In cooperation with:

American Association of State Highway and 

Transportation Officials

National Cooperative Highway Research Program

Public-Private Partnerships 

for Highway Infrastructure: 

Capitalizing on International 

Experience

International Technology Scanning Program March 2009

Sponsored by:
NOTICE

The Federal Highway Administration provides 

high-quality information to serve Government, 

industry, and the public in a manner that 

promotes public understanding. Standards and 

policies are used to ensure and maximize the 

quality, objectivity, utility, and integrity of its 

information. FHWA periodically reviews quality 

issues and adjusts its programs and processes 

to ensure continuous quality improvement.
1. Report No.

FHWA-PL-09-010

2. Government Accession No. 3. Recipient’s Catalog No.

4. Title and Subtitle

Public-Private Partnerships for Highway 

Infrastructure: Capitalizing on International 

Experience

5. Report Date

March 2009

6. Performing Organization Code

7. Author(s) 

Janice Weingart Brown, Robert Pieplow, 

Roger Driskell, Stephen Gaj, Michael J. Garvin, 

Dusty Holcombe, Michael Saunders, Jeff Seiders, Jr., 

Art Smith

8. Performing Organization Report No.

9. Performing Organization Name and Address

American Trade Initiatives

P.O. Box 8228

Alexandria, VA 22306-8228

10. Work Unit No. (TRAIS)

11. Contract or Grant No.

DTFH61-99-C-005

12. Sponsoring Agency Name and Address

Office of International Programs

Office of Policy

Federal Highway Administration

U.S. Department of Transportation

American Association of State Highway and 

Transportation Officials

13. Type of Report and Period Covered

14. Sponsoring Agency Code

15. Supplementary Notes

FHWA COTR: Hana Maier, Office of International Programs

16. Abstract

Public-private partnership (PPP) programs for highway infrastructure are not widely used in the United 

States. The Federal Highway Administration, American Association of State Highway and Transportation 

Officials, and National Cooperative Highway Research Program sponsored a scanning study to collect 

information about PPP programs for highway infrastructure in Australia, Portugal, Spain, and the United 

Kingdom, where PPP experience is more extensive. 

The scan team learned that PPPs are an effective strategy for delivering highway projects, and they are 

service arrangements as much as financial ones. The team observed that potential PPP projects must be 

analyzed and structured thoughtfully to preserve public interests and that managing the partnership 

over the life of the contract is critical to providing the services expected.

Team recommendations for U.S. implementation include convening workshops, developing training 

guidelines, establishing an expert task group, developing a research strategy, and publishing principles 

and guideline documents on PPP topics.

17. Key Words

contract management, infrastructure, key performance indicator, performance measure, procurement, 

public-private partnership, value for money

18. Distribution Statement

No restrictions. This document is available to the public from the:

Office of International Programs,

FHWA-HPIP, Room 3325, U.S. Department of Transportation,

Washington, DC 20590

international@fhwa.dot.gov

www.international.fhwa.dot.gov

19. Security Classify. (of this report)

Unclassified

20. Security Classify. (of this page)

Unclassified

21. No. of Pages

88

22. Price

Free

Form DOT F 1700.7 (8-72) Reproduction of completed page authorized

Technical Report Documentation Page
Acknowledgments

Many contributed to the success of the scan on 

public-private partnerships for highway infrastructure. 

Foremost, the team would like to thank the members of 

the host delegations who gave of their time, experience, 

and knowledge so willingly. Further, their hospitality 

throughout the team’s visits was most appreciated. While 

too numerous to cite here, the individuals the team met 

are listed in Appendix D. In addition, we would like to 

thank those who worked behind the scenes to provide 

logistical support. Special thanks also go to the 

interpreter who expertly translated our interactions 

with some of the Spanish delegation.
Public-Private Partnerships 

for Highway Infrastructure: 

Capitalizing on International 

Experience

Prepared by the International Scanning Study Team:

Janice Weingart Brown 

(cochair)

FHWA

Robert Pieplow (cochair)

California DOT

Roger Driskell

Illinois DOT

Stephen Gaj

FHWA

Michael J. Garvin 

(report facilitator)

Virginia Tech

Dusty Holcombe

Virginia DOT

Michael Saunders

FHWA

Jeffrey Seiders, Jr.

Texas DOT

Arthur Smith

National Council for 

Public-Private Partnerships

for:

Federal Highway 

Administration

U.S. Department of 

Transportation

American Association of State 

Highway and 

Transportation Officials

National Cooperative 

Highway Research Program

March 2009
iv 

International Technology 

Scanning Program

T he International Technology Scanning Program, 

sponsored by the Federal Highway Administration 

(FHWA), the American Association of State 

Highway and Transportation Officials (AASHTO), and the 

National Cooperative Highway Research Program 

(NCHRP), evaluates innovative foreign technologies and 

practices that could significantly benefit U.S. highway 

transportation systems. This approach allows for 

advanced technology to be adapted and put into practice 

much more efficiently without spending scarce research 

funds to re-create advances already developed by other 

countries.

