;
Clearly spelled out documents;
Ability to reclaim the asset if there is a failure.
Contract structures/techniques
to protect public interests
Other perspectives In light of the fact that we can't just raise tolls the P3 is the next best
answer. Over time these deals will be negotiated in a better fashion
than the [state] Toll Road.
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Respondent #8
Type of Organization i. Interest Groups (Please specify in question 3a)
Non-partisan, non-profit membership group that takes no money from
corporations or unions. Our mission is to take on powerful special
interests to protect the public.
Top benefits of PPP 1. Can leverage technological know-how not currently in the public
sector.
PPP Concern 1 1. Allows public officials to avoid responsibility for increasing taxes or
otherwise raising revenue for public purposes.
PPP Concern Mitigation 1 No deals over thirty years; greater transparency.
PPP Concern 2 2. Relinquishes public control over management and planning of vital
government functions.
PPP Concern Mitigation 2 No deal should last for more than 30 years since even the most detailed
concession agreement can not adequately anticipate future public
needs, technological advances, demographic changes, or the
appropriate value of a contract. Road operators should not be able to
require compensation for measures that would be the normal course of
transportation policy or for establishing state-of-the-art safety
standards. Road operators should compensate the public for legal fees
in the future enforcement of contracts.
PPP Concern 3 3. Concession or lease payments will not meet the long-term value of
the tolls paid by the public.
PPP Concern Mitigation 3 It must be clearly established that the same upfront borrowing could
not be done more cheaply by public entities. The public should not pay
a premium for higher private borrowing costs, oversight costs for
monitoring private entities, and shareholder profits.
PPP Concern 4 4. Lack of transparency and accountability, especially from concession
agreements that are not public before signing.
PPP Concern Mitigation 4 All concession bids and subcontracts by private vendors should be
open public record on-line from the moment they are introduced.
Proposed agreements should be divulged at least six months before
being put to vote. Legislatures must approve of final concession
agreements, not simply empower the administration to enter an
agreement. Most importantly, no agreement should last more than 30
years.
PPP Concern 5 5. Non-compete clauses
PPP Concern Mitigation 5 Should be prohibited.
Factors to consider by decision- What value is the private entity actually bringing to the table that the
makers public could not subcontract for in a shorter deal or accomplish with
their own toll hikes.
Contract structures/techniques Availability contracts;
to protect public interests Prohibition of non-compete clauses;
Sunshine laws disclosing details of concession agreements
Other perspectives See [link]
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Respondent #9
Type of Organization i. Interest Groups
Public interest organization
Top benefits of PPP 1. Motorists internalizing costs of road use;
2. When done right, ensuring money from roads for public
transportation;
3. Potentially faster construction/operational changes
PPP Concern 1 Public entities might strike economically harmful deals
PPP Concern Mitigation 1 Ensure sufficient public input and governmental oversight, along
with expert independent advice, to prevent such situations.
Protections probably need to be in state authorizing statutes.
PPP Concern 2 Private sector's interest is not always consistent with the public
interest; e.g., toll increases could put more vehicles on non-toll roads
and thus increase public costs.
PPP Concern Mitigation 2 Increase public interest protections in P3 contracts
PPP Concern 3 Greenhouse gas emissions typically are not addressed, since more
vehicles mean more profit for the private sector.
PPP Concern Mitigation 3
PPP Concern 4 Concession lengths are too long to address technological changes,
accountability of decision makers, etc.
PPP Concern Mitigation 4 Limit concession lengths to approximately 3035 years, or roughly
one generation.
PPP Concern 5
PPP Concern Mitigation 5
Factors to consider by decision- 1. Economic advantage over the long term;
makers 2. Effects on related transportation systems;
3. Public involvement and buy-in.
Contract structures/techniques
to protect public interests
Other perspectives The [state] P3 statute does not include any public involvement
requirements or legislative voting on the contract, does not have a
concession length limitation, and does not require high-level state
DOT involvement. This could lead to a very poorly written P3
contract (for one of the "bridges to nowhere") that costs the state lots
of money and gives P3 agreements a bad name.
