This Report on P3 Concessions provides a baseline tracking the evolution of the P3 sector in the United States in the 24 years since the award of the nation's first P3-the Teodoro Moscoso Bridge in San Juan, Puerto Rico. This chapter of the report analyzes the 28 P3 concessions that have reached financial close since 1992, identifying trends in the types of projects developed on a P3 basis, the structure of their procurements, and the tools used to finance them. Table 1 identifies each of the 28 P3 concession projects, identifying their procurement structures and how they were financed.
In addition to tapping into new sources of financing and accelerating the implementation of needed transportation improvements, one of the key motivators for project sponsors to procure projects on a P3 basis is the ability to transfer risk to their private sector partners. These risks include capital construction cost overruns, construction completion schedules, toll revenue levels, and long-term maintenance cost overruns.
As described earlier, two distinct P3 structures have been used in the U.S. over the past 24 years-each of which transfers different risks to the private partner. The nation's earliest P3 transactions involved financings that leveraged toll revenues. Known as "real toll" transactions, these deals involved the significant risk that actual project revenues would fall short of forecasted levels, leaving the private partner unable to repay its debt. In 2009, a new approach was introduced where P3 projects are financed by leveraging a combination of milestone payments for meeting construction deadlines and annual availability payments paid by the project sponsor to the private partner based on its ability to operate the project at a defined level of condition and performance. These so called "availability payment" P3 transactions carry considerably less risk, making them an attractive alternative to real toll P3 projects. While the Report on P3 Concessions includes collective analysis of all 28 P3 projects, given the distinctly different risk profiles of real toll and availability payment concessions, these two groups of projects are assessed separately.
In addition to the construction of new highway facilities, real toll concessions have been used on long-term lease transactions for existing toll facilities (i.e., "asset monetizations"). With these arrangements, private investor/operators are given the right to operate and collect tolls on an existing toll facility for a specified time period in exchange for making an upfront lease payment. The private partner may also be responsible for undertaking capital repairs or for expanding the facilities. The fact that these projects have proven revenue streams that date back decades in some cases mitigates traffic risk to a certain point. However, revenue levels generated by asset monetization concessions are also subject to fluctuations in the economy and are not without risk. The Report on P3 Concessions also contains separate analyses of real toll lease transactions.
Appendix A contains a comprehensive table that arrays the 28 U.S. P3 projects chronologically and by typology. The Appendix A table also identifies the different funding sources used to finance these projects, together with the specific dollar amounts involved. The following sections contain smaller tables conveying select information from the Appendix A table, as well as pie charts showing the composition of the initial financial packages for the 28 U.S. P3 projects. All of this information is derived from the Appendix A table.