Public-Private Partnerships for Transportation

A combination of deteriorating infrastructure, growing travel demand and declining public revenue is creating a crisis for America’s transportation system. In this context, public-private partnerships (PPPs or P3s) are receiving new emphasis as one alternative that may help states achieve much-needed transportation improvements.

Public-private partnerships are contractual agreements between public and private sector partners. They allow private companies to assume traditionally public roles in infrastructure delivery, but keep ultimate ownership, oversight and responsibility in public hands. As many as a dozen types of such partnerships exist. In some, facilities are built, financed, renovated or operated by private companies in return for the right to collect user fees such as tolls. In others, the state pays a private company directly, sometimes based on how well certain performance goals have been met.