THE CONCRETE BRIDGE MAGAZINE

SUMMER 2012

ASPIRE is a quarterly magazine published by PCI in cooperation with the associations of the National Concrete Bridge Council. The editorial content focuses on the latest technology and key issues in the Concrete Bridge Industry.

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10 | ASPIRE , Summer 2012 P E R S P E C T I V E There has been much discussion in the transportation industry over the past 15 years on public-private partnerships ( P 3 s ) . T h o s e e a r l y c o n v e r s a t i o n s progressed from conceptual to actual, and are now being implemented across the nation. This article focuses on greenfield P3 projects. Greenfield is the term used for a project that lacks any constraints imposed by prior work. It also describes a new company or relationship that forms to take part in a new activity without assets or capital, and involves sizable financial risk. Revenue risk and government-backed are two major funding structures for greenfield P3 projects. Revenue risk applies when the private sector assumes the risk of revenue sources managed by the private team. Tolls are an example of this funding stream, which are collected over time to repay funds borrowed for project. Government-backed applies when a public owner agrees to repay resources, over a period of time, borrowed by the private team to build the project. The main government-backed approach in the United States is the availability payment structure. This structure is when the public owner pays the private team a set periodic amount (may be adjusted for inflation) and the payment is reduced if the facility is not available for use under the terms of the P3 agreement. While serving as the Assistant Secretary for Finance and Administration at the Florida Department of Transportation, I was fortunate enough to participate in the development of the Port of Miami Tunnel and I-595 Expressway availability payment structure. It is believed to be the first use of this methodology in the United States. Since the meltdown of the financial markets in 2008, developing new revenue-risk P3s, such as new alignment t o l l r o a d s , h a s b e e n e x t r e m e l y challenging. The financial community is currently unwilling to risk investing in P3 projects unless the repayment is backed by the public owner or the revenue stream is based on actual traffic counts. T h e Tr a n s p o r t a t i o n I n f r a s t r u c t u re Finance and Innovation Act (TIFIA) provides federal financial assistance and is a key tool for moving P3 projects forward. TIFIA can include flexible repayment terms and the interest rate by Lowell R. Clary, Clary Consulting LLC Financing Public-Private Partnerships Innovative Solutions to Deliver Transpor tation Products The Port of Miami Tunnel Project is currently being built by MAT Concessionaires LLC, in partnership with the Florida Department of Transportation, Miami-Dade County, and the City of Miami. Photo: Port of Miami Tunnel. ASPIREBook_Sum12_R02.indb 10 6/29/12 12:38 PM

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