The Chicago Skyway PPP project and the Trans-Texas Corridor both provide for long-term leases of the project to private agencies, effectively outsourcing both the management of the project and its operations. The Chicago Skyway project was the first long-term lease of an existing toll road in the U.S, which was built and operated by the City of Chicago. In this project, an international group entered into a 99-year lease with the city to operate the structure. Such agreements represent another form of PPP project, one that requires no new construction-brownfield projects-but can take advantage of private sector efficiencies in managing and operating an existing facility in exchange of compensation for private sector either by payment from public agency or revenue from direct user tolls.
All states that authorize the use of PPPs for transportation facilities except South Carolina provide for this type of arrangement. Delaware puts a 50-year cap on the length of these leases and Indiana provides for leases of up to 75 years in length. Such blanket legislative restrictions are not advised, and a decision of a lease term should be made by transportation agencies and private firms based on financial and economic assessments. At the same time, it is true that the level of uncertainty and risk significantly increases for longer term contracts to make financial and economic assessments of a project very difficult (Iseki, Uchida, and Taylor Under review). Therefore, legislators can cap the term if they are seriously concerned-especially when a state wishes to make a lease concession agreement its first foray into PPP usage.