FHWA and AASHTO, with recommendations from 

NCHRP, jointly determine priority topics for teams of U.S. 

experts to study. Teams in the specific areas being investigated are formed and sent to countries where significant 

advances and innovations have been made in technology, 

management practices, organizational structure, program 

delivery, and financing. Scan teams usually include 

representatives from FHWA, State departments of transportation, local governments, transportation trade and 

research groups, the private sector, and academia. 

After a scan is completed, team members evaluate findings 

and develop comprehensive reports, including recommendations for further research and pilot projects to verify the 

value of adapting innovations for U.S. use. Scan reports, as 

well as the results of pilot programs and research, are 

circulated throughout the country to State and local 

transportation officials and the private sector. Since 1990, 

more than 75 international scans have been organized on 

topics such as pavements, bridge construction and maintenance, contracting, intermodal transport, organizational 

management, winter road maintenance, safety, intelligent 

transportation systems, planning, and policy. 

The International Technology Scanning Program has 

resulted in significant improvements and savings in road 

program technologies and practices throughout the 

United States. In some cases, scan studies have facilitated 

joint research and technology-sharing projects with 

international counterparts, further conserving resources 

and advancing the state of the art. Scan studies have 

also exposed transportation professionals to remarkable 

advancements and inspired implementation of hundreds 

of innovations. The result: large savings of research 

dollars and time, as well as significant improvements 

in the Nation’s transportation system.

Scan reports can be obtained through FHWA free of 

charge by e-mailing international@dot.gov. Scan reports 

are also available electronically and can be accessed 

on the FHWA Office of International Programs Web site 

at www.international.fhwa.dot.gov.
International Technology 

Scan Reports

Safety 

Improving Safety and Mobility for Older Road Users in 

Australia and Japan (2008)

Safety Applications of Intelligent Transportation Systems 

in Europe and Japan (2006)

Traffic Incident Response Practices in Europe (2006)

Underground Transportation Systems in Europe: Safety, 

Operations, and Emergency Response (2006)

Roadway Human Factors and Behavioral Safety in Europe 

(2005) 

Traffic Safety Information Systems in Europe and 

Australia (2004) 

Signalized Intersection Safety in Europe (2003)

Managing and Organizing Comprehensive Highway 

Safety in Europe (2003) 

European Road Lighting Technologies (2001) 

Commercial Vehicle Safety, Technology, and Practice in 

Europe (2000) 

Methods and Procedures to Reduce Motorist Delays in 

European Work Zones (2000) 

Innovative Traffic Control Technology and Practice in 

Europe (1999) 

Road Safety Audits—Final Report and Case Studies 

(1997) 

Speed Management and Enforcement Technology: 

Europe and Australia (1996) 

Safety Management Practices in Japan, Australia, and 

New Zealand (1995) 

Pedestrian and Bicycle Safety in England, Germany, and 

the Netherlands (1994) 

Planning and Environment 

Active Travel Management: The Next Step in Congestion 

Management (2007)

Managing Travel Demand: Applying European 

Perspectives to U.S. Practice (2006)

Transportation Asset Management in Australia, Canada, 

England, and New Zealand (2005)

Transportation Performance Measures in Australia, 

Canada, Japan, and New Zealand (2004) 

European Right-of-Way and Utilities Best Practices 

(2002) 

Geometric Design Practices for European Roads (2002) 

Wildlife Habitat Connectivity Across European Highways 

(2002) 

Sustainable Transportation Practices in Europe (2001) 

Recycled Materials in European Highway Environments 

(1999) 

European Intermodal Programs: Planning, Policy, and 

Technology (1999) 

National Travel Surveys (1994) 

Policy and Information 

European Practices in Transportation Workforce 

Development (2003) 

Intelligent Transportation Systems and Winter Operations 

in Japan (2003) 

Emerging Models for Delivering Transportation Programs 

and Services (1999) 

National Travel Surveys (1994) 

Acquiring Highway Transportation Information From 

Abroad (1994) 

International Guide to Highway Transportation 

Information (1994) 

International Contract Administration Techniques for 

Quality Enhancement (1994) 

European Intermodal Programs: Planning, Policy, and 

Technology (1994) 

Operations 

Freight Mobility and Intermodal Connectivity in China 

(2008)

Public-Private Partnerships for Highway Infrastructure: Capitalizing on International Experience v

International Technology

Scanning Program:

Bringing Global Innovations

to U.S. Highways
v i International Technology Scan Reports 

Commercial Motor Vehicle Size and Weight Enforcement 

in Europe (2007)

Active Travel Management: The Next Step in Congestion 

Management (2007)

Managing Travel Demand: Applying European 

Perspectives to U.S. Practice (2006)

Traffic Incident Response Practices in Europe (2006)

Underground Transportation Systems in Europe: Safety, 

Operations, and Emergency Response (2006)

Superior Materials, Advanced Test Methods, and 

Specifications in Europe (2004) 

Freight Transportation: The Latin American Market 

(2003) 

Meeting 21st Century Challenges of System Performance 

Through Better Operations (2003) 

Traveler Information Systems in Europe (2003) 

