2.3.2  Potential Benefits

Although financial capacity is often what initially motivates consideration of P3 concessions, the incentives created by concessions can also lead to greater overall value for the public sector through improved asset management and on-time and on-budget delivery.

The most important potential benefits of using P3 to deliver transportation projects include:

  Risk sharing protecting project sponsors from the cost and consequences of negative events

  Accelerated project delivery compared to traditional DOT project scheduling and delivery methods;

  Introduction of project construction and life-cycle cost efficiencies, and improved quality and system performance from the use of innovative materials and management techniques that may result in higher initial quality to minimize long-term maintenance and operations costs;

 Ability to apply special incentives and disincentives to improve project performance and operating efficiencies;

  A more optimal distribution of risks, that is allocating certain project risks to the private-sector (e.g., financing, schedule, long-term operations, and maintenance) and retaining others with the public agency (e.g., program management, environmental clearance, permitting, and right-of-way acquisition);

  Substitution of private resources and personnel for constrained public resources; and

  Access to new sources of private capital, while leveraging scarce public resources and conserving public sector debt capacity.