Washington has transport PPP potential

The public-private partnership (PPP) model might be applicable in Washington D.C., a recent report found.

In particular, the review, commissioned by the Washington Joint Transportation Committee (JTC), claimed a project to toll Interstate 405 (I-405) as well as a lengthening of State Route 509 (SR 509) might benefit from private sector involvement.

AECOM Technology Corporation – an engineering and architectural design company – headed the study, with help from consultancy KPMG and law firm Nossaman.

The report was commissioned as Washington identified a need for $175 billion to $200 billion to update and maintain its transportation infrastructure. That need prompted the Washington state legislature last May to press the JTC to hunt for a consultant to examine what transportation infrastructure might be best suited for privatisation.

With regard to I-405, the report claimed a PPP could provide a 15 percent reduction in construction cost because of “more rapid completion”. Operating cost under a PPP was “34 percent lower,” with an initial analysis concluding the project, which would include a tolled express lane, could generate $1 billion upfront.

Extending SR 509 would reduce the cost of construction by 4 percent, with the cost of preserving the route 25 percent lower, making the project “viable as a PPP, whereas a significant funding gap,” would remain using “traditional delivery”.

But private sector participation is not appropriate in every instance of repairing transportation infrastructure in the state, the report stressed. Extending State Route 167 (SR-167), a project Washington earmarked for possible privatisation, was deemed “not currently financially viable” as a PPP, the report said.

Likewise, the Columbia River Crossing project showed “relatively little difference in the value for money analysis between PPP and traditional delivery,” according to the report, while the Monroe Bypass project “failed the initial screening” because “it has no viable revenue stream”.

The JTA in framing the report emphasised that protecting the “public interest” was at the core of the study. “Traditional public sector delivery is sometime the better value,” the JTA said in its summary.