Engineering Inc. - September/October 2007 - 19

Road Success to The B Derek Lea By Samuel Greengard Although complex to achieve, publicprivate partnerships can mean a win-win for both parties ill Jordan knows that the road to success often is paved with a few obstacles. As project director for PBS&J, an Atlanta-based firm specializing in large engineering and construction projects, Jordan is on the forefront of an increasingly popular trend to build private roads on public land. n These so-called public-private partnerships (PPPs) work by reducing the government’s capital outlay in exchange for a stake in the profits—typically by collecting tolls. The concept of PPPs and privately owned and operated toll roads first garnered attention in the 1980s. Since then, several states, including California, Virginia, Texas, Georgia, Indiana and Illinois, have experimented with the concept. While proponents laud PPPs as a viable form of transportation management and potential money-maker, critics temper that enthusiasm by branding the practice a half-hearted attempt to avoid tax increases. “It’s a complex issue that involves a lot of different constituencies,” explains Jordan. There are political issues to address, media issues to manage and public perceptions to oversee. PBS&J—which has a major project under way in Georgia—knows just how tough the road can be. PBS&J spent the better part of four years chasing major transportation projects in Georgia. So far, only one has advanced beyond discussion. That project, which calls for the construction of two express toll lanes with high-occupancy vehicle access along Interstates 75 and 575 in northwest Atlanta, is expected to cover some 26 miles of roadway, with estimated costs of more than $4 billion over six years. If it succeeds, transportation officials say, the project should eliminate gridlock along the heavily trafficked route. But it won’t be easy. “There’s a great deal of profit potential and risk,” explains Jordan. As cash-strapped government and public agencies search for new ways to maintain existing routes and build new ones, PPPs and other nontraditional approaches are gaining momentum. Simply put, an effective PPP helps public agencies leverage private-sector technical, management and financial resources to strengthen existing transportation systems. These partnerships encompass several approaches and typically authorize a private company to operate the road and collect tolls for a predetermined number of years. Richard G. Little, director of the Keston Institute for Public Financing Infrastructure at the University of Southern California, says the approach, often called “Tolls not Taxes,” holds promise. “When a public-private partnership is done right, everyone winds up happy,” says Little. “The community has a new roadway and the private-sector organization has a revenue stream.” Driving Results Here’s how it works: A government entity grants a private company the right to design, build and operate a toll facility in exchange for the right to collect tolls. The concession fee typically is derived from the net present value of a revenue stream created by extending a deal from 25 to 100 years or longer. “It is, in effect, super-longterm borrowing, and the fact that it would be considered [new money for transportation] is an indicator of how desperate we are for transportation funding,” explains Steve Stagner, president of ACEC’s Texas Member Organization—the Texas Council of Engineering Companies (CEC). sEptEmbER / oCtobER 2007 ENGINEERING INC. 19
Engineering Inc. - September/October 2007

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