In the 1990s and early 2000s, the looming fiscal crisis in the nation's surface transportation program resulted in statutory and regulatory changes that gave transportation agencies greater flexibility to involve the private sector to a greater extent in the delivery of transportation infrastructure. This resulted in various pilot and demonstration programs at the federal and state levels to enable selected transportation agencies to apply alternative approaches to project delivery and financing. These experiments and applications were described in the United State Department of Transportation's Report to Congress on Public-Private Partnerships, produced in 2004 by the Federal Highway Administration (FHWA).
In this seminal report, the FHWA defined PPPs as follows:
"A public-private partnership is a contractual agreement formed between public and private sector partners, which allow more private sector participation than is traditional. The agreements usually involve a government agencycontracting with a private company to renovate, construct, operate, maintain, and/or manage a facility or system. While the public sector usually retains ownership in the facility or system, the private party will be given additional decision rights in determining how the project or task will be completed."4 |
PPPs are not the same as privatization in that both public sponsors and private providers function as partners throughout project development and delivery, and in certain instances operations and maintenance. PPPs enable public agencies which are responsible for surface transportation infrastructure to involve private firms to a greater extent than is traditional, performing various functions the private sector is better able to accomplish while retaining those functions the public sector is best at performing.
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4 Report to Congress on Public-Private Partnerships. U.S. DOT, Federal Highway Administration, December 2004.