Freight Transportation: The European Market (2002) 

European Road Lighting Technologies (2001) 

Methods and Procedures to Reduce Motorist Delays in 

European Work Zones (2000) 

Innovative Traffic Control Technology and Practice in 

Europe (1999) 

European Winter Service Technology (1998) 

Traffic Management and Traveler Information Systems 

(1997) 

European Traffic Monitoring (1997) 

Highway/Commercial Vehicle Interaction (1996) 

Winter Maintenance Technology and Practices—

Learning from Abroad (1995) 

Advanced Transportation Technology (1994) 

Snowbreak Forest Book—Highway Snowstorm 

Countermeasure Manual (1990) 

Infrastructure—General 

Public-Private Partnerships for Highway

Infrastructure: Capitalizing on International 

Experience (2009)

Audit Stewardship and Oversight of Large and 

Innovatively Funded Projects in Europe (2006)

Construction Management Practices in Canada and 

Europe (2005) 

European Practices in Transportation Workforce 

Development (2003) 

Contract Administration: Technology and Practice in 

Europe (2002) 

European Road Lighting Technologies (2001) 

Geometric Design Practices for European Roads (2001) 

Geotechnical Engineering Practices in Canada and Europe 

(1999) 

Geotechnology—Soil Nailing (1993) 

Infrastructure—Pavements

Warm-Mix Asphalt: European Practice (2008)

Long-Life Concrete Pavements in Europe and Canada 

(2007)

Quiet Pavement Systems in Europe (2005)

Pavement Preservation Technology in France, 

South Africa, and Australia (2003) 

Recycled Materials in European Highway Environments 

(1999) 

South African Pavement and Other Highway Technologies 

and Practices (1997) 

Highway/Commercial Vehicle Interaction (1996) 

European Concrete Highways (1992) 

European Asphalt Technology (1990) 

Infrastructure—Bridges 

Bridge Evaluation Quality Assurance in Europe (2008)

Prefabricated Bridge Elements and Systems in Japan and 

Europe (2005) 

Bridge Preservation and Maintenance in Europe and 

South Africa (2005) 

Performance of Concrete Segmental and Cable-Stayed 

Bridges in Europe (2001) 

Steel Bridge Fabrication Technologies in Europe and Japan 

(2001) 

European Practices for Bridge Scour and Stream 

Instability Countermeasures (1999) 

Advanced Composites in Bridges in Europe and Japan 

(1997) 

Asian Bridge Structures (1997) 

Bridge Maintenance Coatings (1997) 

Northumberland Strait Crossing Project (1996)

European Bridge Structures (1995) 

All publications are available

on the Internet at 

www.international.fhwa.dot.gov.
Contents

Executive Summary.................................................. 1

Key Learning Points of the Scan.................................... 1

Principal Findings............................................................ 1

Additional Findings ........................................................ 2

Implementation Strategies.............................................. 4

Chapter 1: Introduction............................................. 5

Background....................................................................... 5

Purpose and Scope........................................................... 5

Scan Team.......................................................................... 6

Planning and Approach.................................................. 7

Overview of the Report................................................... 7

Chapter 2: Highway PPP Program 

Characteristics............................................................... 9

PPP Program Origins ...................................................... 9

PPP Program Administration and Management........11

Role of PPPs in National Highway/Roadway

Networks and Recent Activity..................................... 11

PPP Program Evolution................................................ 14

Public Acceptance of PPPs ........................................... 16

Chapter 3: PPP Project Programming 

and Delivery.................................................................. 19

Funding Mechanisms.................................................... 19

Project Analysis and Selection..................................... 20

Risk Allocation and Management............................... 25

Procurement Process ..................................................... 26

Transparency................................................................... 34

Contract Periods............................................................. 36

Contract Documents and Technical Standards......... 36

Contract Change Management.................................... 37

Public Involvement During Commissioning............ 39

Chapter 4: PPP Project Contract 

Management and Operations........................ 41

Performance Measures.................................................. 41

Managing the Partnership............................................ 42

Handback Provisions .................................................... 43

Chapter 5: PPP Program Performance and 

Common Lessons Learned................................ 47

Outcomes......................................................................... 47

Common Lessons Learned........................................... 47

Chapter 6: Principal Findings ............................. 51

General Findings............................................................ 51

Project Life Cycle Findings........................................... 53

Additional Observations .............................................. 54

Chapter 7: Implementation Strategy.......... 57

Short-Term Actions........................................................ 57

Midterm Actions ............................................................ 57

Long-Term Actions ........................................................ 58

Endnotes........................................................................... 59

APPENDIX A: Scan Itinerary..................................... 61

APPENDIX B: Amplifying Questions................. 63

APPENDIX C: Scan Team Members..................... 67

APPENDIX D: Host Country Contacts............... 71

APPENDIX E: Web Sites of Interest.................... 77

Figures

Figure 1. Scan team members at the headquarters of 

Estradas de Portugal, S.A....................................................... 7

Figure 2. Construction of Portugal’s National 

Motorway System ................................................................. 12

