•••••••••••••••••••••••••••••••••••••••• Thoughts from the NCSL Partners Project… On Project Acceleration William D. Toohey Jr. •••••••••••••••••••••••••••••••••••••••• | PPPs that involve up-front payments or revenue-sharing arrangements, it is argued, can be used to extract value from existing transportation assets and raise substantial funds for other public projects and purposes. These funds also may be leveraged to create other potential long-term financial benefits for the public sector. For example, part of the $1.83 billion up-front payment for the lease of the Chicago Skyway was used to pay off some of the city's general obligation debt-which improved the city's credit rating and reduced the cost of future debt-and to create a reserve fund that can generate substantial net revenue in interest. This asset had previously operated at a loss and had outstanding debt, which also was paid off by lease proceeds.33 |
The $3.85 billion lease of the Indiana Toll Road was used to fund the 10-year statewide "Major Moves" transportation plan; the transportation infrastructure to be improved or built under this plan also may yield indirect economic benefits to the state. It has been noted, however, that fluctuations in the economy and rising construction costs affect the real value of up-front lease payments to the public sector.34 | |