Under a build-own-operate ("BOO") delivery approach, the design, construction, operation, and maintenance of a facility is the responsibility of the contractor. The major difference between BOO and other PPP approaches is that with a BOO approach, the private partner owns the facility and is assigned all operating revenue risk and any surplus revenues for the life of the facility.
Exhibit 2.2 summarizes the various possible benefits from using PPPs to develop transit capital projects and operate transit services, the potential application of PPPs to major transit capital projects, and examples of specific U.S. transit projects that used PPP structures. As Exhibit 2.2 illustrates, agency sponsors of transit projects have a broad array of choices for engaging the private sector as partners in their efforts to improve their systems and services, expedite delivery of needed facilities and equipment, and leverage scarce resources.
Exhibit 2.2: Summary of Transit PPPs and Benefits
Type of PPP | Benefits | Applicability to Transit Projects | Examples | |
■ Time savings ■ Cost savings ■ Risk sharing ■ Improve quality ■ Expedite introduction of new technology and innovative approaches | ■ Most commonly used PPP delivery approach among U.S. transit capital projects since 2000 ■ Potential for increased use ■ New Starts process slows delivery ■ Several states have laws | ■ Denver RTD Southeast Corridor LRT ■ South Florida Commuter Rail Upgrades ■ LA MTA Metro Gold Line East Side Extension ■ Minneapolis Hiawatha LRT ■ BART Extension to SFO ■ WMATA Largo Metrorail Extension ■ Portland MAX Airport Extension | ||
■ Same as DB, but transfer of operating and maintenance risks to developer-operator increases incentives for higher quality plan and Project | ■ Second most commonly used PPP delivery approach among U.S. transit capital projects since 2000 ■ Same as DB, but extends private partner's responsibilities into operations and maintenance | ■ Hudson-Bergen LRT ■ JFK Airtrain | ||
■ Same as DBOM | ■ Same as DBOM |
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■ Same as DBOM, but transfer of financial risks to developer-operator | ■ Same as DBOM, but extends private partner's responsibilities into financing | ■ Las Vegas Monorail (private funding only) | ||
■ Same as DBFOM, but transfer of operating revenue risk to private partner | ■ Same as DBFOM, but extends private partner's responsibilities to ownership |
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