Figure 3. Spain’s national investment in transport 

infrastructure, 1995–2007: public investments 

(budgetary) and concessions (nonbudgetary).................. 13

Figure 4. Highways Agency PFI portfolio, 1996 

to date ...................................................................................... 14

Figure 5. Sydney’s orbital roadways.................................. 14

Figure 6. PPP highways in Victoria.................................... 15

Public-Private Partnerships for Highway Infrastructure: Capitalizing on International Experience vii
Figure 7. Queensland’s AirportLink/Northern 

Busway PPP............................................................................ 15

Figure 8. Portugal’s National Motorway System with 

mix of real toll and shadow toll segments ........................ 20

Figure 9. Example of Spain’s preliminary economic 

viability analysis of projects................................................. 22

Figure 10. U.K. Highways Agency investment profile, 

2001–2014 ................................................................................ 23

Figure 11. Illustrative PSC analysis in the United 

Kingdom ................................................................................. 23

Figure 12. Project recommendations from TransApex 

study in Brisbane................................................................... 24

Figure 13. Continuum of procurement processes of 

host countries ......................................................................... 31

Figure 14. Structure of Victoria’s SEITA............................ 32

Figure 15. The M25 orbital roadway surrounding 

London. ................................................................................... 33

Figure 16. Pedestrian bridge, sound wall, and public 

art on EastLink....................................................................... 35

Figure 17. Typical role of independent verifier in PPP 

project ...................................................................................... 43

Figure 18. Traffic volume versus fatalities in 

Portugal................................................................................... 48

Figure 19. Road safety improvement in Portugal: 

1995–2006 ................................................................................ 48

Tables

Table 1. Scan trip details ........................................................6

Table 2. Future transportation investments in Spain: 

budgetary versus nonbudgetary ........................................ 13

Table 3. General risk allocation in Portugal...................... 25

Table 4. General risk allocation in Spain........................... 25

Table 5. General risk allocation in the United 

Kingdom ................................................................................. 25

Table 6. General risk allocation in Australia..................... 25

Table 7. Examples of KPIs in Spain.................................... 41

Table 8. Adjustments to payment mechanism to 

M25 PPP contractor in the United Kingdom.................... 42

Table 9. Basic contract management roles in operations 

period....................................................................................... 44

Table 10. Schedule performance of highway PPPs 

in New South Wales.............................................................. 47

viii Contents
AASHTO American Association of State and Highway Transportation Officials

BOOT build-own-operate-transfer

CPI consumer price index

DBFO design-build-finance-operate

DOT department of transportation

DR department’s representative (United Kingdom)

EOI expressions of interest

EP Estradas de Portugal, S.A.

EU European Union

FHWA Federal Highway Administration

HM Treasury Her Majesty’s Treasury (United Kingdom)

IGT instructions and guidance to tenderers

KPI key performance indicator

NAO National Audit Office (United Kingdom)

NCHRP National Cooperative Highway Research Program

NCPPP National Council for Public-Private Partnerships

NPV net present value

OJEU Official Journal of the European Union

PFI Private Finance Initiative

PIN prior information notice

PSC public sector comparator

PPB provisional preferred bidder (United Kingdom)

PPP public-private partnership

RFP request for proposal

RFQ request for qualification

SEITA Southern and Eastern Integrated Traffic Authority (Victoria, Australia)

STIP scan technology implementation plan

VfM value for money

Abbreviations and Acronyms

Public-Private Partnerships for Highway Infrastructure: Capitalizing on International Experience ix
x
Comprehensive highway public-private 

partnership (PPP) programs are relatively new to 

the United States and not widely used. Limited 

highway funds, unmet needs for new highway capacity, 

interest from private investors, and other factors have led 

to substantial discussion of PPP projects and programs at 

the State and Federal levels and implementation of projects 

in a few leading States. In contrast, some countries have 

extensive and, in some cases, long-term experience with 

infrastructure PPPs, particularly highways. This presents a 

unique opportunity to capitalize on the knowledge and 

experience gained in the international community, where 

tested policies and practices are in place.

A desk study was completed to identify the countries with 

the most potential to provide relevant and current information on PPPs. Subsequently, a team of nine professionals 

representing government, private industry, and academe 

visited Australia, Portugal, Spain, and the United Kingdom 

in June 2008 to collect and evaluate information about PPP 

programs and projects for highway infrastructure. The team 

met with representatives of the public and private sectors 

involved in PPP arrangements. The Federal Highway 

Administration (FHWA) and the American Association of 

State Highway and Transportation Officials (AASHTO) 

jointly sponsored this scan through the National 

Cooperative Highway Research Program (NCHRP).

The purpose of this scan was to (1) examine programs, 

policies, and practices used by other countries that actively 

solicit and involve the private sector in the delivery of 

highway infrastructure; (2) document lessons learned; and 

(3) make implementation recommendations that will 

improve U.S. policy and practice.

For the purposes of this report, a public-private 

partnership is defined as a contract between the public 

and private sectors for the delivery of a project or service 

in which the private partner has responsibility for 

acquiring the majority of the necessary financing.