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Respondent #10
Type of Organization Other;
Chair Neighborhood Board Transportation
Top benefits of PPP HOT
PPP Concern 1 Fixed rail costs
PPP Concern Mitigation 1 BUS and HOT
PPP Concern 2
PPP Concern Mitigation 2
PPP Concern 3
PPP Concern Mitigation 3
PPP Concern 4
PPP Concern Mitigation 4
PPP Concern 5
PPP Concern Mitigation 5
Factors to consider by decision Tax reduction
makers
Contract structures/techniques
to protect public interests
Other perspectives See my [newspaper] Letters to the Editor 23 JAN.
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Respondent #11
Type of Organization Other; University
Top benefits of PPP 1. Ability to attract private capital to invest in transportation,
2. Ability to price transportation services at market rates rather than
political prices
PPP Concern 1 PPP may seek to avoid compliance with local, state, and national land
use and environmental policies
PPP Concern Mitigation 1 State and federal laws that require compliance with all land use and
environmental laws
PPP Concern 2 PPP may seek to avoid innovations such as congestion pricing
PPP Concern Mitigation 2 Require congestion pricing for all new PPP or toll facilities
PPP Concern 3 PPP may oppose investments in transit and other alternatives to
highways
PPP Concern Mitigation 3 Strict ethics and disclosure rules
PPP Concern 4 PPP may undermine comprehensive transportation planning and
work of MPOs
PPP Concern Mitigation 4 Require PPP projects to be consistent with state, local and MPO
transportation plans. PPP projects need to be part of plans not
separate from them.
PPP Concern 5
PPP Concern Mitigation 5
Factors to consider by decision- 1. Financial viability;
makers 2. Comparison of all transportation alternatives;
3. Cost-benefit analysis;
4. Environmental assessment, including air quality and greenhouse
gas emissions
Contract structures/techniques
to protect public interests
Other perspectives PPP should be thoroughly reviewed on a periodic basis.
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Respondent #15
Type of Organization Other
Non-profit environmental group
Top benefits of PPP 1. Potential to harness private sector creativity and efficiency;
2. Potential to leverage public sector transportation funding by
attracting private sector capital.
PPP Concern 1 1. Tend to circumvent normal planning processes
PPP Concern Mitigation 1 Limit or prohibit unsolicited bids; require bids go through normal
planning process
PPP Concern 2 Circumvent and/or undermine environmental reviews
PPP Concern Mitigation 2 As condition of signing agreement, require NEPA process completed
or substantially complete; provide clarity what can be negotiated
with proponent before NEPA process complete
PPP Concern 3 Has not tended to attract private risk sector capital proponents
promised.
PPP Concern Mitigation 3 Require proposer invest a certain amount of equity
PPP Concern 4 Non-compete clauses limit investments that are in public interest
PPP Concern Mitigation 4 Prohibit non-compete clauses
PPP Concern 5 Failure to adequately account for public costs and potential taxpayer
liability, and environmental costs (including sprawl promote).
PPP Concern Mitigation 5 Require full, independent accounting of these items.
Factors to consider by decision 1. full cost and potential taxpayer liability;
makers 2. consistency with planning process;
3. impact on funding and function of other projects;
4. full environmental costs, including secondary impacts promoting
sprawl;
5. full alternatives analysis
Contract structures/techniques See above for various provisions and requirements.
to protect public interests
Other perspectives Our experience with PPPs is that they are far more complex than
initially advertised, and often the public interest is not well-protected.
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Respondent #16
Type of Organization a. State Department of Transportation
Top benefits of PPP 1. Accelerated project delivery;
2. Access to private capital markets;
3. Reduced project costs
PPP Concern 1 Public accountability
PPP Concern Mitigation 1 The private entity needs to be held to the same standard of access to
documents and information as a state DOT would be and implement
full, effective public engagement methods
PPP Concern 2 Stewardship of public assets
PPP Concern Mitigation 2 Public assets, like highway right of way, are held for the benefit of the
citizens of the state. The public interest in those public assets must be
protected--citizens must be confident that private entities aren't
"profiting" on public resources
PPP Concern 3 Risk allocation--what is the proper allocation of risk for project's
moving forward? How can risk be allocated in the contracting?
