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A I R P O R T C O O P E R A T I V E R E S E A R C H P R O G R A M ACRP RESEARCH REPORT 227 2021 Research sponsored by the Federal Aviation Administration Subscriber Categories Aviation â¢ Finance â¢ Terminals and Facilities Evaluating and Implementing Airport Privatization and Public-Private Partnerships Louis Wolinetz Caitlin Ghoshal WSP Washington, DC Denver, CO Mayer Brown LLP Chicago, IL
AIRPORT COOPERATIVE RESEARCH PROGRAM Airports are vital national resources. They serve a key role in trans- portation of people and goods and in regional, national, and interna- tional commerce. They are where the nationâs aviation system connects with other modes of transportation and where federal responsibility for managing and regulating air traffic operations intersects with the role of state and local governments that own and operate most airports. Research is necessary to solve common operating problems, to adapt appropriate new technologies from other industries, and to introduce innovations into the airport industry. The Airport Cooperative Research Program (ACRP) serves as one of the principal means by which the airport industry can develop innovative near-term solutions to meet demands placed on it. The need for ACRP was identified in TRB Special Report 272: Airport Research Needs: Cooperative Solutions in 2003, based on a study spon- sored by the Federal Aviation Administration (FAA). ACRP carries out applied research on problems that are shared by airport operating agen- cies and not being adequately addressed by existing federal research programs. ACRP is modeled after the successful National Cooperative Highway Research Program (NCHRP) and Transit Cooperative Research Program (TCRP). ACRP undertakes research and other technical activi- ties in various airport subject areas, including design, construction, legal, maintenance, operations, safety, policy, planning, human resources, and administration. ACRP provides a forum where airport operators can cooperatively address common operational problems. ACRP was authorized in December 2003 as part of the Vision 100â Century of Aviation Reauthorization Act. The primary participants in the ACRP are (1) an independent governing board, the ACRP Oversight Committee (AOC), appointed by the Secretary of the U.S. Department of Transportation with representation from airport operating agencies, other stakeholders, and relevant industry organizations such as the Airports Council International-North America (ACI-NA), the American Associa- tion of Airport Executives (AAAE), the National Association of State Aviation Officials (NASAO), Airlines for America (A4A), and the Airport Consultants Council (ACC) as vital links to the airport community; (2) TRB as program manager and secretariat for the governing board; and (3) the FAA as program sponsor. In October 2005, the FAA executed a contract with the National Academy of Sciences formally initiating the program. ACRP benefits from the cooperation and participation of airport professionals, air carriers, shippers, state and local government officials, equipment and service suppliers, other airport users, and research organi- zations. Each of these participants has different interests and responsibili- ties, and each is an integral part of this cooperative research effort. Research problem statements for ACRP are solicited periodically but may be submitted to TRB by anyone at any time. It is the responsibility of the AOC to formulate the research program by identifying the highest priority projects and defining funding levels and expected products. Once selected, each ACRP project is assigned to an expert panel appointed by TRB. Panels include experienced practitioners and research specialists; heavy emphasis is placed on including airport professionals, the intended users of the research products. The panels prepare project statements (requests for proposals), select contractors, and provide technical guidance and counsel throughout the life of the project. The process for developing research problem statements and selecting research agencies has been used by TRB in managing coop- erative research programs since 1962. As in other TRB activities, ACRP project panels serve voluntarily without compensation. Primary emphasis is placed on disseminating ACRP results to the intended users of the research: airport operating agencies, service pro- viders, and academic institutions. ACRP produces a series of research reports for use by airport operators, local agencies, the FAA, and other interested parties; industry associations may arrange for workshops, training aids, field visits, webinars, and other activities to ensure that results are implemented by airport industry practitioners. ACRP RESEARCH REPORT 227 Project 03-46 ISSN 2572-3731 (Print) ISSN 2572-374X (Online) ISBN 978-0-309-67387-7 Library of Congress Control Number 2021934639 Â© 2021 National Academy of Sciences. All rights reserved. COPYRIGHT INFORMATION Authors herein are responsible for the authenticity of their materials and for obtaining written permissions from publishers or persons who own the copyright to any previously published or copyrighted material used herein. Cooperative Research Programs (CRP) grants permission to reproduce material in this publication for classroom and not-for-profit purposes. Permission is given with the understanding that none of the material will be used to imply