Key Learning Points of the Scan

The scan team learned a significant amount about 

established PPP programs during its visits with the host 

countries. The team identified several critical points that it 

consistently observed across the nations. These points are 

the salient messages from the scan:

◆ PPPs are an effective strategy for delivering highway 

projects, and they are service arrangements as much 

as financial ones.

◆ Potential PPP projects must be analyzed, selected, 

structured, and procured thoughtfully to preserve 

public interests.

◆ Managing the partnership over the life of the contract 

is critical to providing the services expected and 

maintaining the public-private relationship.

◆ Public sector institutional capacity requires strengthening and continuous improvement for PPP program 

effectiveness.

Principal Findings

The team gained valuable insights about established PPP 

programs during its visits with the host countries. 

Foremost, the relative maturity of the host nation PPP 

programs offered a rich environment for the collection of 

useful and tested information on PPP policies and practices. In many cases, the team received details on secondand even third-generation PPPs. Hence, the degree of 

institutional learning that had occurred was clear. Further, 

the diversity among policies and practices observed also 

provided alternative perspectives of various issues. 

This experience base provided the team with numerous 

findings. The most significant ones are highlighted below 

in two categories: general and project life cycle findings.

General Findings

◆ Highway PPP arrangements, particularly in the 

most mature markets, are not exclusively financial 

transactions; rather, they are the selected project 

delivery strategy based on a value-for-money or 

feasibility analysis. In the majority of the countries 

visited, this perspective was either firmly held or 

gaining traction. In nearly all cases, the government 

determines that a PPP arrangement is the preferred 

method of delivery based on a systematic analysis 

and selection methodology.

◆ PPPs are a critically important and growing 

Executive Summary

Public-Private Partnerships for Highway Infrastructure: Capitalizing on International Experience 1
percentage of the national highway network. 

A moderate percentage of the overall highway and 

roadway networks are under PPP arrangements, but 

the PPP segments are typically critical components of 

the national or regional system for vehicular mobility. 

◆ Highway PPP arrangements do not automatically 

require user fees. The scan team found that various 

sources of funds are used throughout the world—

from exclusively real tolls to a combination of real 

tolls and shadow tolls to exclusively shadow tolls or 

direct-payment mechanisms (often principally 

availability based).

◆ The necessary public sector mindset and skills base 

for successful PPP programs and projects differ 

substantially from those needed for conventional 

practices. All of the public agencies visited 

emphasized the significance of these two points and 

indicated the importance of building public sector 

capacity in PPP program management.

◆ A reasonable balance among technical, commercial, 

and legal conditions and terms in a PPP contract is 

integral to its success. While all highway projects are 

engineering efforts, PPP projects are also long-term 

enterprises. A fundamental difference exists between 

prescribing a highway that an agency wants constructed versus granting a private entity the right to 

operate an enterprise within the bounds of a contract. 

The latter demands establishing equilibrium between 

business and engineering aspects of a highway 

project. 

◆ Public agencies recognize that a PPP arrangement 

is in fact a long-term partnership with the private 

sector founded on a contract. As such, the public 

sector’s contract management team will be the one 

responsible for sustaining this relationship. Doing so 

may require understanding the spirit as well as the 

letter of a contract. 

Project Life Cycle Findings

◆ All public agencies emphasized the importance of 

adequate front-end or preliminary planning for a 

project to fully comprehend its business case and 

potential life-cycle value. This is necessary to 

understand what service a potential asset should 

provide and where value is derived. Such comprehension will undoubtedly influence the remaining 

decisions on project delivery, including whether the 

project is a PPP candidate.

◆ When defining or scoping a PPP project, the 

primary focus should be on identifying and 

conveying the outputs desired without inappropriately compromising existing technical standards. 

Project outputs are what customers focus on: reliable 

travel times, safe travel environment, comfortable 

ride, etc. Thinking first about what customers desire 

rather than developing a prescriptive definition of 

the asset is a major transition in practice. 

◆ Risk analysis and allocation are paramount to PPP 

project success. Certainly, risk allocation is not a new 

concept, but the public agencies with significant PPP 

experience the scan team met with have evolved from 

stressing maximum risk transfer to optimal risk 

allocation in PPP arrangements.

◆ Most countries use an independent verifier or 

reviewer to monitor the design and construction 

phases of a PPP project. The independent verifier 

serves as an objective third party to administer 

(certify pay requests, etc.) and review (check 

compliance with requirements, make onsite visits, 

etc.) the project during design and construction. 

◆ All countries use key performance indicators (KPIs) 

or performance measures in their PPP contracts to 

assess service along with incentives and disincentives to motivate contractor performance. KPIs are 

the means for assessing whether the PPP contractor is 

providing the outputs desired from the asset. 

Contractors are usually rewarded monetarily for 

exceeding performance targets or showing positive 

trends, and they are debited monetarily for missing 

performance targets or showing negative trends.

