Federal Highway Administration rolls out second phase of model PPP language

By David Tanner, Land Line senior editor | 1/16/2015

Six months after the White House created a new office inside the Department of Transportation to educate and promote the use of public-private partnerships for transportation projects, the DOT’s Federal Highway Administration has completed and published the last of its educational materials for states and road planners who choose to use PPPs.

A public-private partnership is literally just that – a partnership or contract between a government entity and a private-sector business to get a project completed.

For highway projects, a PPP or P3 can and often does involve tolling as a way to finance the construction and ongoing maintenance of a lane, road or bridge.

Many states have language permitting the use of PPPs but some do not. The DOT’s Build America Transportation Investment Center and the Federal Highway Administration’s educational materials are there for states and planners to consider – but not necessarily follow to the letter – when considering a PPP.

In September 2014, the FHWA rolled out the first batch of its educational materials – called a model core – for state governments and planners to use when considering public-private partnership involving tolls. It included model legislation and information about financial defaults and early termination of contracts.

On Friday, Jan. 16, the agency published a notice for public comment on the second and final batch of educational materials in its model core.

The latest notice features chapters on roadway capacity, dispute resolution, changes in ownership and consumer protections. Click here to read the draft model guide and provide comments.

Public accountability for PPPs involving tolls has been an issue for the last decade. Truckers were among those who attempted – unsuccessfully – to block the 75-year lease of the Indiana Toll Road to a Spanish-Australian consortium in 2006. That lease saw truck tolls more than double in the first five years of the lease and favor corporate profits over road maintenance. The company that leased the roadway has since gone bankrupt.

Last summer, the U.S. House of Representatives’ Panel on Public-Private Partnerships urged more transparency and accountability for PPP toll roads in its report to Congress.

See related stories:
Panel urges transparency, caution for public-private partnerships
White House memo encourages public-private partnerships

Copyright © OOIDA