2015 Outlook: P3 Sector

Revisions to Virginia’s transportation P3 policy guidelines will cement the state’s position as a leader in working with the private sector to deliver large, complex project, said Doug Koelemay, director of the Virginia Office of Transportation Public-Private Partnerships. “I’m very positive about the future for P3s in Virginia,” Koelemay said. The new rules adopted in late 2014 will make more transparent the process of determining when P3s are appropriate for a project and provide more political oversight at the early stages of a project, he said.

States and local governments are getting more comfortable with the idea of leveraging private sector investments in public infrastructure through P3s, according to Tim Heilmeier of HTNB Corp.“I’m generally positive about the expansion of the P3 market in 2015,” he said. Partnering with the private sector removes some of the uncertainties about transportation funding caused by Congress’s failure to agree on a sustainable, multi-year federal highway bill, Heilmeier said. “Large, expensive projects need some sense of financial security as they move from planning to construction and operation,” he said. “If that isn’t going to come from Washington, it’ll have to come from the private sector.”

Increased traffic resulting from a more vigorous economy and spurred by plummeting gasoline prices will keep the toll road sector at a stable outlook in 2015, Moody’s Investors Service analyst Maria Matesanz said. “As toll roads gain more traffic, their revenues and financial metrics will improve, given relatively stable operating expenses.,” said Matesanz, a Moody’s senior vice president. “The drop in gas prices could also lead drivers to use less-congested toll roads that provide faster and more predictable trip times, especially in urban areas.”