The UK experience has demonstrated that the P3 model can extend to most any public area in need of development or revitalization. The Canadian market, however, lacks depth and is inexperienced by comparison, suggesting that governments may be wise to try their hand in areas that more easily accommodate P3 s before tackling more complicated contract structures. Projects that fall under this umbrella have the combined attributes of:
• large scale / capital intensive
• identifiable revenue stream
• measurable results
Roads, bridges and highways exhibit all of these traits. That's because the large amount of capital required for these projects makes them commercially viable to the private sector, not to mention that these projects tend to be relatively straightforward making it easier for the government to assess and quantify risks. Public-private partnerships also work well here because roads have the potential to generate an identifiable revenue stream through user-paid tolls, thereby permitting the government to compensate the private sector for its capital costs and risks without straining its own coffers.
There are many instances where user tolls are simply inappropriate or economically unfeasible, such as the myriad of inner city roads, local or low-traffic bridges, and even highway systems where there is no alternative "free" route and where the dominant users are already contributors of the local tax base. In these cases, particularly the latter, P3 models can still offer value for money through a system of shadow tolling. Under shadow tolling, the government assumes the toll cost rather than the users, meaning that the government would estimate the usage of the bridge/road in a given year, and would then pay the contractors a sum based on that usage. This model still allows the government to divest from maintenance, operation and construction risks, while also amortizing the large up-front costs that would accompany construction over a long period (usually 20-35 years).