◆ Effective PPP contract management is vital to 

maintaining the public sector’s risk posture and to 

sustaining a good working relationship with the 

PPP contractor. The public agency’s contract manager 

must understand the line between risk liability and 

risk transfer when interacting with the PPP contractor 

on issues. Further, the contract manager must 

recognize that the PPP contractor is likely his or her 

counterpart for the better part of 30 years or more, 

so keeping the bigger picture in perspective is more 

important than a petty disagreement or discrepancy.

Additional Findings

Beyond the principal findings, the team made other 

important observations: 

◆ Public agencies in the host countries have faced or 

continue to face challenges similar to those in the 

2 Executive Summary
United States when it comes to providing 

serviceable highways and roadways. Not a single 

public agency indicated that it had a surplus of 

funds available for expansion, restoration, and 

preservation of its highway assets.

◆ Significant institutional learning, in both the public 

and private sectors, has occurred in the countries 

visited over roughly the last decade. Most PPP 

programs in the countries visited began in response 

to fiscal crises, and the early PPP arrangements in 

these countries, while well intentioned, did not 

necessarily provide the best value for the public. 

Since that time, the planning, procurement, and 

management of PPP projects have improved 

substantially.

◆ The maximum contract period (or concession 

period) for road or highway contracts observed was 

50 years, and most periods ranged from 30 to 40 

years. This is a contrast to several recent lease agreements of existing assets with periods ranging from 

75 to 99 years coupled with large upfront payments 

in the United States. None of the countries visited 

have implemented a model of this sort recently.

◆ All public agencies indicated that PPP arrangements 

can allow the delivery of projects sooner than 

would be possible through their other delivery 

methods. This is a common refrain among agencies 

with significant PPP experience.

◆ One man’s BOOT (build-own-operate-transfer) is 

another’s DBFO (design-build-finance-operate). 

The definitions, acronyms, and nomenclature used 

worldwide for PPPs are far from standard.

◆ Innovation by the private and public sectors in PPP 

arrangements is evident. In the case of the private 

sector, innovation is typically stimulated by competition for the award of an integrated, commercial 

enterprise. In the case of the public sector, innovation 

is typically driven by stewardship of public interests.

◆ In general, the representatives of the PPP 

contractors the scan team met with exhibited a 

focus on their customers, an emphasis on life-cycle 

management and value, and a pride in ownership 

and stewardship of their assets. The comments and 

answers of the private participants visited demonstrated to the team members that their business 

model depends on these attributes.

◆ The two most commonly cited attributes of a project 

that potentially make it a PPP candidate were scale 

and complexity. The scale attribute is necessary to 

offset the transaction costs of PPPs, while complexity 

is generally seen as the ingredient that enables or 

perhaps compels the private sector to find novel or 

unique project solutions.

◆ All public agencies emphasized the need for 

transparency during the procurement process for 

PPP projects. The typical scale and complexity of 

PPP highway projects generate an unusually high 

level of public, political, and media attention. Nearly 

all of the agencies visited go to substantial lengths to 

make project documents and records accessible. In 

addition, some agencies use a public auditor to 

monitor proceedings.

◆ The commitment of the government to see PPP 

project procurements through to closure is essential 

to stability within this market. Given the enormous 

transaction costs involved in PPP projects, private 

participants must have confidence that the public 

sector is committed to closing deals expeditiously 

with rare exceptions.

◆ In many of the countries visited, the PPP project 

development time was remarkably efficient. In 

some countries, the entire procurement process, 

from circulation of an environmental document to 

attainment of financial close, averaged 12 months.

◆ Multiple public agencies claimed that PPP projects 

provide better price and time certainty on design 

and construction when compared to the conventional approach. Several of the countries visited 

indicated that the scale and complexity of and 

competition for PPP contracts generally lead to 

design and construction efficiencies, which result in 

better pricing and scheduling by the private sector.

◆ Practices for managing changes and uncertainty 

throughout the contract period vary and range from 

rebalancing actions to limited material adverse 

effect impacts. Rebalancing is a significant modification process, but one that is intended to be applied 

symmetrically. The conditions can be modified in 

either the public or private sector’s favor. Similarly, 

material adverse effect changes can be quite arduous, 

but in the countries where this approach is taken, the 

public agencies have evolved to substantially limit 

the triggers of such provisions.

◆ Handback provisions appear to necessitate good 

asset management practices by the private sector, 

but the handback process is generally untested in 

the countries visited. Typically, the handback 

provisions specify residual service lives for the 

Public-Private Partnerships for Highway Infrastructure: Capitalizing on International Experience 3
different elements of the facility, such as pavements, 

at the end of the contract’s term.

Implementation Strategies

After some discussion, the team agreed that this scanning 

study and its implementation strategies should facilitate 

the pervasive use of a project development process by 

State and local highway agencies that selects an effective 

project delivery system from a range of options that 

includes PPPs. An effective project delivery system is 

defined as one that provides the greatest benefits to 

society and meets government objectives.

The recommendations and implementation actions that 

follow are geared toward this end.

Short-Term Actions

1. Convene executive workshops at which representatives from countries visited or elsewhere speak 

directly to public and private sector decisionmakers. 