PPP Concern Mitigation 3 It is imperative to work with sophisticated legal counsel to address
these issues and for state DOTs to work hard to understand and
analyze the risks in advance.
PPP Concern 4 Loss of DOT staff or inability to attract and retain top staff
PPP Concern Mitigation 4 If all the big interesting projects are contracted out, it will become
increasingly difficult to attract and retain top engineers at DOTs
PPP Concern 5
PPP Concern Mitigation 5
Factors to consider by decision 1. Risk Allocation;
makers 2. Ownership of assets--who ultimately owns and controls the
facility?;
3. Capitalization and financial responsibility--does the private party
have the assets to stand behind the work?;
4. Public accountability--does the private company share the values
of the DOT and will they assure public accountability--on the
environmental performance, labor, etc.
Contract structures/techniques A key structure is phasing a contract so that there are "off ramps" at
to protect public interests key points.
Another key contract term is to assure public access to all
information.
Public rights of way must be retained by the public-private
ownership of roads or other facilities leads to distrust.
Other perspectives PPP's range from concessions to construction contracting methods. It
is very important to differentiate between the various types of PPPs
in use rather than lumping them all together. The public
accountability varies significantly from type to type.
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Respondent #17
Type of Organization a. State Department of Transportation
Top benefits of PPP Cost.
Ability to deliver projects sooner.
PPP Concern 1 Lack of ability of state DOTs to competently administer and provide
oversight to P3s.
PPP Concern Mitigation 1
PPP Concern 2 Cost factor and the use of public funds for services providing
essential public services to the private sector.
PPP Concern Mitigation 2
PPP Concern 3 What entity will have final oversight and decision-making authority
on these PPP, particularly as it may involve public safety, homeland
security, and other interest of national priorities.
PPP Concern Mitigation 3
PPP Concern 4
PPP Concern Mitigation 4
PPP Concern 5
PPP Concern Mitigation 5
Factors to consider by decision Level of authority/oversight.
makers Cost
Ownership--National/International Interests
Contract structures/techniques
to protect public interests
Other perspectives
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Respondent #18
Type of Organization i. Interest Groups (Please specify in question 3a)
Labor union representing professional employees in state
government including transportation workers.
Top benefits of PPP I see none in its present form. Having lived through [project] which
used this dangerous and wasteful construction scheme and having
witnessed the dismissal of our struggles to ensure greater oversight
by enough workers who represent the taxpayer's interests, there is
little to like about this practice.
PPP Concern 1 Public Safety: The lack of proper oversight with full authority by state
DOT engineers, resulting in a "fox watching the chicken house"
scenario and public safety concerns.
PPP Concern Mitigation 1 Any such contract must have strict language as to who is in charge,
who has authorization to stop projects and who is responsible for
failures of the process and who represents the public's interest.
Unfettered private interest with profit motives will cut corners every
time.
PPP Concern 2 Too cozy relationship between the public entity, which should be
there for enforcement and oversight, and the private sector.
PPP Concern Mitigation 2 Need strong demarcation between private and public interest
responsibilities. This concept of one big happy family, and we are all
in this together mindset has had dire consequences as we all now
realize. Public employees in their role should not be reporting to
private contractors. Causes huge oversight problems. This should be
prohibited. [(previously referenced project) scenario].
PPP Concern 3 Lack of cost benefit analysis to ensure there are any cost savings or
benefits using these practices.
PPP Concern Mitigation 3 Federal decision makers should require a cost-benefit analysis
particularly in areas of survey, design, materials and construction
inspections, and maintenance to ascertain if practice is saving any tax
dollars compared to DOT engineers performing these services. Many
states have established criteria for such analysis with huge cost
savings being realized.
PPP Concern 4 Public Access to Private Company documents.
PPP Concern Mitigation 4 Contract must clearly state that any and all documents relating to a
particular project are accessible to the "public" under FOIA or other
state regulations.
