Study: few US toll roads projects use PPPs

Twenty-four toll road projects in the US have involved PPP-type arrangements, out of a total of 235 projects implemented since 1992. PPP approaches are being considered for another 24 toll road projects, according to a study published by the US Federal Highway Administration.

A total of 235 toll road projects worth $161 billion have been undertaken in the US since 1992, but only 24 have involved the private sector, according to a study published by the Federal Highway Administration.

Toll roads: public domain

The study was commissioned by the administration to better understand how tolling has contributed to transportation funding since its use was authorised by the Intermodal Surface Transportation Efficiency Act (ISTEA, pronounced “ice-tea”) in December 1991.This year the US Congress will debate the federal highway program reauthorisation bill.

The survey found that 32 states and one US territory have advanced 235 toll road improvement projects since ISTEA was enacted. Of those projects, only 24 have been implemented as public-private partnerships (PPP), with a capital cost of $22.2 billion. PPP approaches are also being considered for another 24 projects totalling $33.3 billion.

The figures exclude long-term concessions of public toll road facilities such as the Chicago Skyway and the Indiana Tollroad.

By comparison, the UK has delivered 43 transport projects with the participation of the private sector since the enactment of its Private Finance Initiative in 1992, according to a 2006 factsheet produced by the PPP Forum.

Texas, California and Florida ranked as the three US states with the most toll road projects overall at 78, 45 and 37, respectively. Texas has enacted an 18-month moratorium on its PPP programme for toll roads, while California has yet to pass general enabling legislation for PPPs. Florida has an active PPP programme being used to develop toll roads, but the Port of Miami tunnel, a high-profile PPP in the state, recently failed to achieve financial close.

The study concludes that the role of the private sector in toll road development and finance is growing thanks to new forms of government credit support such as the Transportation Infrastructure Finance and Innovation Act (TIFIA), the introduction of international best practices into US toll project finance.

Despite the more than 50 percent increase in total highway funding since ISTEA, the proportion of total transportation funding represented by user fees in the form of fuel taxes, tolls and fares has remained about constant. 

Tolls continue to contribute about 5 percent of total highway revenues, the study concludes. Tolls also constitute more than $500 million of department of transportation revenue in six large states: Florida, Illinois, New Jersey, New York, Pennsylvania and Texas.

Engineering and consulting firm Parsons Brinckerhoff carried conducted study for the administration.