Pennsylvania recently joined the ranks of more than 30 other states when Gov. Tom Corbett signed legislation permitting public-private partnerships (P3s) for transportation projects. 74 Pa. C.S. §§ 9101-9124. The Public and Private Partnerships for Transportation Act allows PennDOT and other public transportation entities to partner with private companies to finance, deliver, operate and maintain transportation-related projects. P3s may receive all or a portion of the revenue generated (such as via tolls or user fees) in exchange for providing services or facilities. The law applies to the construction of new transportation facilities and the improvement of existing facilities.
Under the law, the state would, for instance, retain ownership of a busy roadway while a private firm in a P3 would build new express lanes along that roadway. Following construction, the private firm would receive a return through tolling drivers who use the express lanes.
The law created an independent Public-Private Transportation Partnership Board, which will review and approve P3 projects. Private investors can pitch their ideas to the board, which recently approved guidelines for considering both solicited and unsolicited proposals. If the board determines that a state operation would be administered more efficiently by a private company, the private company will be authorized to submit a proposal and enter into a contract to either completely or partially take over that operation for a defined period of time.
Proposals for P3s will be evaluated on the basis of pre-established criteria with assigned weights, including: cost; financial commitment; innovative financing; technical, scientific, or socioeconomic merit; public reputation, qualifications, and financial capacity of the private entity; ability of the project to improve economic growth, improve public safety, reduce congestion, increase capacity or rehabilitate, reconstruct or expand an existing transportation facility; and other factors deemed appropriate by the public entity.
For unsolicited proposals, private entities are encouraged to request one-on-one meetings with PennDOT's P3 office and/or a public transportation entity to discuss potential proposals before submission. As part of such one-on-one meetings, the P3 office and/or public entity may...