Transportation agencies around the world continue to face fiscal challenges caused by the growing gap between the costs of preserving and expanding highway infrastructure and available highway program funding. The lack of dedicated public funding sources for transportation (in most other countries high motor fuel taxes are generally used non-transportation social programs) and the burdens placed on current transportation infrastructure (both highway and rail) by a growing global economy has long prompted transportation policymakers overseas, especially in Western Europe, to develop and apply alternative ways to finance and deliver needed transportation infrastructure. A number of countries have turned to the private sector for relief in the form of contractual Public-Private Partnerships (PPPs), representing a wide variety of project financing and delivery approaches to access capital markets; implement new technology; and expedite project delivery, operations, and maintenance in a more cost-effective manner. The common element of a PPP is that the public sponsor of infrastructure projects engages the private sector to a greater degree in the performance of certain functions previously handled by the public sector. This can range from contracted maintenance services to full financing, development, operations, and preservation. Some countries have effectively turned over the responsibilities, risks, and rewards associated with performing these functions to private sector through long-term concessions or franchises, whose financing is supported by tolls, shadow tolls, or availability payments (a form of shadow tolls).
With the U.S. Department of Transportation and its surface transportation administrations encouraging their state and local counterparts to consider the selective use of PPP approaches to expedite urgent transportation projects, there is significant opportunity for state and local transportation agencies to add PPP approaches to their means of accomplishing their missions. One way to present the implications and potential applicability of PPP approaches is through the experience gained by early developers and implementers of these alternative delivery approaches. This report does so through a series of case studies and cameos of actual PPP projects from other countries which have long involved the private sector through various forms of PPPs, including England, Australia, New Zealand, Hong Kong, India, Israel, Denmark, Sweden, and Argentina. The report also discusses PPP legislative and project initiatives in a number of developed and developing countries seeking to use PPPs to expedite their transportation infrastructure programs, drawing on the long experience of other nations, such as England, France, Spain, and Italy. This information is intended to inform those in the U.S. considering the use of PPP approaches or interested in learning more about what others have or are doing to develop and implement PPP projects, noting both the challenges and opportunities encountered by long practitioners of these innovative approaches to project finance and delivery.
A companion report focuses on PPP applications in the United States. A third report provides a guidebook on developing and implementing a transportation project as a PPP and is aimed at both the early practitioners of PPP projects as well as those agencies just beginning to consider the possibility instituting some form of PPP arrangement for a particular project stalled for lack of available resources.