Innovative financing mechanisms such as public-private partnerships (PPPs) provide a greater role for the private sector in the design, construction, and management of transportation facilities. Project implementers should continue to use PPPs strategically to finance transportation improvements where fiscally appropriate. ON TO 2050 emphasizes that PPPs are often a source of financing that must be repaid, rather than a new revenue source. They have the potential to deliver benefits to projects, but these arrangements are complex and must be carefully considered on a transparent, case-by-case basis.

Consideration of whether a project should be delivered via a PPP arrangement must be independent from merits of the transportation project itself. In short, projects must help implement regional priorities for transportation, land use, and other issues before being considered for a PPP. Project implementers should use best practices in comparing the use of a PPP to traditional project delivery, such as applying value-for-money approaches to analysis, assessing the risks of non-compete clauses, and providing formal public review in the evaluation of PPP proposals with appropriate checks on the disclosure of private financial information.

PPP agreements must be structured to protect the public interest, which should include maintaining a specified level of performance with penalties for non-performance, reasonable limits on public risk, and provisions for revenue sharing above certain thresholds. Transportation agencies must also retain their ability to effectively operate, maintain, enhance, and expand transportation infrastructure connected or adjacent to facilities under a PPP. Transportation agencies must maintain ownership of and the right to share all data collected as part of a PPP. Other factors to consider include pricing policies, preferential access policies for law enforcement or transit vehicles, maintenance and operational standards, interoperability and coordination with public facilities, provisions that restrict the public sector’s ability to invest in related projects, and remediation provisions.