This section summarizes the impacts of using PPP approaches for major capital projects receiving Federal funding under the New Starts program. There are a variety of reasons that the project sponsors interviewed for this report chose to deliver projects using PPP approaches, but in every case at least one of four common benefits of PPPs were realized or expected to occur:
• Project costs were reduced;
• Project duration was shortened;
• Project quality was maintained or enhanced; and/or
• The procuring agencies funding sources were leveraged or enhanced.
Exhibit 3.1 summarizes the quantitative impacts of PPP approaches used by these project sponsors in terms of project cost, timeframe, quality, and funding sources, where applicable or available. Most of the projects were delivered within budget and ahead of the projected timeframe by applying a PPP approach, with consistent or better quality. In some cases, funding sources were also enhanced.
Exhibit 3.1: Summary of PPP Impacts on Selected Transit Projects since 2000
| Project (PPP Approach) | Project Cost | Project Timeframe | Project Quality | Funding Sources | |
| Denver T-REX Southeast Corridor LRT (DB) | ■ Project completed within budget. ■ Estimated building materials cost savings. | ■ 22 months saved due to design-build. | ■ Meets agency's usual design standards. | ■ N/A | |
| South Florida Commuter Rail Upgrades (DB) | ■ Slightly higher costs for DB than estimated for DBB delivery approach. | ■ 4-6 years saved by completing upgrades as one project. | ■ Higher quality design and construction. | ■ N/A | |
| Minneapolis Hiawatha Corridor LRT (DB) | ■ Completed within budget as amended. ■ Estimated $25-38M in over-head savings from design-build. | ■ 1 year saved due to design-build. | ■ Meets agency's usual design standards. | ■ N/A | |
| Hudson-Bergen LRT MOS-1 & MOS-2 (DBOM) | ■ Insulated from capital & O&M cost overruns through risk transfer. | ■ 1-2 years saved due to DBOM approach. | ■ O&M portion of DBOM provides incentives for quality product. | ■ N/A | |
| ■ Completed within budget. ■ $10-15M in building materials cost avings. | ■ Estimated 3+ years saved due to PPP. ■ Construction ended 9 weeks early. | ■ Meets agency's usual design standards. | ■ Up-front private funding of $28M, 23% of project cost. | ||
| WMATA Largo Metrorail Extension (DB) | ■ Completed $1M under budget. ■ Overhead cost savings from fewer contractors. | ■ Estimated 2 years saved due to DB. | ■ Innovative and cost-effective design lead to life-cycle cost savings and higher quality product. | ■ N/A | |
| BART Oakland Airport Connector (DBFO) - with PFC Funding | ■ Slightly higher cost for private financing. ■ Reduced estimated cost for O&M as DBFO. | ■ Project may otherwise never occur without DBFO. | ■ DBFO provides incentive to build higher quality project. | ■ Up-front private funding for 50% of estimated $352M project capital cost. | |
The quantitative impacts of the PPP approaches used on the eight projects shown in Exhibit 3.1 are summarized below:
• Cost savings per project ranged from $1 to $38 million, with eight projects experiencing lower overall costs, two projects coming in on-budget, and one project slightly over the engineer's estimate based on a Design-Bid-Build approach to project delivery.
• All seven projects where duration was a factor experienced schedule reductions ranging from 1 to 6 years.
• Four out of the eight projects applied higher design standards due to the integration of design and construction functions for DB projects and the additional risk taken by the contracts using DBOM and DBFO delivery approaches, while the remaining four projects applied design standards comparable to the agency's requirements.
• Private financing to expedite a project was a factor in two projects, with the level of private financing ranging from $28 million (23 percent of the project's capital cost) to $172 million (50 percent of the project's capital cost).