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Highway Users Perspectives on Public-
Private Partnerships
Gregory Cohen, P.E.American Highway Users Alliance
forAASHTO Annual Meeting
Palm Desert, CA
October 24, 2009
Background Highway Users include
AAA clubsTrucking associations & companiesMotorcyclists and Recreational UsersBus CompaniesBusinesses with Private FleetsRural Orgs / Farmers Businesses who rely on hwy customers
All of these groups are represented by us on PPP and tolling issues
Diversity of PPPs Parallel toll roads to relieve congested, untolled roads
(SR91, SR73 - California)
New capacity to developing areas(Dulles Greenway, VA)
Leases (Chicago & Indiana)
HOT lane conversions (I-95/395 in Northern Virginia)
“Public-Public Partnerships”(I-80 in Pennsylvania & New Jersey Tpke proposals)
Shadow tolling, privatized transit, etc.
Highway Users’ Interests
Fair user feesCongestion relief / System ReliabilityExcellent safetyConfidence in bridge/pavement qualityReal-Time Traveler InformationBeing treated like a valued customerStreamlined project delivery
Different PPPs Reflect Different
Attention to Public InterestsHwy Users Involvement in PPP Negotiations
#1 PPP/tolling priority for AAA
Toll/pricing schedule and fairnessMarket-based, capped, public rate-settingLocal vs. Through TrafficWho benefits: tolled-users or others?
Level-Of-Service Guarantee
Maintenance Guarantee
Public Interests (continued)Safety on facility and nearby routes
Non-compete agreements
Public use of revenues from PPP agreementTo improve the tolled facility?To improve the corridor?To improve State roads?To use for other government needs
Length of lease, renegotiation and oversightRevenue Sharing from TollingEffects on Disadvantaged Population Impact on Interstate Hwy Sys and NHS
Recent HistoryChicago Skyway & Indiana Toll Road PPPs surprise
many – debate over “leasing” PPPs begins
Peters’ US DOT: Fully embrace PPPs & tollsModel leg. lacked public interest protectionDiscretionary Funding“Support for all PPPs”Seen as an alternative to federal funding
Congressional BacklashMost extreme: Threat to “undo” PPPsMore likely: Scaling back of tolling pilots and
federal oversight and disapproval authority
CommissionsNational Surface Transportation Policy and Revenue
Commission:Supports PPPs & a larger federal programOpposes Leasing existing capacitySupports PPPs on new capacity
National Transportation Infrastructure Finance CommissionVMT tax to ultimately replace gas taxDetailed chapter on tolls and PPPs with strong
support for tolling except on rural interstatesSupport for PPPs but detailed discussion on public
interest protection needs.
STAA 2009
Establishes Office of Public Benefit Director appointed by the Secretary will provide leadership and
technical assistance to protect the public interest on toll and PPP projects
Administer toll agreements under 23 USC 129 Restricts use of tolls on federal-aid highways Bans non-compete clauses Requires public comment periods
Monitor compliance of agreements
Report to Congress
Points of Broad Agreement States need more money to improve safety and deal with aging and
inadequate roads and bridges
Motorists/truckers are willing to pay more for better systems
With tight funds, it is extremely difficult in many States to build major new roads without innovative financing
Developed carefully, the interests of your customers can be well served by PPPs and tolling
Developed poorly, the interests of your customers can be ignored or harmed by PPPs and tolling
Public Interest Questions
1. What is the primary purpose of the PPP? To build new capacity or to monetize an existing road
to raise money quickly.
2. If the goal is to raise money, how will it be spent? To benefit the users of the tolled road or to divert to
others?
3. Is the toll rate plan fair to all payers? Who decides? Impacts on local vs. long distance users Impacts by mode and vehicle type
Public Interest Questions (continued)
4. What is the effect of on highway safety? Impacts on the private road or lanes vs. area roads
5. Is the National Highway System enhanced or will the plan create barriers to interstate commerce & tourism?
6. What is a reasonable long-term return for private investors? Factors include length of lease, toll plan, and profit
caps
What Do Hwy Users Need in the authorization bill?
Independent review of PPP / tolling plans developed by state or local elected officials and private investors Clear checklist of dos and don’ts needed to keep private sector
interested
Public involvement from toll payers in PPP development and negotiations. Local AAAs / truckers / highway user groups National AAAs / truckers / highway user groups
An assurance that the primary purpose is to maximize public benefits and make roads more safe, efficient, and productive
An assurance that the primary purpose is NOT to take financial advantage of captive road users, coerce their behaviors, or divert their user fees.
Final Thoughts Our View: PPPs that add new capacity can potentially be a great
benefit to highway users
But many opportunities for abuse exist. All levels-of-government have a responsibility to keep the public interest protected
2006-2008 US DOT over-reached by promoting all PPPs.
A congressional backlash could also go too far by preventing good PPPs that serve the public interest
Balance needed. Independent federal oversight needed.
Involvement from highway users is critical to long-term success.
Questions?
Gregory Cohen, P.E.American Highway Users Alliance
AASHTO Annual MeetingPalm Desert, CAOctober 24, 2009
www.highways.org