TRB, AASHTO, FAA, FHWA, FTA, GHSA, NHTSA, or TDC endorsement of a particular product, method, or practice. It is expected that those reproducing the material in this document for educational and not-for-profit uses will give appropriate acknowledgment of the source of any reprinted or reproduced material. For other uses of the material, request permission from CRP. Cover figure: LaGuardia Airport Credit: Photo courtesy of the Port Authority of New York and New Jersey NOTICE The research report was reviewed by the technical panel and accepted for publication according to procedures established and overseen by the Transportation Research Board and approved by the National Academies of Sciences, Engineering, and Medicine. The opinions and conclusions expressed or implied in this report are those of the researchers who performed the research and are not necessarily those of the Transportation Research Board; the National Academies of Sciences, Engineering, and Medicine; or the program sponsors. The Transportation Research Board; the National Academies of Sciences, Engineering, and Medicine; and the sponsors of the Airport Cooperative Research Program do not endorse products or manufacturers. Trade or manufacturersâ names or logos appear herein solely because they are considered essential to the object of the report. Published research reports of the AIRPORT COOPERATIVE RESEARCH PROGRAM are available from Transportation Research Board Business Office 500 Fifth Street, NW Washington, DC 20001 and can be ordered through the Internet by going to https://www.mytrb.org/MyTRB/Store/default.aspx Printed in the United States of America
The National Academy of Sciences was established in 1863 by an Act of Congress, signed by President Lincoln, as a private, non- governmental institution to advise the nation on issues related to science and technology. Members are elected by their peers for outstanding contributions to research. Dr. Marcia McNutt is president. The National Academy of Engineering was established in 1964 under the charter of the National Academy of Sciences to bring the practices of engineering to advising the nation. Members are elected by their peers for extraordinary contributions to engineering. Dr. John L. Anderson is president. The National Academy of Medicine (formerly the Institute of Medicine) was established in 1970 under the charter of the National Academy of Sciences to advise the nation on medical and health issues. Members are elected by their peers for distinguished contributions to medicine and health. Dr. Victor J. Dzau is president. The three Academies work together as the National Academies of Sciences, Engineering, and Medicine to provide independent, objective analysis and advice to the nation and conduct other activities to solve complex problems and inform public policy decisions. The National Academies also encourage education and research, recognize outstanding contributions to knowledge, and increase public understanding in matters of science, engineering, and medicine. Learn more about the National Academies of Sciences, Engineering, and Medicine at www.nationalacademies.org. The Transportation Research Board is one of seven major programs of the National Academies of Sciences, Engineering, and Medicine. The mission of the Transportation Research Board is to provide leadership in transportation improvements and innovation through trusted, timely, impartial, and evidence-based information exchange, research, and advice regarding all modes of transportation. The Boardâs varied activities annually engage about 8,000 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 departments, federal agencies including the component administrations of the U.S. Department of Transportation, and other organizations and individuals interested in the development of transportation. Learn more about the Transportation Research Board at www.TRB.org.
C O O P E R A T I V E R E S E A R C H P R O G R A M S CRP STAFF FOR ACRP RESEARCH REPORT 227 Christopher J. Hedges, Director, Cooperative Research Programs Lori L. Sundstrom, Deputy Director, Cooperative Research Programs Marci A. Greenberger, Manager, Airport Cooperative Research Program Theresia H. Schatz, Senior Program Officer Tyler Smith, Senior Program Assistant Eileen P. Delaney, Director of Publications Natalie Barnes, Associate Director of Publications Ellen M. Chafee, Senior Editor ACRP PROJECT 03-46 PANEL Field of Policy and Planning E. Lynn Hampton, Lynn Hampton Associates, Louisville, KY (Chair) Paul M. Aussendorf, GAO, Bainbridge Island, WA (Retired) Michael Louis Cheroutes, Center for Infrastructure Investment, Denver, CO Benjamin DeCosta, DeCosta Consulting, LLC, Atlanta, GA Andrea Ellen Goodpasture, Southwest Airlines Co, Dallas, TX Pamela Griffith-Jones, Nieuport Aviation Infrastructure Partners, Toronto, ON Cathryn G. Cason, FAA Liaison Stacy Swigart, FAA Liaison Liying Gu, Airports Council InternationalâNorth America Liaison
