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NATIONAL NCHRP SYNTHESIS 391 COOPERATIVE HIGHWAY RESEARCH PROGRAM Public Sector Decision Making for PublicPrivate Partnerships A Synthesis of Highway Practice
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TRANSPORTATION RESEARCH BOARD 2009 EXECUTIVE COMMITTEE* OFFICERS Chair: Debra L. Miller, Secretary, Kansas DOT, Topeka Vice Chair: Adib K. Kanafani, Cahill Professor of Civil Engineering, University of California, Berkeley Executive Director: Robert E. Skinner, Jr., Transportation Research Board MEMBERS J. BARRY BARKER, Executive Director, Transit Authority of River City, Louisville, KY ALLEN D. BIEHLER, Secretary, Pennsylvania DOT, Harrisburg JOHN D. BOWE, President, Americas Region, APL Limited, Oakland, CA LARRY L. BROWN, SR., Executive Director, Mississippi DOT, Jackson DEBORAH H. BUTLER, Executive Vice President, Planning, and CIO, Norfolk Southern Corporation, Norfolk, VA WILLIAM A.V. CLARK, Professor, Department of Geography, University of California, Los Angeles DAVID S. EKERN, Commissioner, Virginia DOT, Richmond NICHOLAS J. GARBER, Henry L. Kinnier Professor, Department of Civil Engineering, University of Virginia, Charlottesville JEFFREY W. HAMIEL, Executive Director, Metropolitan Airports Commission, Minneapolis, MN EDWARD A. (NED) HELME, President, Center for Clean Air Policy, Washington, DC WILL KEMPTON, Director, California DOT, Sacramento SUSAN MARTINOVICH, Director, Nevada DOT, Carson City MICHAEL D. MEYER, Professor, School of Civil and Environmental Engineering, Georgia Institute of Technology, Atlanta MICHAEL R. MORRIS, Director of Transportation, North Central Texas Council of Governments, Arlington NEIL J. PEDERSEN, Administrator, Maryland State Highway Administration, Baltimore PETE K. RAHN, Director, Missouri DOT, Jefferson City SANDRA ROSENBLOOM, Professor of Planning, University of Arizona, Tucson TRACY L. ROSSER, Vice President, Corporate Traffic, Wal-Mart Stores, Inc., Bentonville, AR ROSA CLAUSELL ROUNTREE, Consultant, Tyrone, GA HENRY G. (GERRY) SCHWARTZ, JR., Chairman (retired), Jacobs/Sverdrup Civil, Inc., St. Louis, MO C. MICHAEL WALTON, Ernest H. Cockrell Centennial Chair in Engineering, University of Texas, Austin LINDA S. WATSON, CEO, LYNXCentral Florida Regional Transportation Authority, Orlando STEVE WILLIAMS, Chairman and CEO, Maverick Transportation, Inc., Little Rock, AR EX OFFICIO MEMBERS THAD ALLEN (Adm., U.S. Coast Guard), Commandant, U.S. Coast Guard, Washington, DC REBECCA M. BREWSTER, President and COO, American Transportation Research Institute, Smyrna, GA PAUL R. BRUBAKER, Research and Innovative Technology Administrator, U.S.DOT GEORGE BUGLIARELLO, President Emeritus and University Professor, Polytechnic Institute of New York University, Brooklyn; Foreign Secretary, National Academy of Engineering, Washington, DC SEAN T. CONNAUGHTON, Maritime Administrator, U.S.DOT CLIFFORD C. EBY, Acting Administrator, Federal Railroad Administration, U.S.DOT LEROY GISHI, Chief, Division of Transportation, Bureau of Indian Affairs, U.S. Department of the Interior, Washington, DC EDWARD R. HAMBERGER, President and CEO, Association of American Railroads, Washington, DC JOHN H. HILL, Federal Motor Carrier Safety Administrator, U.S.DOT JOHN C. HORSLEY, Executive Director, American Association of State Highway and Transportation Officials, Washington, DC CARL T. JOHNSON, Pipeline and Hazardous Materials Safety Administrator, U.S.DOT DAVID KELLY, Acting Administrator, National Highway Traffic Safety Administration, U.S.DOT SHERRY E. LITTLE, Acting Administrator, Federal Transit Administration, U.S.DOT THOMAS J. MADISON, JR., Administrator, Federal Highway Administration, U.S.DOT WILLIAM W. MILLAR, President, American Public Transportation Association, Washington, DC ROBERT A. STURGELL, Acting Administrator, Federal Aviation Administration, U.S.DOT ROBERT L. VAN ANTWERP (Lt. Gen., U.S. Army), Chief of Engineers and Commanding General, U.S. Army Corps of Engineers, Washington, DC *Membership as of January 2009.
