As of October 1, 2016, the SWUTC concluded its 28 years of operation and is no longer an active center of the Texas A&M Transportation Institute. The archived SWUTC website remains available here.


SWUTC Research Project Description

Strategic Transportation Finance Clearinghouse

University:  Texas A&M University

Principal Investigator:
David Ellis
Texas Transportation Institute
(979) 845-6165

Project Monitor:

Funding Source:  State of Texas General Revenue Funds

Total Project Cost: $45,000

Project Number:  161305

Date Started: 11/1/12

Estimated Completion Date:  10/31/13

Project Summary

Project Abstract:
States and local governments continue to struggle to find sufficient funding for transportation projects. At the same time, an increasing amount of private capital is seeking viable transportation projects to fund.  Despite the opportunity that apparently exists to access private capital and the willingness of public entities to undertake projects, few parties on either side of the potential transaction have participated in actual projects.  The is issue manifests itself for two reasons: (1) investment funds are relatively new to the transportation arena and are not necessarily familiar with the organizations and planning processes that lead to or constrain project development, and (2) regional and local transportation planning entities are not familiar with the analytical process and evaluation criteria investment firms will use to make judgments relative to project viability or the project characteristics different firms will find attractive.

The project will create an ongoing, self-sustaining Strategic Transportation Finance Clearinghouse housed at Texas A&M Transportation Institute that, after the initial startup year, is funded exclusively by contributions from both the private and public sector.  Members of the Clearinghouse will meet on an annual basis to decide on a mutually agreed upon research agenda and conduct an annual meeting, bringing together state, regional and local government officials, investment funds, contractors, owners/operators to discuss new and emerging issues in transportation finance and contracting.

Project Objectives:
This study (1) seeks to identify issues that serve as impediments to the development of a robust relationship between local transportation entities and private sector finance and (2) to form a Strategic Transportation Finance Clearinghouse (STFC) to, through a member-driven research and education program, foster stronger relationship between the local transportation entities and the finance sector.  Members of the STFC will meet on an annual basis to decide on a mutually agreed upon research agenda for the following year that addresses transportation finance issues critical to the members. Over time, this research agenda will provide an experientially-based common body of knowledge regarding privately financed/owned transportation infrastructure projects in the U.S.

Further, the STFC will, as a part of the annual meeting, bring together state, regional and local government officials, investment funds, contractors, owners/operators to discuss new and emerging issues in transportation finance and contracting. Finally, the STFC will develop and maintain a website that will serve to not only publish internal research but also serve as a web portal to transportation finance research and news and information on privately financed/owned/operated transportation efforts worldwide.

There are two guiding principles for the central activities of the STFC.  The first is to help create and foster sound long-term working relationships between the private finance sector and local/regional transportation officials to the benefit of taxpayers.  The second is to provide a significant educational experience for graduate students interested in transportation finance as a career.  It is envisioned that the STFC, while led by experienced professionals, will always be staffed primarily by graduate students who learn to not only do quality research in the area of transportation finance, but learn to lead research efforts as well.

Task Descriptions:
Task 1: Develop profiles of likely clearinghouse members.

  1. Develop list of potential clearinghouse members from the private sector.  Primary targets will include investment banks and bond underwriters.
  2. Develop list and key contacts with potential public sector participants.  Primary targets will include MPOs.

Task 2:  Hold introductory meetings with public and private sector entities.

  1. Meet with private sector participants to explain the concept of the clearinghouse, discuss issues that serve as impediments to developing a more robust transportation finance market, issues in which there is an interest for research and gauge interest in their participation in the clearinghouse.  (Note: The Carlyle Group has already expressed interest and agreed to meet.)
  2. Meet with public sector participants with the same objectives as outlined in Task 2A.

Task 3:  With the results of the meeting discussed in Task 2 completed:

  1.  A formal plan for the establishment of the STFC will be created and funds solicited to support the clearinghouse.
  2. A website will be designed announcing the formation of the clearinghouse.
  3. The time and place of the annual meeting will be announced.

Task 4:  Develop a preliminary research agenda for the first year of operation of the clearinghouse.

Task 5:  Final Report
Write a research report that documents the issues identified as the primary impediments to more frequent and robust partnerships between local public transportation entities and the private finance sector.  As a part of that report a research agenda for the initial year of the clearinghouse will be produced that addresses the primary issues that have been identified.

Implementation of Research Outcomes:
Between now and 2030, there will be a significant gap, well in excess of $100 million, between the amount of revenue needed to funded infrastructure projects and the amount of revenue available to fund those projects in Texas. At the same time, there is private capital seeking to invest in infrastructure projects. Despite the need for capital on the part of the public sector and the willingness to supply capital on the part of the private sector, to date, there have been only a limited number of public-private partnership projects.  This research sought to begin a process to construct an environment in which more projects can be funded with private capital to the benefit of both the public and private sectors.

Products produced by this research

Presentation:  Texas Transportation Finance Options, David Ellis, keynote address presented to over 100 statewide leaders in economic development, San Antonio, Texas, October 2013.

Presentation:  The Role of Public-Private Partnerships in Transportation Finance, David Ellis, keynote address at the Bond Buyer’s 18th Annual Public Finance Conference, Austin, Texas, February 3, 2014.

Impacts/Benefits of Implementation:
The principal impact of this research was to increase awareness and understanding of public-private partnership techniques for policy makers and transportation planners seeking a higher degree of information.  Over time, this will facilitate better decision making.

Web Links:

Final Technical Report