Interests
From a public perspective, an important component of any analysis of potential benefits and costs of highway public-private partnerships and long-term concessions is consideration of the public interest. As with any highway project, there can be many stakeholders in highway public-private partnerships, each of which may have its own interests.
Stakeholders include regular toll road users, commercial truck and bus drivers, emergency response vehicles, toll road employees, and members of the public who may be affected by ancillary effects of a highway public-private partnership, including users of nearby roads, land owners, special interest groups and taxpayers, in general (see fig. 6). Identification of the public interest is a function of scale and can differ based on the range of stakeholders and the geographic and political domain considered. At the national level, the public interest may include facilitating interstate commerce, as well as meeting mobility needs. State and regional public interest, however, might prioritize new infrastructure to meet local demand or maximum up-front payments to reduce debt or finance
transportation plans above and beyond national mobility objectives. With competing interests over the duration of the concession agreement,
trade-offs will be necessary. For example, if mobility is an objective of the project, high toll rates at times of peak travel demand may be necessary to deter some users from driving during peak hours and thus mitigate
congestion. But, if rates are too high, traffic diversion to free alternate public routes may be an unintended outcome that could adversely affect drivers on those roads.
Figure 6: Various Stakeholder Interests Associated with Highway Public-Private Partnerships
TOLL TOLL
5
Source: GAO analysis of FHWA data.
Toll booth workers Do not want their public wages and benefits to be reduced if the toll road is
privately operated
1 2 3
Government
Might want to be sure that the highway can be used for a mass evacuation in
case of a hurricane or other disaster
Trucker Does not want to pay a
toll but needs to move goods quickly
Trucker 2
Toll booth worker 3
Road users with a low time value 4
Road users with a high time value 5
Government 1
TOLL
Road users with a low time value 4
These road users value their time less and are willing to wait in traffic instead of paying a toll.
Road users with a high time value
These road users value their time more and are willing to pay a toll instead of waiting in traffic.
The public interest in highway public-private partnerships can and has been considered and protected in many ways. State and local officials in the projects we reviewed heavily relied on concession terms. Most often, these terms were focused on ensuring performance of the asset, dealing with financial issues such as toll rates, maintaining the public sector’s accountability and flexibility to provide transportation services to the public, addressing workforce issues, and maintaining the ability to address these concession terms over the life of the contract. Additionally,
oversight and monitoring mechanisms were used to ensure that private partners fulfill their obligations. In addition to concession terms, certain financial analyses were used to protect the public interest. For example, PSCs, which attempt to compare estimated project costs as a highway public-private partnership with undertaking a project publicly, have been used for some highway projects. We found that some foreign governments have also used formal public interest tools as well as public interest criteria tests. However, use of these tests and tools has been more limited in the United States. Not using formal public interest criteria and
assessment tools can potentially allow aspects of the public interest to be overlooked and use of formal analyses before entering into highway public-private partnerships can help lay out the expected benefits and costs of the project.
The highway public-private partnerships we reviewed have used various mechanisms to protect the public interest by holding concessionaires to requirements related to such things as performance of an asset, financial aspects of agreements, the public sector’s ability to remain accountable as a provider of public goods and services, workforce protections, and concession oversight. Because agreeing to these terms may make an asset less valuable to the private sector, public sector agencies might have accepted lower payments in return for these terms.
Public sector agencies involved in highway public-private partnerships have attempted to protect the public interest by ensuring that the performance of the asset is upheld to high safety, maintenance, and operational standards and can be expanded when necessary (see table 3).
Operating and maintenance standards were incorporated in the Indiana Toll Road and Chicago Skyway concession agreements. Based on documents we reviewed, the standards on the Indiana Toll Road detail how the concessionaire must maintain the road’s condition, utility, and level of safety with the intent to ensure that the public would not see any reduction in the performance of the highway over the 75-year lease term.
The standards also detail how the concessionaire must address a wide Asset Performance Measures