In addition to the use of P3s in the DoD and Corps, there are a number of P3-related projects that fall under the purview of the Department of Transportation. Just a few of the transportation infrastructure projects benefiting from the P3 model include: the Indiana Toll Road; Chicago
137 Laura Fried-Studlo, Water Bill to Boost Public-Private Partnerships, GRAVEL2GRAVEL
CONSTRUCTION &REAL EST.L.BLOG (June 10, 2014), http://www.gravel2gavel.com/2014/06/water- bill-to-boost-public-private-partnerships.html.
138See Water Infrastructure Finance and Innovation Act of 2014, Pub. L. No. 113-121, 128 Stat.
1332.
139Id.
140 TIFIA is a successful federal program that has supported major P3 transportation projects. Like
TIFIA, WIFIA encourages P3s by making low-cost federal loans available to projects that include private partners, as long as the project is publicly sponsored and the local public agency supports it. By lowering the cost of public debt, these low-interest loans give projects more capacity to bring in equity or private debt.
Skyway; I-595 improvements near Fort Lauderdale, Florida; Capital Beltway (I-495) HOT (high occupancy toll) lanes project in northern Virginia; Hudson-Bergen Light Rail in New Jersey; Port of Miami Tunnel in Miami; Ohio River Bridges East project connecting the east end of Louisville, Kentucky, near Prospect, to southern Indiana near Utica; and the Goethals Bridge Replacement Project connecting Staten Island, New York, to Elizabeth, New Jersey.141 These projects, more importantly, also benefit from Department of Transportation Infrastructure Finance & Innovation Act (“TIFIA”), which is a federal government loan for the implementation of infrastructure projects.142
The $2 billion North Tarrant Express A is a leading and recent example in the use of the P3 model for transportation infrastructure development. North Tarrant Express A is a design/build/finance/operate project to manage lanes and upgrade existing facilities on 13 miles of interstate in the Dallas- Fort Worth Metro area.143 This project is financed by $650 million in TIFIA loans, $427 million in private equity, $400 million in private activity bonds, and $573 million in state funds.144
Notwithstanding these projects and others, “private investment in U.S. highways and transit has been modest in comparison to spending by all levels of [the federal] government.”145 A 2014 panel on P3s composed of members of the Committee on Transportation and Infrastructure of the House of Representatives found that “using P3s for the delivery of surface transportation projects in the United States is a fairly recent trend.”146 The 2014 panel also acknowledged P3s’ importance to both the development and delivery of transportation and infrastructure projects.147 The panel found that the successful P3 projects share several factors, including “leveraging the
141 Robert Poole, Jr., Annual Privatization Report 2014 Surface Transportation, REASON FOUND.
5 (2014), http://reason.org/files/apr-2014-surface-transportation.pdf.
142See ROBERT KIRK &WILLIAM MALLETT,CONG.RESEARCH SERV.,R42877,FUNDING AND
FINANCING HIGHWAYS AND PUBLIC TRANSPORTATION 22–24 (2013), https://www.asphaltpavement.org/ michele/CRS%20report.pdf.
143Build America Transportation Investment Center (BATIC): North Tarrant Express Segments 1
& 2A, U.S. DEP’T. TRANSP. (July 5, 2016), https://www.transportation.gov/policy-initiatives/build- america/north-tarrant-express-segments-1-2a-dallas-fort-worth-tx.
144Id.
145 KIRK &MALLETT, supra note 142, at 23.
146 TRANSPORTATION &INFRASTRUCTURE REPORT, supra note 5, at 24. 147Id.
strengths of the public and private sectors, appropriate risk transfer, transparent and flexible contracts, and alignment of policy goals.”148 Internationally, P3s have been used more frequently, but have also yielded mixed results.149
Despite a United States municipal bond market of $3.7 trillion, a significant amount of which is allocated for infrastructure financing, the infrastructure needs of the nation are well into the billions.150 The panel suggested the following steps to improve P3s:
● establish a Transportation Procurement Office (“TPO”) to work with agencies to implement P3 best practices, including sample model contracts. The TPO would issue best practices for standardizing state P3 authorities, including fair and balanced assumptions made in the calculations, consistency on unsolicited bids, non-compete clauses, and other substantive elements; ● limit project delays and budget overruns;
● guarantee “more accountable expenditure of taxpayer dollars over the life cycle of the project”;
● direct the TPO to develop and implement performance standards for project delivery for P3 projects falling under the committee’s jurisdiction;
● require the DOT to have its state equivalents compile and submit annual reports on projects that receive federal funds;
● require the DOT to make state transportation annual reports available to the public and give Congress information on project performance data and national trends;
● facilitate the DOT’s progress in the Moving Ahead for Progress in the 21st Century Act (MAP-21) (P.L. 112-141) to encourage “simplification and standardization of P3 contracts”;
● encourage the DOT to collaborate with and support other federal, state, and local agencies to share information about P3s;
● encourage collaboration by states to realize common infrastructure objectives; and
148Id. 149Id. 150Id.
● form P3s early in projects to, among other things, form community consensus.151
Given the nation’s infrastructure need to pave the way for greater P3 use in surface transportation projects, President Obama signed into law the Fixing America’s Surface Transportation Act (“FAST”).152 This legislation, which became law on December 4, 2015, calls for spending $305 billion over fiscal years 2016 through 2020 for highways, highway and motor vehicle safety, public transportation, motor carrier safety, hazardous materials safety, rail, and research, technology, and statistics programs.