ACRP Research Report 227: Evaluating and Implementing Airport Privatization and Public- Private Partnerships expands upon ACRP Report 66: Considering and Evaluating Airport Privatization (Ernico et al., 2012) to identify lessons learned in U.S. airport public-private partnership (P3) delivery. This guidebook will help airport decision-makers, including airport practitioners and policymakers, develop strategies and capabilities for achieving the benefits of successful implementation of privatization. This research focused on devel- oper financing/operations and long-term lease or sale of commercial service airports and terminals. The guidebook addresses a variety of issues including assessing preparedness to utilize P3s; considerations for selecting a privatization model; best practices for the solicita- tion, engagement, assessment, and selection of the private partner; and best practices for the implementation and oversight of privatization and P3s with key stakeholder engagement. Case studies and project vignettes are included as appendices. A web-based decision tree tool, P3 Readiness Assessment, also developed in this research, can assist airport decision-makers in assessing whether their organization is prepared to imple- ment a P3. The P3 Readiness Assessment is available at https://www.acrp-p3readiness.org/. Another tool developed in the research is the Comparative Deal Matrix, which can be used by practitioners to understand the characteristics of airport P3 trans actions. The Comparative Deal Matrix and a presentation communicating research findings to key technical and non- technical industry stakeholders can be found on the TRB website by searching on âACRP Research Report 227â. A broad range of strategies exists for private sector participation in airport management, operations, and development. This range extends from the lowest level of private involve- ment, such as contracting out for services, to the highest private sector involvement, such as the sale or long-term lease of the entire airport. In the United States, there are many examples of the former, with partial privatizations such as service and management con- tracts and terminal development, but very few of the latter, where the airport has been fully privatized and complete control of the operation is vested with a private entity through a long-term lease or sale. Recently, there has been increased interest in greater privatization in the United States, and some major airports are undertaking major privatization efforts for terminal and air- port modernization and expansion. There are various financial and non-financial reasons an airport may want to consider some form of privatization, such as capital infusion, attracting outside expertise, or generating greater revenues. ACRP Report 66: Considering and Evaluating Airport Privatization provided significant background on the various types of privatization options and presented case studies on F O R E W O R D By Theresia H. Schatz Staff Officer Transportation Research Board
several international airports and U.S. privatization before 2012. Research was needed to build on the information provided in ACRP Report 66 and to leverage experience from more recent privatization activity in the United States and around the world to provide best practices for selecting a privatization model, evaluating proposals, and implementing the model. ACRP Project 03-46 was led by WSP in association with Mayer Brown LLP.
1 Terminology and Organization of the Guidebook 1 Terminology 2 Organization of the Guidebook 4 Guidebook Media and Complementary Tools 6 Introduction 7 Overview of the Research Approach 8 What Is a P3? P A R T I The Context for Airport P3s 13 Chapter 1 Understanding the State of Practice 14 State of Practice: Alternative Project Delivery in the Airport Context 14 Transactions in the United States 16 Chapter 2 Legal and Regulatory Context for Airport P3 Transactions 16 Federal Laws and Regulations 19 Other Airport Investment Partnership Program Regulatory Considerations: Communicating with the Federal Aviation Administration 21 P3s Outside of the Airport Investment Partnership Program 22 State and Local Laws 24 Other Considerations 25 Chapter 3 Case Studies 25 Introduction 25 Summary of Case Studies P A R T I I Implementing an Airport P3 33 Chapter 4 Project Planning 33 Introduction 34 Determining Project Goals and Project Delivery Goals 35 Organizational Capacity 42 Chapter 5 Selecting a Project Delivery Method 42 Introduction 42 Project Suitability for Alternative Project Delivery 47 Determining P3 Feasibility C O N T E N T S
50 Chapter 6 Structuring the Procurement Process 50 Introduction 51 Assessing Market Interest 53 Selecting the Procurement Approach 65 Other Procurement Issues 67 Chapter 7 ProcurementâAdvertisement to Shortlist 67 Introduction 68 Ensuring Transparency and Accountability 69 Project Advertisement 69 Evaluation of Proposals and Shortlist 69 Collaborative Dialogue 71 Performance-Based Requirements 73 Best Practice: Stimulating Innovative Approaches 73 Essential Procurement Documents 78 Chapter 8 ProcurementâPreferred Proponent to Financial Close 78 Introduction 78 Reaching Commercial and Financial Close 82 The Federal Aviation Administrationâs Airport Investment Partnership Program 83 Chapter 9 Contract Management and Oversight 83 Introduction 84 Contract Management 85 Dispute Resolution 87 Best Practice: Meeting Key Performance Indicators 89 Chapter 10 P3 Principles for Airport Projects 91 Appendix A Annotated Bibliography 102 Appendix B Transactions in Comparative Deal Matrix 105 Appendix C Case Studies 136 Appendix D Project Vignettes 144 Appendix E P3 Readiness Assessment 165 Appendix F Project Development Checklists 168 References 172 Glossary 180 List of Abbreviations Note: Photographs, figures, and tables in this report may have been converted from color to grayscale for printing. The electronic version of the report (posted on the web at www.trb.org) retains the color versions.