ASSESSMENT FRAMEWORK FOR CONSIDERING TRANSPORTATION PPPs

Exhibit 3 provides a framework for assessing the potential of a transportation project to be delivered as a PPP. This framework includes both the contextual factors and various institutional issues likely to be encountered in developing and implementing a PPP project.

Exhibit 3 - Context and Potential Institutional Issues of Using PPPs

Among the items displayed in Exhibit 3, one of the most important factors to consider and the hardest to change is the underlying culture of the sponsoring organization - the set of values and beliefs that guide how the organization functions and responds to change. Another key factor in evaluating the potential of using a PPP approach is the legality of private sector involvement in the project relative to funding, project delivery, asset management, risk management, and value capture (whether through toll revenues or incremental taxes or fees on adjacent property whose value is increased due to the enhanced accessibility provided by the PPP project).

Exhibit 4 illustrates the elements of the change process needed to improve institutional willingness to consider using alternative project delivery approaches by:

• Enabling sponsoring agencies to gain insights from prior PPP efforts into best practices for addressing potential impediments to PPPs, listed below in the red box;

• Allowing flexibility in how PPPs can be structured and managed to maximize potential outcomes while protecting the public interest;

• Providing a balanced assessment of alternative project delivery approaches and traditional approaches; and

• Developing an objective basis for determining if a PPP approach provides the potential for greater benefits than the transitional project delivery approach.

The exhibit shows the importance of experience from successful PPP applications in the U.S. and other countries to enhance the potential for alternative project delivery approaches to be considered by project sponsors dealing with funding, congestion, and capacity issues.

Exhibit 4 - Change Process for Addressing Institutional Impediments to PPPs