Virginia Concrete Conference
March, 2011
Public Private Partnerships
Dan Dawood, P.E. (PA)
Public Private Partnerships
What are Public Private Partnerships (P3)?
A means of bringing together public and
private partners to satisfy social priorities by
utilizing the skills of the private sector, while
relieving government of the burden of large
capital expenditure, and transferring the risk of
potential cost overruns to the private sector.
Public Private Partnerships
Some Facts on P3
• In 1992 the United Kingdom initiated the
Private Finance Initiative (PFI).
• Over the past two decades 1400 P3 contracts
were signed in the European Union.
• P3s are used for prisons, Shipyards and even
health care.
Public Private Partnerships
So what does that all mean?
• Public Sector makes an asset available.
• Public sector provides annual payment
through tolls or combination of payments.
Public Private Partnerships
So what does that all mean?
• Private sector makes an offer to build or
maintain asset.
• Private sector assumes risk for the period of
the concession.
Public Private Partnerships
How do P3’s Work?
SPV
Bank
D/B
Contractor
Maintenance
Contractor
Public Private Partnerships
How do P3’s Work?
Owner pays Concessionaire for leasing Asset
Owner
SPV
Public Private Partnerships
Common Provisions Found in P3
Contracts:
• Agency - Owner sets standards for highway
construction.
• Agency - Owner sets standards for highway
maintenance.
Public Private Partnerships
Common Provisions Found in P3
Contracts:
• Agency - Owner sets standards for highway
for Handback Requirements.
Public Private Partnerships
How do Concessionaires select Pavement Type?
• P3’s for new construction are basically Design
Build Projects.
• Most D-B Contractors and Design Firms use
multi-disciplinary skills such as geotech,
pavements, lighting, and landscaping
consultants.
Public Private Partnerships
How do Concessionaires select Pavement Type?
• Factors affecting pavement type selection:
 Initial Cost
 Long Term Performance
 Maintenance Costs
 Stage Construction
 Owner - Agency Requirements
Public Private Partnerships
How do Concessionaires select Pavement
Type?
• Typically the D-B Contractor’s Team will
evaluate the results of a Life Cycle Cost
Analysis (LCCA)
• M&R’s in the LCCA are based on the SPV
Team and local experience (PMS data if
available).
Public Private Partnerships
How do Concessionaires select Pavement Type?
• D-B Contractors ultimate goal is to WIN
• If the agency allows, the Concessionaire may
choose HMA and perform stage construction
through the concession period.
• P3’s which used concrete pavements***
Germany, Belgium, and Austria rarely saw any
maintenance over the concession period
Public Private Partnerships
How do Concessionaires select Pavement Type?
• Concrete is selected if the LCCA produces
reasonable results
• Contractor experience with concrete placement
• Availability of local materials
• Agency preference in the project requirements!
Public Private Partnerships
Why Concrete Should Be Considered For P3***
• 30 year P3’s in Germany, Austria, and Belgium
with concrete pavements see little to no
maintenance.
• Reducing future maintenance cost benefits
both the contractor and agency in the long
run.
Public Private Partnerships
Why Concrete Should Be Considered For P3***
• Reducing future maintenance cost benefits
the contractor by lowering the total bid
amount for the project.
• Decreasing the amount of routine
maintenance and required M&R also benefits
the motoring public.
Public Private Partnerships
Concrete pavements are a good and viable
pavement solution for P3 projects providing
the contractor and agency with a high
performing low maintenance roadway
structure.