In the U.S. transportation arena, PPPs gained attention in the 1990s. Some of the early applications of design-build were introduced in association with PPPs, to address requirements for greater certainty in design and construction costs.
A few of the early PPP transportation projects employed a tax-exempt finance model. The E-470 toll road in Colorado, for example, used a success fee for up-front development, combined with tax-exempt toll revenue bonds; and the Pocahontas Park-way in Virginia, the Greenville Connector in South Carolina, and the Las Vegas Monorail in Nevada used nonprofit corporations.
California's 1989 legislation, AB 680, was one of the earliest U.S. programs for concessions under a design-build-finance-operate-maintain (DBFOM) arrangement. The program produced the SR 91 High-Occupancy Toll (HOT) Lanes, later sold to the Orange County Transportation Authority, and the SR 125 toll road, later renamed Southbay Express-way-although SR 125 recently entered bankruptcy, it remains in full operation.
The latest headlines about concessions have focused on the monetizing of toll road assets by awarding extremely long-term concessions of 75 to 99 years in return for large up-front payments. Examples include the Chicago Skyway and the Indiana Toll Road. The Chicago Skyway arrangement generated controversy when the City of Chicago applied the excess revenues after debt payment to nontransportation programs.