P3 Toolkit: Analytical Studies for Public-Private Partnerships (P3s)

Federal Highway Administration2017PDFBriefUnited States. Federal Highway Administration. Office of Innovative Program DeliveryDeCorla-Souza, Patrick T.United States. Federal Highway Administration. Office of Innovative Program DeliveryUnited StatesPublic private partnershipsInfrastructureGovernment agenciesOnce public agencies have identified a project as having the potential to be procured as a Public\u2013Private Partnership (P3), they typically conduct a series of progressively more rigorous evaluations to determine the best approach to delivering the project. These evaluations help decisionmakers choose how best to structure and procure a potential P3 project. There are several analytical studies and tools used by public agencies to conduct these evaluations: Traffic and revenue (T&R) studies; Preliminary design and cost estimates; Risk assessment; Financial cash flow and valuation models; Value for Money (VfM) analyses. These tools are often used in combination to assess potential procurement approaches, agreement structures, and private sector bids. Revenue forecasts, risk assessment, and cost estimates serve as inputs to a financial model. Risks identified inform any sensitivity analysis conducted with the financial model and may be quantified and monetized for use in the VfM analysis.109