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NATIONAL COOPERATIVE HIGHWAY RESEARCH PROGRAM NCHRP SYNTHESIS 391 Public Sector Decision Making for PublicPrivate Partnerships A Synthesis of Highway Practice CONSULTANTS JEFFREY N. BUXBAUM and IRIS N. ORTIZ Cambridge Systematics, Inc. Cambridge, Massachusetts S UBJECT A REAS Planning and Administration Research Sponsored by the American Association of State Highway and Transportation Officials in Cooperation with the Federal Highway Administration TRANSPORTATION RESEARCH BOARD WASHINGTON, D.C. 2009 www.TRB.org
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NATIONAL COOPERATIVE HIGHWAY RESEARCH PROGRAM NCHRP SYNTHESIS 391 Systematic, well-designed research provides the most effective Project 20-5 (Topic 39-06) approach to the solution of many problems facing highway ISSN 0547-5570 administrators and engineers. Often, highway problems are of local ISBN 978-0-309-09829-8 interest and can best be studied by highway departments Library of Congress Control No. 2008911218 individually or in cooperation with their state universities and © 2009 Transportation Research Board others. However, the accelerating growth of highway transportation develops increasingly complex problems of wide interest to highway authorities. These problems are best studied through a COPYRIGHT PERMISSION coordinated program of cooperative research. In recognition of these needs, the highway administrators of the Authors herein are responsible for the authenticity of their materials and for American Association of State Highway and Transportation obtaining written permissions from publishers or persons who own the Officials initiated in 1962 an objective national highway research copyright to any previously published or copyrighted material used herein. program employing modern scientific techniques. This program is Cooperative Research Programs (CRP) grants permission to reproduce material in this publication for classroom and not-for-profit purposes. supported on a continuing basis by funds from participating Permission is given with the understanding that none of the material will be member states of the Association and it receives the full cooperation used to imply TRB, AASHTO, FAA, FHWA, FMCSA, FTA, or Transit and support of the Federal Highway Administration, United States Development Corporation endorsement of a particular product, method, or Department of Transportation. practice. It is expected that those reproducing the material in this document The Transportation Research Board of the National Academies for educational and not-for-profit uses will give appropriate acknowledgment was requested by the Association to administer the research of the source of any reprinted or reproduced material. For other uses of the program because of the Board's recognized objectivity and material, request permission from CRP. understanding of modern research practices. The Board is uniquely suited for this purpose as it maintains an extensive committee structure from which authorities on any highway transportation NOTICE subject may be drawn; it possesses avenues of communications and cooperation with federal, state, and local governmental agencies, The project that is the subject of this report was a part of the National universities, and industry; its relationship to the National Research Cooperative Highway Research Program conducted by the Transportation Research Board with the approval of the Governing Board of the National Council is an insurance of objectivity; it maintains a full-time Research Council. Such approval reflects the Governing Board's judgment that research correlation staff of specialists in highway transportation the program concerned is of national importance and appropriate with respect matters to bring the findings of research directly to those who are in to both the purposes and resources of the National Research Council. a position to use them. The members of the technical committee selected to monitor this project and The program is developed on the basis of research needs to review this report were chosen for recognized scholarly competence and identified by chief administrators of the highway and transportation with due consideration for the balance of disciplines appropriate to the project. departments and by committees of AASHTO. Each year, specific The opinions and conclusions expressed or implied are those of the research areas of research needs to be included in the program are proposed agency that performed the research, and, while they have been accepted as to the National Research Council and the Board by the American appropriate by the technical committee, they are not necessarily those of the Association of State Highway and Transportation Officials. Transportation Research Board, the National Research Council, the American Association of State Highway and Transportation Officials, or the Federal Research projects to fulfill these needs are defined by the Board, and Highway Administration, U.S. Department of Transportation. qualified research agencies are selected from those that have Each report is reviewed and accepted for publication by the technical submitted proposals. Administration and surveillance of research committee according to procedures established and monitored by the contracts are the responsibilities of the National Research Council Transportation Research Board Executive Committee and the Governing and the Transportation Research Board. Board of the National Research Council. The needs for highway research are many, and the National Cooperative Highway Research Program can make significant contributions to the solution of highway transportation problems of mutual concern to many responsible groups. The program, however, is intended to complement rather than to substitute for or duplicate other highway research programs. Published reports of the NATIONAL COOPERATIVE HIGHWAY RESEARCH PROGRAM are available from: Transportation Research Board Business Office 500 Fifth Street, NW NOTE: The Transportation Research Board of the National Academies, the Washington, DC 20001 National Research Council, the Federal Highway Administration, the American Association of State Highway and Transportation Officials, and the individual and can be ordered through the Internet at: states participating in the National Cooperative Highway Research Program do http://www.national-academies.org/trb/bookstore not endorse products or manufacturers. Trade or manufacturers' names appear herein solely because they are considered essential to the object of this report. Printed in the United States of America
