Evaluating highway public-private partnerships: Evidence from U.S. value for money studies

This paper examines the state of practice used in the value for money (VfM) analysis of highway projects in the United States. Based on direct contact with public transportation agencies and the search of project websites, seven VfM studies were selected for a comparative analysis. The paper finds t...

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Bibliographic Details
Published in:Transport policy 2018-02, Vol.62, p.12-20
Main Authors: Kweun, Jeong Yun, Wheeler, Porter K., Gifford, Jonathan L.
Format: Article
Language:English
Subjects:
Project delivery
Project evaluation
Public-private partnerships (PPPs or P3s)
Value for money analysis (VfM)
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Summary:This paper examines the state of practice used in the value for money (VfM) analysis of highway projects in the United States. Based on direct contact with public transportation agencies and the search of project websites, seven VfM studies were selected for a comparative analysis. The paper finds that the choice of public sector comparator (PSC) model varied from one study to another, which is driven by agency experience. The risks transferred from employing the public-private partnership (P3) model are closely related to the choice of repayment schemes. Discount rates used in practice are similar across studies despite wide-ranging debates over appropriate rates in the literature. VfM studies show the advantages of agency municipal bonds are reduced when favorable borrowing rates are available to private partners. The paper lastly examines reasons why agencies chose not to deliver projects as P3s based on VfM studies.
ISSN:0967-070X
1879-310X
DOI:10.1016/j.tranpol.2017.03.009