Legal, Administrative and Financial Frameworks Needed to Support a Public-Private Partnership (P3) Procurement Model for Long-Term Lease of the Western Massachusetts Turnpike

  • 2013

Legal, Administrative and Financial Frameworks Needed to Support a Public-Private Partnership (P3) Procurement Model for Long-Term Lease of the Western Massachusetts Turnpike

Author:
Stanton Bigelow
Abstract:

Nationwide, our states' transportation systems are facing a crisis on two fronts: the need to improve levels of service and safety of public infrastructure, and the reality of limited and fragile public funding sources. While Chicago (Chicago Skyway) and Indiana (Indiana Toll Road) were the first in the nation to implement Public-Private Partnership (P3) procurement models for lease of major toll roads to private entities over long periods, other states have taken more cautious approaches. An analysis of the low-debt-service Western Massachusetts Turnpike showed that leasing the Western Turnpike for 50 years could yield a concession fee of $5.33 billion. Compared to anticipated losses of $1.49 billion, a cost-benefit difference in favor of the P3 model of $6.82 billion could be possible. Qualitative insights, particularly those of taxpayers and their elected legislators, must also be considered, and these could outweigh, or support, the cost-benefit in favor of P3 procurement of operating services.