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SWUTC Research Project Description

Financial Arrangements for Alternative Delivery Techniques of Transportation Programs and Projects

University: University of Texas at Austin

Principal Investigator:
C. Michael Walton
Department of Civil and Environmental Engineering
(512) 471-4636

Project Monitor:
Nicolas Rubio
Cintra US
9600 Great Hills, Trail, Suite 250E
Austin, TX  78759

Funding Source: USDOT and State of Texas General Revenue Funds

Total Project Cost: $75,900

Project Number: 600451-00086

Date Started: 1/1/13

Estimated Completion Date: 12/31/13

Project Summary

Project Abstract:
A growing demand for transportation services, combined with significant government budget constraints as a consequence of declining transportation revenues, is exerting increasing pressure on government agencies to find alternative financing strategies. In the last two decades, Public-Private Partnerships (PPPs) for transportation infrastructure development, operation, and management, have received significant attention from academic, institutional, and political circles as one of such non-traditional arrangements. For this reason, emphasis will be placed on PPPs; however, other alternative financial strategies will also be considered. Drawing on literature reviews, case studies, as well as stakeholder surveys and interviews, this project will seek to determine whether or not the use of non-traditional financing is beneficial to the US society at this time. Such benefit, if existing, would be quantified and the conditions required for the successful implementation of such financial mechanisms would be identified. Finally, the institutional and political barriers that jeopardize their implementation will be established, along with recommendations to remove them or work around them.

Project Objectives:
This study seeks to achieve the following objectives.

  • Determine whether or not there is an overall benefit to the US society from using PPPs and other alternative financial mechanisms to fund transportation at this time, and quantify such benefits
  • Establish which conditions are required for non-traditional funding methods to be successful in the current political and economic environment
  • Identify institutional and political barriers to the success of such methods and recommend ways to remove or work around them

Task Descriptions:

1. Literature Review
Findings from pilot studies, draft legislation from other states, academic studies, and industry studies will be synthesized and will inform subsequent research tasks and aid in the establishment of a theoretical framework for proceeding research.

2. Identify critical research topics related to financing alternative delivery methods for transportation programs and projects
A subset of critical research topics will be selected from the literature review that are deemed highly important and critical to successful implementation of public-private partnerships. Research topics will be carried forward for case studies and discussions with key person interviews.

3. Stakeholder surveys and key person interviews
A stakeholder survey will be developed and used as instrument to gain insight from public and industry partners will help guide research. These partners may include, but are not limited to state Department of Transportation staff and officials, other public sector professionals, private infrastructure developers and consultants, and finance industry professionals.

4. Case Studies
Findings and lessons learned from case studies on existing public-private partnerships in US will be completed. Information from case studies will be used to determine whether or not benefits to society were achieved, and benefits will be quantified.

5. Recommendations for policy and institutional changes that will enable successful PPPs
Recommendations for policy and institutional changes that will enable successful PPPs will be made.

6. Final report
A final report with findings from all prior tasks will be completed.

Implementation of Research Outcomes:
This study explored whether the private sector’s life-cycle approach to design and construction of transportation infrastructure results in operational cost efficiencies. The results of a case study showed cost-efficiency differences between public and private sectors, but additional research is recommended to empirically test the hypothesis of the private sector’s greater efficiency. This is important because understanding the differences in cost-efficiency between publicly and privately managed roads will help decision-makers to minimize the life-cycle cost of their investments.

Products developed by this research:

Paper submitted for presentation:  The Efficiency Claim of Public-Private Partnerships:  A Look into Project Operations and Maintenance Costs,Sergio Martinez and C. Michael Walton, submitted for presentation to the Transportation Research Board’s 2015 Annual Meeting.

Impacts/Benefits of Implementation:
The results of this research could increase understanding of the life-cycle cost-efficiency differences between publicly and privately developed projects, and therefore change practices in the way such projects are procured and managed for the benefit of the sponsor agency and the project’s users.

Web Links:
Final Technical Report