Providing information to both decisionmakers 

(executives) and those implementing the programs 

(directors or staff members) will benefit State 

departments of transportation (DOTs). 

2. Develop training guidelines for PPP program 

managers, procurement officers, contract managers, 

and financial and legal specialists that State DOTs can 

use to tailor development and training programs to 

their specific needs.

3. Encourage FHWA to convert the scan team into an 

expert task group to implement scan findings.

4. Encourage AASHTO to establish a group focused on 

PPPs, perhaps as a section of one of its subcommittees. 

Implementation of this recommendation will allow the 

discussion on the development of PPPs to stay active 

and involve stakeholders at all levels of AASHTO, 

State DOTs, and FHWA. 

5. Create a set of state-of-the-practice publications that 

further highlight the lessons learned from the scanning study and possibly expand the scope of inquiry 

to include other nations not studied. Issues such as 

business case development and analysis, value-formoney and risk analysis, procurement processes, 

contract provisions, and change management are all 

important topics for these publications to address.

6. Develop comparative case studies of representative 

projects, past and current, that highlight maturing and 

evolving policies and practices. For instance, the 

Victoria government has developed two projects, 

CityLink and EastLink. An indepth review of the 

project specifics, lessons learned, procurement 

changes, and program evolution would meet one 

of the principal objectives of the scanning study.

Midterm Actions

7. Develop a strategy to facilitate research in the 

following areas:

a. Investigate advantages and disadvantages of 

alternative organizational forms for PPP divisions.

b. Examine methods for identifying and analyzing 

candidate PPP projects.

c. Investigate the evolution and effectiveness of 

KPIs.

d. Investigate the risk mitigation practices of the 

private sector in PPP arrangements to determine if 

private participants assume real levels of risk.

e. Investigate the determinants of concession length, 

both domestically and abroad.

f. Evaluate methodologies for establishing and 

managing toll structures.

g. Investigate and identify appropriate metrics for 

assessing benefits and costs of PPP programs and 

projects and overall PPP program and project 

performance.

Long-Term Actions

8. Develop and publish principles and guideline documents that update or complement existing documents 

that are similar in nature, such as the following:

a. Establishing a PPP program

b. Identifying and evaluating candidate PPP projects

c. Procuring PPP projects

d. Creating PPP contracts

e. Managing PPP contracts

f. Measuring PPP program and project performance

4 Executive Summary
CHAPTER 1 »

Introduction

Background

Comprehensive highway public-private partnership 

(PPP) programs are relatively new to the United 

States and not widely used. Limited highway 

funds, unmet needs for new highway capacity, interest 

from private investors, and other factors have led to 

substantial discussion of PPP projects and programs at the 

State and Federal levels and implementation of projects in 

a few leading States. In contrast, some countries have 

extensive and, in some cases, long-term experience with 

infrastructure PPPs, particularly highways. In fact, some 

public agencies have completed long-term concession 

agreements and the facilities have been returned to the 

public agency after many years of private operation.

Many international public agencies also have multiple 

PPP arrangements that have been in place for more than 

a decade. Furthermore, they continue to invite the private 

sector to compete for the opportunity to develop, finance, 

operate, and maintain public facilities for terms ranging 

from 30 to 50 years. Agencies need a fuller understanding 

of the factors that led to successful implementation of 

PPPs in other parts of the world before exploring the 

success factors in any individual agreement. This 

includes an exploration of preceding conditions and 

public expectations, philosophical perspectives on the 

role of the private sector, the original rationale for 

implementing PPPs, and issues that need to be confronted, including public acceptance. 

With this understanding, the lessons learned in the procurement and contracting process can be put in the proper 

context and the issues can be better framed for application 

in the United States. A successful PPP will include appropriate performance measures for the maintenance and 

condition of physical infrastructure and the transportation 

of people and products through the facility, as well as 

management of user charges and rates, where applicable.

Equally important are effective mechanisms to update an 

agreement to accommodate the future demands on a 

facility, as well as any conditions deemed significantly 

different from those at the time of an agreement. Finally, 

what are the metrics for measuring success? Current U.S. 

practice and experience do not provide a wealth of 

knowledge in any of these areas.

Purpose and Scope

Accordingly, the purpose of this scanning study was to 

(1) examine programs, policies, and practices used by 

other countries that actively solicit and involve the 

private sector in the delivery of highway infrastructure; 

(2) document lessons learned; and (3) make implementation recommendations that will improve U.S. policy and 

practice. Further, this scan represented an opportunity to 

collect information from public agencies administering 

mature agreements with private contractors developing 

and operating public roads.

For the purposes of this report, a public-private partnership 

is defined as a contract between the public and private 

sectors for the delivery of a project in which the private 

partner has the responsibility for acquiring the majority of 

the necessary financing. This characterization of PPPs is the 

result of the information provided by the host nations 

during the scanning study. The preliminary information 

sent to the host nations before the trip did not define PPPs; 

rather, the countries visited described program aspects and 

project examples that prompted this definition. 

