Type of Organization

a. State Department of Transportation

Top benefits of PPP

1. Accelerated project delivery;

2. Access to private capital markets;

3. Reduced project costs

PPP Concern 1

Public accountability

PPP Concern Mitigation 1

The private entity needs to be held to the same standard of access to documents and information as a state DOT would be and implement full, effective public engagement methods

PPP Concern 2

Stewardship of public assets

PPP Concern Mitigation 2

Public assets, like highway right of way, are held for the benefit of the citizens of the state. The public interest in those public assets must be protected-citizens must be confident that private entities aren't "profiting" on public resources

PPP Concern 3

Risk allocation-what is the proper allocation of risk for project's moving forward? How can risk be allocated in the contracting?

PPP Concern Mitigation 3

It is imperative to work with sophisticated legal counsel to address these issues and for state DOTs to work hard to understand and analyze the risks in advance.

PPP Concern 4

Loss of DOT staff or inability to attract and retain top staff

PPP Concern Mitigation 4

If all the big interesting projects are contracted out, it will become increasingly difficult to attract and retain top engineers at DOTs

PPP Concern 5

PPP Concern Mitigation 5

Factors to consider by decision makers

1. Risk Allocation;

2. Ownership of assets-who ultimately owns and controls the
facility?;

3. Capitalization and financial responsibility-does the private party
have the assets to stand behind the work?;

4. Public accountability-does the private company share the values of the DOT and will they assure public accountability-on the environmental performance, labor, etc.

Contract structures/techniques to protect public interests

A key structure is phasing a contract so that there are "off ramps" at key points.

Another key contract term is to assure public access to all information.

Public rights of way must be retained by the public-private ownership of roads or other facilities leads to distrust.

Other perspectives

PPP's range from concessions to construction contracting methods. It is very important to differentiate between the various types of PPPs in use rather than lumping them all together. The public accountability varies significantly from type to type.