PPP Concern 5 Conflicts of interests
PPP Concern Mitigation 5 Open door policies that allowed state engineers and private sector
employees to move from one entity to the other unfettered on the
same project [(previously referenced project)]. Need checks and
balances possibly outright prohibition. (Who is my master conflict?)
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Factors to consider by decision- How to Ensure Public Safety.
makers Are there actual Cost Savings?
Is there enough oversight by state engineers?
Are there strict rules for line of Command? Who has Responsibilities
and Authority over project aspects including failures? Are the
penalties enough to deter?
Are their sufficient policies in place to prevent conflicts of interest?
What are the consequences of finances if contractor files bankruptcy?
Contract structures/techniques A return to old, well-established construction techniques with the
to protect public interests right checks and balances that existed and worked well before the
profiteers and the smaller government crowd dismantled a proven
process in order to increase their profits. Government entities,
particularly decision makers, were sold a bill of goods. No tunnels or
bridges were collapsing with the proven methods we once used.
Now everyone feels unsafe.
Other perspectives I would strongly suggest for insightful reading on this subject the
numerous documents prepared by the [state's] and U.S. Inspectors
General and the [state] State Auditor's Office on the [previously
referenced project] for lessons learned on the biggest PPI boondoggle,
known to man.
Respondent #19
Type of Organization m. Financial Advisor
Top benefits of PPP up front cash
faster design/build
PPP Concern 1 Underpricing
PPP Concern Mitigation 1 Regulate investment returns when met return road to public
PPP Concern 2 excessive toll regime
PPP Concern Mitigation 2 limit to cpi
PPP Concern 3 term beyond 30 years
PPP Concern Mitigation 3 limit term
PPP Concern 4 protection of public interest
PPP Concern Mitigation 4 Full transparency of procurement process, no shields regarding
vendor proposals before award
PPP Concern 5
PPP Concern Mitigation 5
Factors to consider by decision- Will they actually achieve economic benefit, could the same result be
makers achieved by a public entity, why pay for 12%+ in equity returns?
Contract structures/techniques
to protect public interests
Other perspectives
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Respondent #20
Type of Organization a. State Department of Transportation
Top benefits of PPP 1. Ability to provide resources, and leverage of resources, unavailable
to public entity.
2. Knowledge of things that public personnel don't have.
3. Transfer of certain risks to private entity.
4. Relinquishment of public service/democratic responsibilities--
private entities are not subject to the same freedom of information,
accountability, and oversight requirements as the public entity is.
So less hassles and you can hide things. Good for plausible
deniability.
PPP Concern 1 Lack of private entity transparency and accountability in regard to
records and information.
PPP Concern Mitigation 1 Build transparency into the contract. Delineate what is proprietary
and what is not in the contract. Require records and information as a
deliverable.
PPP Concern 2 Private entity won't tell you what risks public is assuming, even if
they know. Public entity often doesn't know what risks they are
transferring to private entity--sometimes they do but are only
serving upper class interests. As a result, underclass sections of
society are often impacted unfairly or their needs are discounted.
PPP Concern Mitigation 2 How can distribution of transportation benefits/burdens and risks be
decided in a strategically equitable manner? Government deal
making in transportation infrastructure development may only
include stakeholders and interests of upper class membership.
However, it is the role of government to assure that these deals
benefit society as a whole, including the underclasses. If the spectrum
of public interests is not represented, inequitable distributions of
benefits, burdens, and risks may occur. There must be an approach to
uncovering hidden and indeterminate public risk. In PPP, the
paradigm for business interests where the business interest short
term gain means the long-term public loss, must be changed. The
public interest must be of paramount benefit.
PPP Concern 3 There is often limited state oversight during design and construction
management.
PPP Concern Mitigation 3 The state should do oversight and quality measurements at all stages
of the project.
PPP Concern 4 Selling off our transportation system requires everyone to play by the
rules of business rather than the U.S. Constitution and/or the rule of
law. Constitutional rights may not apply to the privately owned road.
