There are different types of highway infrastructure projects that may be suitable for PPP project delivery structures. The most significant difference is between new and existing highway projects. The operation and maintenance of an existing highway asset typically is referred to as a "brownfield" project. The development and construction of a new highway asset typically is referred to as a "greenfield" project. As a general matter, a greenfield project often will be more complex and expensive than a brownfield project because of the need to plan, finance, design, and construct new infrastructure. Both types of projects can be handled through some form of a PPP. However, the available PPP project delivery structures will vary in the first instance de-pending on whether the undertaking is a brownfield and greenfield project.
For a pure brownfield project involving the operation, maintenance, and preservation of an existing highway asset, the available PPP project structures generally are limited to long-term operation and maintenance contracts or long-term lease concessions. These two structures are on opposite ends of the spectrum with respect to the level of private-sector assumption of financial and other risk. A long-term operation and maintenance contract essentially involves the outsourcing of these functions to a private contractor. A long-term lease concession, however, often involves the transfer of operating, pricing, and many other traditionally public functions to the private sector.
For greenfield projects, a number of different PPP structures will be available depending on which phases of project development (e.g., planning, finance, design, construction, operation, and maintenance) are included within the scope of the project. On one end of the spectrum, a greenfield project could involve a D/B contract with a private entity for the development phase of the project and public-sector retention of operation and maintenance responsibility once construction is completed. On the other end of the spectrum, a private entity could be given the right to design, build, operate, maintain, and finance the development, construction, operation, and maintenance of a new highway under an exclusive franchise and at its own financial risk. The following two subsections describe many of the PPP project delivery structures available for brownfield and greenfield projects.
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3 See brownfield/greenfield highway projects defined during the testimony of Linda E. Carlisle, Esquire, White & Case LLP, at a hearing of the congressional Subcommittee on Energy, Natural Resources, and Infrastructure of the Committee on Finance on "Tax Aspects of Highway Public-Private Partnerships," July 24, 2008, available at http://finance.senate.gov/hearings/testimony/2008test/072408lc test.pdf.