Toll agencies often find themselves in a financial conundrum. This usually happens when you measure the costs associated with collecting tolls from customers who refuse to pay initially against the toll revenue and fees ultimately collected. If agencies don’t follow certain measures to control their spending, they may end up losing money versus gaining revenue.
Industry leaders and public agencies developing alternative project delivery projects or public-private partnerships (P3s) will tell you that not all projects should be advanced as a P3 project. I consider this important and sage advice to those with established alternative delivery programs and new public owners looking to enter into P3 development.
The financing of transportation projects using toll revenues has long been the province of toll agencies. With the increasing use and recognized benefits of tolled managed lanes, state departments of transportation (DOTs) and other agencies are more engaged in adopting innovative project approaches that apply the tolling principle and the ability to leverage toll revenues to advance much needed capacity improvement projects.
The need for increased investment in the nation’s infrastructure has been well documented. A 2016 infrastructure report prepared by the American Society of Civil Engineers assigned failing grades to virtually every category of public infrastructure in the US.
As states and transportation agencies increasingly use P3 terminology, legislation and approach vary nationally.
“Contractual agreements formed between a public agency and a private sector entity that allow for greater private sector participation in the delivery and financing of transportation projects.” – FHWA Office of Innovative Program Delivery