Beyond the principal findings, the team made other important observations:
♦ Public agencies in the host countries have faced or continue to face challenges similar to those in the United States when it comes to providing serviceable highways and roadways. Not a single public agency indicated that it had a surplus of funds available for expansion, restoration, and preservation of its highway assets.
♦ Significant institutional learning, in both the public and private sectors, has occurred in the countries visited over roughly the last decade. Most PPP programs in the countries visited began in response to fiscal crises, and the early PPP arrangements in these countries, while well intentioned, did not necessarily provide the best value for the public. Since that time, the planning, procurement, and management of PPP projects have improved substantially.
♦ The maximum contract period (or concession period) for road or highway contracts observed was 50 years, and most periods ranged from 30 to 40 years. This is a contrast to several recent lease agreements of existing assets with periods ranging from 75 to 99 years coupled with large upfront payments in the United States. None of the countries visited have implemented a model of this sort recently.
♦ All public agencies indicated that PPP arrangements can allow the delivery of projects sooner than would be possible through their other delivery methods. This is a common refrain among agencies with significant PPP experience.
♦ One man's BOOT (build-own-operate-transfer) is another's DBFO (design-build-finance-operate). The definitions, acronyms, and nomenclature used worldwide for PPPs are far from standard.
♦ Innovation by the private and public sectors in PPP arrangements is evident. In the case of the private sector, innovation is typically stimulated by competition for the award of an integrated, commercial enterprise. In the case of the public sector, innovation is typically driven by stewardship of public interests.
♦ In general, the representatives of the PPP contractors the scan team met with exhibited a focus on their customers, an emphasis on life-cycle management and value, and a pride in ownership and stewardship of their assets. The comments and answers of the private participants visited demon- strated to the team members that their business model depends on these attributes.
♦ The two most commonly cited attributes of a project that potentially make it a PPP candidate were scale and complexity. The scale attribute is necessary to offset the transaction costs of PPPs, while complexity is generally seen as the ingredient that enables or perhaps compels the private sector to find novel or unique project solutions.
♦ All public agencies emphasized the need for transparency during the procurement process for PPP projects. The typical scale and complexity of PPP highway projects generate an unusually high level of public, political, and media attention. Nearly all of the agencies visited go to substantial lengths to make project documents and records accessible. In addition, some agencies use a public auditor to monitor proceedings.
♦ The commitment of the government to see PPP project procurements through to closure is essential to stability within this market. Given the enormous transaction costs involved in PPP projects, private participants must have confidence that the public sector is committed to closing deals expeditiously with rare exceptions.
♦ In many of the countries visited, the PPP project development time was remarkably efficient. In some countries, the entire procurement process, from circulation of an environmental document to attainment of financial close, averaged 12 months.
♦ Multiple public agencies claimed that PPP projects provide better price and time certainty on design and construction when compared to the conventional approach. Several of the countries visited indicated that the scale and complexity of and competition for PPP contracts generally lead to design and construction efficiencies, which result in better pricing and scheduling by the private sector.
♦ Practices for managing changes and uncertainty throughout the contract period vary and range from rebalancing actions to limited material adverse effect impacts. Rebalancing is a significant modification process, but one that is intended to be applied symmetrically. The conditions can be modified in either the public or private sector's favor. Similarly, material adverse effect changes can be quite arduous, but in the countries where this approach is taken, the public agencies have evolved to substantially limit the triggers of such provisions.
♦ Handback provisions appear to necessitate good asset management practices by the private sector, but the handback process is generally untested in the countries visited. Typically, the handback provisions specify residual service lives for the different elements of the facility, such as pavements, at the end of the contract's term.