States have queued up a robust pipeline of public-private partnership deals in the transportation space even as the pace of federally funded projects is expected to quicken ahead of the autumn election.
"It's a big pipeline this year," said Robert Poole, senior transportation director at Reason Foundation, who spoke with The Bond Buyer for an upcoming podcast on transportation-related P3s. "It's more than we've seen in several recent years."
On the federal front, the Army Corps of Engineers is continuing work on its four pilot projects following its first P3,
At the state level, the Southeast region is driving the action, with Tennessee becoming the latest state to authorize P3s, Georgia embarking on its first of a trio of revenue-risk projects, and North Carolina eyeing express toll lanes.
A historic level of federal grants and ramped-up formula funding in the Infrastructure Investment and Jobs Act — which turns three years old in November — may have dampened the need for transportation-related P3s. But the weakening purchasing power of gas tax revenues, political reluctance to raise taxes and a significant road and bridge backlog will continue to support the P3 market, experts said.
"There's an awful lot of owners who are trying to figure out how to take full advantage of the federal money, so they're not necessarily looking at P3s," said Jonathan Gifford, professor at the Schar School of Policy & Government and director of the Center for Transportation Public-Private Partnership Policy at George Mason University.
"We're at a point in the election cycle where the pressure on the federal agencies to get money out on the street is pretty intense," Gifford said. Getting shovels in the ground before November will be a way of "bringing good things to communities at a time when the voters who live in those communities are going to be getting ready to cast their vote," he said.
On the deal front: Louisiana lawmakers last month
Tennessee, which last year became the latest state to authorize P3s for transportation projects,
Georgia's transportation department is in the procurement phase of its first of three revenue-risk P3s for the
North Carolina is "seriously considering" a P3 for express toll lanes for I-77 between Charlotte and the South Carolina state line, Poole said. The state last August rejected Spanish firm Cintra's unsolicited bid, and is still deciding whether it will be a DBOFM.
In the West, the Brightline West high-speed rail project in January
Illinois last year enacted legislation allowing for express toll lanes along the congested I-55 corridor, marking a first for the state. And Virginia — long a leader in the P3 transportation space — has launched its I-495 NEXT project extending I-495 express lanes north to the George Washington Memorial Parkway interchanges near the American Legion Bridge.
Maryland Gov. Wes Moore, a Democrat, last year scrapped plans for what would have been the nation's largest P3 for its Capitol Beltway, saying the state would instead seek $3 billion in federal funds. The move illustrates how states that have the option of federal funds may opt to avoid the more politically difficult choice of P3s.
"If there are design-build deals that are less risky, why would you develop a P3 model?" asked Gifford.
The Army Corps of Engineers is advancing
"We continue to be excited about the prospect of P3s," Snyder said. The success of the Fargo-Moorhead project bodes well for additional P3s in the future, he said.
"I'm not going to be surprised if we have one or two [additional deals] in the next six to 12 months," he said.
Despite ample federal funds and healthy P3 pipeline, road and bridge needs remain high, with more than
"We have a huge set of still as-yet unfunded infrastructure needs and if it's appropriately matched to the project, the P3 model has a lot to offer," Gifford said. "I'm pretty optimistic about the potential for an expanded market."
