Better Roads Digital Magazine
Issue link: http://read.dmtmag.com/i/440996
Better Roads December 2014 21 HighwayContractor T he latest surface transportation bill, Moving Ahead for Progress in the 21st Century (MAP- 21) required that the U.S. Department of Transportation (DOT) and the Federal Highway Administration (FHWA) develop public-private partnership (P3) transaction model contracts for the most popular type of P3s for transportation project. This led to the development of the "Core Toll Concession Model Contract Guide," published by the FHWA on Feb. 6, 2014. After public comments, the agency published a revised guide that refl ected the public commentary. Additional draft guides are also expected for publication, with the latest, "Model Public-Private Partnership Core Toll Concession Contract Guide," at publication guide published on Sept. 10. (For a downloadable PDF of the "Model Public-Private Partnership Core Toll Concession Contract Guide," go to fhwa.dot.gov/ipd/pdfs/p3/ model_p3_core_toll_concessions.pdf.) The guide presents key concepts for the structuring and development of legal contracts for highway transporta- tion Public-Private Partnerships (P3) in the United States, according to a report in the Federal Register. "It is part of the broader effort by the FHWA to promote understanding of P3 transactions, which will include a document similar to this guide on availability payment contracts used in P3 trans- actions. The guide is designed to provide industry-standard concepts, relevant common tools and mechanisms, and situational examples applicable to P3 transactions," the Federal Register report notes. (For the original report, go to https:// www.federalregister.gov/articles/2014/09/10/2014-21049/fi nal- core-toll-concessions-public-private-partnership-model-contract-guide.) FHWA says through the guide it is seeking "to create a better understanding of P3 market terms and possible contract struc- tures for use in the consideration and development of P3 transactions." The P3 transactions "represent a potential option for state and local governments as a form of procuring the development, fi nancing, construc- tion, and operation, and maintenance of transportation facilities, including highway projects," FHWA notes in the P3 guide. "The value to the Depart- ment in a P3 transaction is the transfer of costs and subsequent risk related to the design, build, fi nancing, operations, and management of the project to the developer." In return, the developer is rewarded with an agreed-upon compensation – such a toll revenues or availability payments for services performed – for a prescribed term. FHWA says that whether a P3 transaction is attractive to the Department and offers value-for-money for the public needs to be as- Model Public-Private Partnership Core Toll Concession Contract Guide The Federal Highway Administration and the U.S. DOT have put together a guide for P3 transaction model contracts. Here's a look at what you should know. by Tina Grady Barbaccia Q: When were public-private partnerships fist used in the United States? A: The first turnpike was chartered in 1972 and became known as the Philadelphia and Lancaster Turnpike in Pennsylvania. Source: Federal Highway Administration (fhwa.dot.gov/ipd/pdfs/p3/intro_p3.pdf)