This is a serious concern.
PPP Concern Mitigation 4 The public should not relinquish control of public assets and services.
PPPs are helpers, not a way to sell off the democracy or the
"commons."
PPP Concern 5
PPP Concern Mitigation 5
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Factors to consider by decision 1. The rules of the business game when negotiating a PPP contract--
makers transfer of risk, short term gain, costing, etc.
2. The consequences of long-term social dangers when ignoring
underclass needs and impacts to the environment.
3. How will decision makers assure functional accountability of the
private partner.
4. How will the PPP contribute to equitable distribution of economic
benefits.
5. Long-term developmental impacts both in terms of the value of
money and assets and in risks.
Contract structures/techniques In the contract, deliverables should include freedom of information
to protect public interests requirements, breach of contract definitions, liquidated damage
provisions, and special oversight provisions that require audits and
quality control actions by public entity on the documents, products,
and actions of the private entity.
Other perspectives PPPs for transportation seem to be moving toward the privatization
of all transportation services and assets. This has happened with
many public lands, with communications, and with the air ways. We
can see the results--it is not in the public interest and dismantles the
democracy while profiting only a few.
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Respondent #21
Type of Organization i. Interest Groups (Please specify in question 3a)
Environmental
Top benefits of PPP If a government has reached a debt limit, it may be a way to finance a
public works project.
PPP Concern 1 The private corporation negotiating a project desires to keep the
information confidential, thereby denying the public (and even
elected officials) of many financial details of what they are paying for.
PPP Concern Mitigation 1 Limit what can be kept secret.
PPP Concern 2 Because a private corporation is most interested in the most
profitable project, and not the one that is most needed, they may
force the public agency to entertain construction of projects that are
not a priority for the public--but of course the public will pay.
PPP Concern Mitigation 2 Only allow projects that are the top priority for consideration.
PPP Concern 3 Even for projects that are a priority, there is a limited opportunity to
seek competitive bidding. The agency has a tendency, or even a
requirement, to accept the first proposal with only a narrow and
insufficient window for other bidders to participate.
PPP Concern Mitigation 3 Require a much longer window for additional parties to bid.
PPP Concern 4 There may be a limit on public involvement in the design and final
acceptance of a proposed project. As noted in Concern #1, the same
goes for financial viability. Corporations are resistant to accepting
public opinion, and I believe that is true generally, but a characteristic
that can vary greatly.
PPP Concern Mitigation 4 The public agency has to take control of the project and insist that the
public be involved. This requires political will that may be lacking if
the public agency has (or perceives) a financial need. It may not be
possible to overcome this issue.
PPP Concern 5 The public is inherently the guarantor of last resort. If for any of a
multitude of reasons, a PPP project (and the private partner) fails, the
public picks up the tab. In a proposed local project, the bonds are to
be paid back from tolls for 75 years. Nobody can predict anything for
75 years, and is there a bond big enough to cover it that won't
depreciate in 75 years? I doubt it.
PPP Concern Mitigation 5 Require that the bonds be paid in 30 years. If it can't be done, it's not
appropriate for a PPP.
Factors to consider by decision- Rank the above? They are all important.
makers Transparency
Risk
Track record of the private firm
Is it in the public interest (have alternatives been considered)
Contract structures/techniques I am not familiar with any.
to protect public interests
Other perspectives The public has a hard time paying attention to the dry details for the
PPP trend, and public officials cannot resist the easy money. The
ability to have something built during their term of office without
raising taxes is sooo good. So the corporations are having a field day,
there is little protection for the public.
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Respondent #22
Type of Organization Other
University
Top benefits of PPP 1. More efficient delivery of transportation services.
2. Service improvements since there would be greater incentives to
increase quality of service.
3. Reduce the impact of politics on transportation service delivery.
4. Potential for greater innovation and service experimentation.
5. Ability to raise capital for transportation enhancements over public
sector only financing.
PPP Concern 1 1. Public interest can be secondary to private interest.
PPP Concern Mitigation 1 Make sure that they have competition, not just trade a private
monopoly for a state run monopoly. If a monopoly is created, then
public regulation may be required.
