As noted by FTA, the PPPs utilized in the transit industry have primarily taken the form of design-build and design-build-operate-maintain ("DBOM") procurements, which typically do not involve a significant long-term equity investment by the private partner or require the private partner to take ridership or revenue risk. Design-build transit projects funded by FTA include five New Starts projects (Denver RTD's T-Rex project; the South Florida Commuter Rail Upgrades; the Minneapolis Hiawatha LRT Line; the Bay Area Rapid Transit (BART) Extension to the San Francisco International Airport; and the Washington Metro's Largo Metrorail Extension), and one project outside of the New Starts program (the Portland MAX Airport Extension). DBOM projects funded by FTA include the New Jersey Transit Hudson-Bergen LRT and the Port Authority of New York and New Jersey's JFK Airtrain.
The terms of the Pilot Program are clearly designed to encourage more private risk-taking and investment in fixed guideway transit projects than is found in typical design-build and DBOM procurements. Whether the private sector will be willing to accept more risk in transit projects - at a level more comparable to that assumed by private developers in recently procured highway concessions - is not known. Examples in the U.S. transit industry are limited.
• The Las Vegas Monorail Project, completed in 2004, is the only urban rail transit project since the 1920s with a significant portion of the financing based on projected farebox revenues.
• Currently, BART is soliciting proposals for private financing of the Oakland Airport Connector that may depend in part on farebox revenues.
In addition, there are numerous private "transit-oriented development" ("TOD") projects around the country that produce revenues used to support development of related transit projects. However, TOD investments do not involve the procurement of transit facilities (other than station connections) or the developer directly taking ridership or transit revenue risk. [4]
A new type of fixed guideway project that may have significant potential for private investment is the incorporation of "bus rapid transit" ("BRT") into new express toll lanes. Proposed projects include the Northwest Parkway and Georgia 400 Crossroads projects near Atlanta. Unlike stand-alone transit projects that typically cannot produce revenues sufficient to pay their operating costs, much less the cost of construction, projects that integrate BRT with managed toll lanes can use the tolls paid by passenger and commercial vehicles to provide a means of financing construction while providing a return to the private investor. [5]