...project and seeing how it turns out as a potential solution,” says Craig Eddy, senior transportation engineer for VHB, which is leading the streamlined environmental impact study. Click here to view map

Last year, Chicago closed on a 99-year lease of its Skyway toll bridge. A team led by Macquarie and Cintra, a Spanish private developer, paid Chicago $1.83 billion. “The whole world is talking about it,” says Jack Hartman, executive director of the Illinois State Toll Highway Authority.

Toll Bridge. Washington state’s Tacoma Narrows Bridge is being built using design-build project delivery.

Christopher Voyce, director of Macquarie’s U.S. group, notes potential similar opportunities for managing existing New Jersey and New York roads, and in California, if the $107-billion plan of Gov. Arnold Schwarzenegger (R) is approved by voters and legislators. The plan proposes 1,200 miles of new highway lanes with 550 miles of carpool lanes that could include extra capacity on a toll pay basis (see related story).

In pursuing opportunities to build new roads, private investors will look for contractors and engineers “with an ability to design the project and optimize long-term maintenance at minimum cost,” Voyce says. That doesn’t mean the investor wants to minimize quality, he adds. Efficient investment is a goal, but the investor does not want to end up with an underperforming road. “The private sector is there to provide a service and attract users to the road. Users generally have a free alternative,” he points out.

Magnus Andersson, acting executive vice president of Skanska Infrastructure Development’s U.S. arm, argues against the concern that privately developed road jobs may mean less work for some firms. “It’s a way to create more projects,” he says. Adds Skanska USA Civil Inc. project development leader William H. Allen: “Design-bid-build is still the cornerstone. But we are seeing a lot more PPP and design-build jobs coming to the fore. The challenge is picking the right opportunity.”

Shifting the risk in highway building to the private sector changes—but doesn’t decrease—the public agency’s role. “A state will continue to have oversight of the road. If the private sector misbehaves, there are sanctions in the agreement,” says Macquarie’s Leslie. Moreover, when an agency builds and runs the road, “the public can’t do much beyond complain,” he says. But if it’s a private developer, “the agency acts on behalf of the public.”

PPP is at heart about private businesses providing public services, says Ignacio Barandiaran, leader of Arup’s PPP technical advisory practice in the Americas. Tolling is the preferred method of revenue, because it directly links the private entity’s performance with customer usage. But PPP isn’t always about tolls, he adds. In Canada, the government pays the private operator based on how well it fulfills road performance parameters such as volume flows and lane availability.

Texas’ DOT is taking a fresh approach to private development for the Trans-Texas Corridor. Cintra, in joint venture with Zachry Construction Corp., has a comprehensive development agreement. It includes a $6-billion investment to design, build and operate a four-lane, 316-mile toll road between Dallas and San Antonio as the initial segment. That includes a $1.2-billion payment to the state. C-Z is also refining the master development and financial plan. “When C-Z gives the DOT a proposal, we can let them build it or we can put it out for bid,” says Michael Behrens, TexDOT executive director. Click here to view map

Jim Riley, officer-in-charge for Kansas City-based HNTB Corp.’s Ohio office, sees a growing role in acting as a DOT representative in private deals. “Every DOT has its minimums and maximums in design standards,” he says. “Private investors will come in and pick the minimums. It becomes a negotiation.”

Innovative Project Delivery

These trends only add to the evolution of alternative funding and project delivery. Hal Kassoff, senior vice president with Parsons Brinckerhoff, New York City, notes that “the need to make money by private investors is just a bit of a shift from the need of states to repay debts” when using tolls for Guaranteed Anticipated Revenue bonds or Transportation Infrastructure Finance and Innovation Act loans, known as TIFIA. And some states, like Washington, have been using tolls to pay for road and bridge work for years. There, bonds so far have financed 14 bridges and have been paid back with tolls. The largest is the $849-million Tacoma Narrows Bridge, also a design-build job.

Under design-build, engineers already work for the contractor rather than the owner. That will continue under PPP. In turn, whether PPP or not, projects will depend more on improved ways of delivery and on tolls.

For example, the Illinois toll agency’s use of design-build contracts and performance-based specifications is streamlining construction. It outsources program and construction management, and keeps tight quality control through ISO 9001 certification. This “prompts vigorous processes, ideas and solutions,” says Sharif Abou-Sabh, senior vice president of program manager HNTB.

At the $2.5-billion Woodrow Wilson Bridge project, Virginia and Maryland have taken partnering to new levels. Their DOTs adopted special partnering provisions that “set out a discrete process for field decision-making,” says Larry Anderson, contracts manager with the project’s general engineering consultant Potomac Crossing Consultants. An internal website collects feedback from all parties on project issues. Deadlines are specified for DOT staffers to respond to contractor questions.

Overall, the traditionally adversarial relationship between contractor and engineer is losing steam. “People need to try partnering again, with a full toolkit,” says Anderson. “They can’t just hold a meeting or workshop and say they did it.”

It is fitting that, thanks to advanced partnering, the first half of the Wilson bascule main span carrying I-95 and I-495 is scheduled to open this year—the 50th anniversary of the Interstate.