PPP Concern 2 Public sector workers need to be treated fairly.
PPP Concern Mitigation 2 Early retirement;
Buyouts;
Private sector hiring public sector workers;
Worker retraining.
PPP Concern 3
PPP Concern Mitigation 3
PPP Concern 4
PPP Concern Mitigation 4
PPP Concern 5
PPP Concern Mitigation 5
Factors to consider by decision- 1. Are you creating a private monopoly?
makers 2. Will this result in increased capital for infrastructure needs?
3. Will prices be regulated?
4. How will externalities be dealt with?
5. Will money from a brownfields PPP be used to enhance the
transportation system, or be used for general government?
Contract structures/techniques
to protect public interests
Other perspectives
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Respondent #23
Type of Organization d. Other State Agency
Top benefits of PPP Transfer of risk (construction, toll revenue, etc.);
Longer horizon on debt repayment;
Less political "response";
Deeper talent pool to manage project.
PPP Concern 1 May ignore important public concerns (social equity, etc.)
PPP Concern Mitigation 1 Agreement might provide for public subsidy to meet public policy
objectives
PPP Concern 2 Default by "private entity"
PPP Concern Mitigation 2 Could be complex if it involves critical public facility. Financially
surety or insurance could be costly but might deal with this
possibility. Suggest stiff qualifications for "private partner."
PPP Concern 3 Long-term higher cost is major political issue
PPP Concern Mitigation 3 Hard to deal with--even if some good technical arguments.
Explaining risk transfer and net present value of $$ is a nonstarter
with most of the public.
PPP Concern 4
PPP Concern Mitigation 4
PPP Concern 5
PPP Concern Mitigation 5
Factors to consider by decision- What are the risks:
makers Is the private partner qualified?
Is there value in removing the project from direct political control?
What is the political cost of the partnership?
Does the deal pencil out--reasonably?
Contract structures/techniques Probably some form of franchise or easement. You would want to
to protect public interests avoid too many areas of continuing negotiation with conditions and
cancellation provisions (at a reasonable cost).
Other perspectives No--except without some political acceptance it is DOA
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Respondent #24
Type of Organization i. Interest Groups (Please specify in question 3a)
Represent state DOT employees
Top benefits of PPP
PPP Concern 1 Private financing is up to 35% higher than tax exempt financing--
greatly increasing the cost of the project, making them financially
unstable and subject to taxpayer bailout. Also greatly increases toll
levels.
PPP Concern Mitigation 1 Public agencies should utilize tax exempt public financing. Not sure
you can mitigate paying 35% more than you need to... both financing
types--private and public--are secured with the tolls--why would
we choose the far more expensive option
PPP Concern 2 Use of design-build, best value eliminates competitive bidding and
increase project costs. Lack of oversight and public agency
involvement encourages cost overruns and projects built on the cheap
on public right-of-way
PPP Concern Mitigation 2 Prohibit no-bid design-build and require public oversight, design,
and inspection to ensure road safety and cost controls.
PPP Concern 3 Toll roads take money out of our transportation system by moving
revenues/profits
PPP Concern Mitigation 3 Toll revenues should be reinvested into our transportation system
and not siphoned off to multi-national companies that don't remove
the revenue from the system but often take it out of the country
PPP Concern 4 Non-compete clauses and cash payments prevent improvements to
competing public roads and actually increase congestion
PPP Concern Mitigation 4 Prohibit non-compete clauses and cash payoffs--they just confirm the
notion that toll roads aren't about reducing congestion--they are
about increasing it to the point toll roads are viable profit centers.
PPP Concern 5
PPP Concern Mitigation 5
Factors to consider by decision- See above
makers
Contract structures/techniques Require competitive bidding, public oversight, design, and inspection
to protect public interests
Other perspectives The only differences in a traditional toll road and a 3P, is that under
the 3P model you pay up to 35% more for financing and another 20%
or so must be paid out (by contract) in profit to private investors
instead of being reinvested into the system to benefit the public.
