Public Private Partnership in Transportation: The Case of the Washington State

Abstract

While the world has changed dramatically in the last five decades or so, transportation has not been able to keep pace with the overall development. However, in order to ensure prosperity of a country or a state, it is imperative that the ability to move people and products must improve. This paper examines the status of transportation infrastructure and its funding in the State of Washington, USA and suggests some new approaches towards public-private partnership (PPP) in the area. In the process, the success and some of the challenges of PPP are also discussed. In the US, traditionally, people were not charged direct tax such as a toll for using the roads, the primary mode of financing transportation being gas tax. The new sources of revenue collection being developed include: Specific roadway pricing Mileage-based user fees Real-time variable rate roadway pricing. Traditionally, in the US, the public sector shouldered the main responsibility for managing transportation�acquire right-of-way (ROW), design, finance, operate, own, and maintain while the private sector was only allowed to build roads following all the regulation and permits introduced by the government. The reformed PPP model awards ‘design-build’ contracts on a competitive ‘best-value’ basis instead of the conventional ‘low-bid’ basis and thus turn over the design build responsibility to the private sector leaving with the government the financing and maintenance of the roads. The idea is to give road to everybody while allowing the private sector to earn some profit and the public sector to save some money. However, PPP could face a problem if: the traffic and revenue estimates are wrong traffic and revenue risks are taken by private sector but at a huge price construction costs are underestimated the people do not accept the proposition the PPP legislation is not favourable. For any infrastructure project such as transportation to succeed, what is most critical is a set of factors including feasibility, essentiality, reliable revenue forecasts, collateral, credibility, political stability, and transparency. Above all, the government has the responsibility to all its citizens while the private sector is accountable to its stockholders and business partners. What is therefore important is to see how the two parties meet their obligations while building a suitable transportation infrastructure.