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The National Academy of Sciences is a private, nonprofit, self-perpetuating society of distinguished schol- ars engaged in scientific and engineering research, dedicated to the furtherance of science and technology and to their use for the general welfare. On the authority of the charter granted to it by the Congress in 1863, the Academy has a mandate that requires it to advise the federal government on scientific and techni- cal matters. Dr. Ralph J. Cicerone is president of the National Academy of Sciences. The National Academy of Engineering was established in 1964, under the charter of the National Acad- emy of Sciences, as a parallel organization of outstanding engineers. It is autonomous in its administration and in the selection of its members, sharing with the National Academy of Sciences the responsibility for advising the federal government. The National Academy of Engineering also sponsors engineering programs aimed at meeting national needs, encourages education and research, and recognizes the superior achieve- ments of engineers. Dr. Charles M. Vest is president of the National Academy of Engineering. The Institute of Medicine was established in 1970 by the National Academy of Sciences to secure the services of eminent members of appropriate professions in the examination of policy matters pertaining to the health of the public. The Institute acts under the responsibility given to the National Academy of Sciences by its congressional charter to be an adviser to the federal government and, on its own initiative, to identify issues of medical care, research, and education. Dr. Harvey V. Fineberg is president of the Institute of Medicine. The National Research Council was organized by the National Academy of Sciences in 1916 to associate the broad community of science and technology with the Academys í p urposes of furthering knowledge and advising the federal government. Functioning in accordance with general policies determined by the Acad- emy, the Council has become the principal operating agency of both the National Academy of Sciences and the National Academy of Engineering in providing services to the government, the public, and the scien- tific and engineering communities. The Council is administered jointly by both the Academies and the Insti- tute of Medicine. Dr. Ralph J. Cicerone and Dr. Charles M. Vest are chair and vice chair, respectively, of the National Research Council. The Transportation Research Board is one of six major divisions of the National Research Council. The mission of the Transportation Research Board is to provide leadership in transportation innovation and progress through research and information exchange, conducted within a setting that is objective, interdisci- plinary, and multimodal. The Board's varied activities annually engage about 7,000 engineers, scientists, and other transportation researchers and practitioners from the public and private sectors and academia, all of whom contribute their expertise in the public interest. The program is supported by state transportation depart- ments, federal agencies including the component administrations of the U.S. Department of Transportation, and other organizations and individuals interested in the development of transportation. www.TRB.org www.national-academies.org
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NCHRP COMMITTEE FOR PROJECT 20-5 COOPERATIVE RESEARCH PROGRAMS STAFF CHRISTOPHER W. JENKS, Director, Cooperative Research CHAIR Programs GARY D. TAYLOR, CTE Engineers CRAWFORD F. JENCKS, Deputy Director, Cooperative Research Programs MEMBERS NANDA SRINIVASAN, Senior Program Officer KATHLEEN S. AMES, Illinois DOT EILEEN DELANEY, Director of Publications STUART D. ANDERSON, Texas A&M University CYNTHIA J. BURBANK, PB Americas, Inc. NCHRP SYNTHESIS STAFF LISA FREESE, Scoot County (MN) Public Works Division STEPHEN R. GODWIN, Director for Studies and Special Programs MALCOLM T. KERLEY, Virginia DOT JON M. WILLIAMS, Associate Director, IDEA and Synthesis Studies RICHARD D. LAND, California DOT GAIL STABA, Senior Program Officer JAMES W. MARCH, Federal Highway Administration DONNA L. VLASAK, Senior Program Officer MARK A. MAREK, Texas DOT DON TIPPMAN, Editor JOHN M. MASON, JR., Auburn University CHERYL KEITH, Senior Program Assistant ANANTH PRASAD, HNTB Corporation ROBERT L. SACK, New York State DOT TOPIC PANEL FRANCINE SHAW-WHITSON, Federal Highway Administration KOME AJISE, California Department of Transportation LARRY VELASQUEZ, New Mexico DOT DEBORAH BROWN, Virginia Department of Transportation KAREN J. HEDLUND, Nossaman, Guthner, Knox, & Elliot, LLP, Arlington, VA FHWA LIAISON DENNIS HOULIHAN, American Federation of State, County, WILLIAM ZACCAGNINO and Municipal Employees ART JAMES, Oregon Department of Transportation TRB LIAISON MARTINE A. MICOZZI, Transportation Research Board STEPHEN F. MAHER ANTHONY PAGANO, University of IllinoisChicago STEVE SIMMONS, Texas Department of Transportation KEN WARBRITTON, Missouri Department of Transportation PORTER WHEELER, Maryland Transportation Authority KATHERINE A. PETROS, Federal Highway Administration (Liaison) MICHAEL T. SAUNDERS, Federal Highway Administration (Liaison) Cover figure: Chicago Skyway, looking southeast across Calumet River, showing underside of main span and river piers. ACKNOWLEDGMENTS The authors would like to thank Alex Linthicum, who conducted most of the literature review for this project.
