Cost-efficiency of highway operations and maintenance of public-private partnerships.

PDFTech ReportSWUTC/14/600451-00086-1DTRT12-G-UTC06Public private partnershipsHighway maintenanceHighway operationsCost effectivenessLiterature reviewsLife cycle analysisCase studiesToll roadsExpendituresTexasTexas A&M Transportation InstituteMartinez, Sergio E.Walton, C. MichaelUniversity of Texas at Austin. Center for Transportation ResearchSouthwest Region University Transportation Center (U.S.)United States. Dept. of Transportation. Research and Innovative Technology AdministrationUS Transportation CollectionWhile the literature on public-private partnerships (PPPs) argues that the private sector\ue2\u20ac\u2122s life-cycleapproach to design and construction results in operational cost efficiencies, empirical support ismissing. This study explored that issue by conducting a four-prong investigation. First, a literaturereview searched for evidence of such efficiencies and methodologies to evaluate them: it found noempirical evidence of superior operations and maintenance (O&M) cost-efficiency in PPPs. Second,a simple methodology to evaluate life-cycle cost-efficiency is proposed, but adequate data andassumptions about O&M costs are needed. Third, since PPP projects in the U.S. are recent andcurrently subject to routine O&M, indicators to compare those costs were proposed as well. Fourth, acase study compared the routine O&M costs of a PPP to those of a system of traditionally deliveredtoll roads. The results showed that the PPP was more cost-efficient in operating expenditures(OPEX) per mile (-60%) and per lane-mile (-53%). The traditional system was more cost-efficient inOPEX per vehicle miles travelled (97%), toll transactions (332%), and toll revenue (20%). However,those three indicators depend on traffic volumes, which were overwhelmingly greater on thetraditional system. While the case study showed cost-efficiency differences between public andprivate sectors, additional research is needed to empirically test the hypothesis of the private sector\ue2\u20ac\u2122sgreater efficiency. Understanding the differences in cost-efficiency between publicly and privatelymanaged roads will help decision-makers to minimize the life-cycle cost of their investments