In a PPP, the facility remains under ownership of the public sector; however, certain responsibilities are transferred to the private partner, as specified by contract (Samuel 2005); these responsibilities revert back to the public sector once the contract expires. Regardless of this, however, there is a tendency to equate a PPP with complete "privatization" (Samuel 2005; Baxandall 2007), especially on very long-term deals. There was a consensus among the states surveyed that asset control is an important issue, with more than two-thirds of the states surveyed rating it as "very important."
The GAO and U.S. Public Interest Research Group reports on PPPs, and responses from our interested parties' survey identified the concerns on asset control and ownership:
• Toll rate setting, where toll rate changes do not require public sector approval. This includes annual increases and maximum rates allowed by contract, and public sector inability to modify toll rates for transportation network management.
• Non-compete clauses (such as those included in the SR-91 in California concession agreement) that prevented modifications to the leased asset or to competing facilities, or limited-compete clauses that allow modification and/or construction of competing facilities,albeit at a cost. This could include implementation of regional or state transportation plans to accommodate changes over time.
• Some PPP agreements may create a "tax" on normal policy making, by including compensation clauses that require the public sector to pay the private partner for any revenue losses as a result of transportation improvements sponsored by the public sector.
• Safety and maintenance standards.Inability to guarantee state-of-the-art safety and maintenance standards on the leased facility. These can always be included in a contract, but represent an additional cost that will affect the cost or valuation of the facility.
• Project oversight.Reduced ability to control various aspects of transportation asset management, from construction to maintenance and operations.
These asset control and ownership issues are major elements in the formulation of PPP contract terms and are discussed in more detail in the subsequent sections.