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FOREWORD Highway administrators, engineers, and researchers often face problems for which infor- mation already exists, either in documented form or as undocumented experience and prac- tice. This information may be fragmented, scattered, and unevaluated. As a consequence, full knowledge of what has been learned about a problem may not be brought to bear on its solution. Costly research findings may go unused, valuable experience may be overlooked, and due consideration may not be given to recommended practices for solving or alleviat- ing the problem. There is information on nearly every subject of concern to highway administrators and engineers. Much of it derives from research or from the work of practitioners faced with problems in their day-to-day work. To provide a systematic means for assembling and eval- uating such useful information and to make it available to the entire highway community, the American Association of State Highway and Transportation Officials--through the mechanism of the National Cooperative Highway Research Program--authorized the Transportation Research Board to undertake a continuing study. This study, NCHRP Proj- ect 20-5, "Synthesis of Information Related to Highway Problems," searches out and syn- thesizes useful knowledge from all available sources and prepares concise, documented reports on specific topics. Reports from this endeavor constitute an NCHRP report series, Synthesis of Highway Practice. This synthesis series reports on current knowledge and practice, in a compact format, without the detailed directions usually found in handbooks or design manuals. Each report in the series provides a compendium of the best knowledge available on those measures found to be the most successful in resolving specific problems. PREFACE Public sector agencies are increasingly exploring the use of publicprivate partnerships By Jon M. Williams to increase funding available for infrastructure improvement. This study examines the infor- Program Director, mation that is available to properly evaluate the benefits and risks associated with allowing Transportation the private sector to have a greater role in financing and developing highway infrastructure. Research Board The report will be of interest to public sector decision makers seeking to leverage or sup- plement traditional sources of funding with private investment and other participation. Information for the study was gathered through a literature review, a survey of U.S. state departments of transportation and Canadian ministries of transportation, and a second sur- vey of other stakeholders. Supplemental information was gathered through interviews. Jeffrey N. Buxbaum and Iris N. Ortiz of Cambridge Systematics, Inc., collected and syn- thesized the information and wrote the report. The members of the topic panel are acknowl- edged on the preceding page. This synthesis is an immediately useful document that records the practices that were acceptable within the limitations of the knowledge available at the time of its preparation. As progress in research and practice continues, new knowledge will be added to that now at hand.
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CONTENTS 1 SUMMARY 5 CHAPTER ONE INTRODUCTION Methodology, 5 Report Organization, 6 7 CHAPTER TWO PUBLICPRIVATE PARTNERSHIP DEFINITION AND HISTORY Definition of PublicPrivate Partnerships, 7 Evolution of PublicPrivate Partnerships in the United States, 9 PublicPrivate Partnerships Participants, 10 11 CHAPTER THREE PUBLICPRIVATE PARTNERSHIPS DECISION-MAKING TOPICS Project Selection and Delivery, 11 Transparency, 24 Terms of PublicPrivate Partnership Agreements, 28 39 CHAPTER FOUR CONCLUSIONS 42 REFERENCES 46 BIBLIOGRAPHY 51 GLOSSARY OF TERMS, ABBREVIATIONS, AND ACRONYMS 53 APPENDIX A STATE DOT SURVEY QUESTIONNAIRE 65 APPENDIX B STATE DOT SURVEY SUMMARIES 99 APPENDIX C OTHER INDIVIDUALS/INTEREST GROUPS SURVEY QUESTIONNAIRE 102 APPENDIX D OTHER INDIVIDUALS/INTEREST GROUPS SURVEY SUMMARIES 128 APPENDIX E CASE STUDIES