The scope of the investigation involved sending a team 

from the United States to Australia, Portugal, Spain, and 

the United Kingdom to collect and evaluate information 

about PPP programs and projects for highway infrastructure. The team met with representatives of the public 

and private sectors involved in PPP arrangements, as 

illustrated in table 1 (see next page). Most information 

exchange occurred during presentations by host agencies 

or private sector representatives, but roundtable discussions, social events, and site visits also provided 

opportunities for information collection.

Within each country, PPPs play an important role in 

facilitating national and regional mobility. Each country 

Public-Private Partnerships for Highway Infrastructure: Capitalizing on International Experience 5
6 Chapter 1» Introduction

also has a relatively mature PPP program for highway and 

road infrastructure. While PPP strategies, policies, and 

practices across the countries were similar in many 

respects, significant differences in several areas were 

identified. This variety is beneficial to the scan’s objectives 

because it provides a broader spectrum of perspectives for 

consideration as the PPP market in the United States 

continues to evolve.

At this stage, one cannot conclude whether one particular 

policy or practice is better than another. In fact, such 

conclusions may be impossible to reach, given the 

complex sociopolitical environment in which highway 

infrastructure resides. But differing approaches should 

give both policymakers and decisionmakers the opportunity to appraise their advantages and disadvantages and 

determine if implementation resolves a need and is in the 

public’s interest.

Scan Team

The team assembled to fulfill the objectives of the PPP 

scan included representatives from the Federal Highway 

Administration (FHWA); American Association of State 

Highway and Transportation Officials (AASHTO); 

Location Meetings With Organizations Site Visits

Lisbon, Portugal Estradas de Portugal, S.A.5

Brisa2

Brisa Traffic Control Center

Madrid, Spain Polytechnic University of Madrid3

Communidad de Madrid1

Madrid Calle-302

Madrid Centro Financiero4

Ministerio de Fomento1

Calle-30 Highway

M-45

M-12

London, United Kingdom Highways Agency1

Department of Transport1

None

Sydney, Australia Roads and Traffic Authority, New South 

Wales1

Treasury, New South Wales1

Infrastructure Insight2

Infrastructure Partnerships Australia4

Leighton Contractors2

Allens Arthur Robinson2

Macquarie Capital Advisers2

Parsons Brinckerhoff2

Thiess2

Transurban2

Cross City Tunnel

Sydney Harbour Tunnel

Lane Cove Tunnel

M-2 Motorway

Melbourne, Australia VicRoads, Victoria1

Partnerships Victoria, Department of 

Treasury and Finance1

East-West Transport Link1

Southern and Eastern Integrated Transport 

Authority1

Transurban2

CityLink Motorway

EastLink Motorway

Brisbane, Australia Main Roads, Queensland1

Infrastructure and Planning, Queensland1

AirportLink/Northern Busway1

North-South Bypass Tunnel

1

government or public agency, 2private company/concessionaire, 3university, 4professional or trade organization, 5state-owned 

enterprise/concessionaire

Table 1. Scan trip details.
Public-Private Partnerships for Highway Infrastructure: Capitalizing on International Experience 7

National Council for Public-Private Partnerships 

(NCPPP); State departments of transportation (DOTs) 

in California, Illinois, Texas, and Virginia; and Virginia 

Polytechnic Institute and State University (Virginia Tech). 

This group represented a diverse set of interests and 

expertise in the areas of asset management, contract 

administration, engineering, procurement, program 

management, and policy. The following were 

members of the team:

Planning and Approach

The proposal for a PPP scan was evaluated and selected 

by a group made up of FHWA representatives and 

National Cooperative Highway Research Program 

(NCHRP) Project Panel 20-36 members. After scan team 

members were selected, a desk study was completed to 

identify candidate countries for the scanning study. The 

desk study involved literature reviews, expert interviews, 

and synthesis. Based on the desk study, the team selected 

the most appropriate and promising countries to visit.

Subsequently, the team prepared a panel overview 

document, which was sent to the host countries to prepare 

them for the U.S. delegation. The panel overview 

explained the background and scope of the study, its 

sponsorship, team composition, topics of interest, and 

tentative itinerary.

Before conducting the scanning study, the team prepared 

a comprehensive set of amplifying questions to further 

describe and refine the panel overview document. 

Development of the amplifying questions was an 

iterative process, and the questions were designed to 

acquire information relevant to the scan’s objectives 

while remaining general enough to capture unanticipated 

data the host nations might provide. Appendix B lists 

the scan’s amplifying questions.

Overview of the Report

The subsequent chapters cover the following:

◆ Chapter 2 describes basic characteristics of the PPP 

programs in the nations visited, including the origins, 

role, structure, evolution, and public acceptance of 

these programs. It provides a foundation for the more 

detailed discussions that follow.

◆ Chapter 3 discusses the project programming and 

delivery processes observed. It gives an overview of 

how a PPP project moves from project identification 

and selection to commissioning.

◆ Chapter 4 describes PPP project operations and 

contract management. In many respects, these aspects 

are the keys to success since these arrangements are 

long-term relationships between the public and 

private sectors.

Figure 1. Scan team members at the headquarters

of Estradas de Portugal, S.A.

Janice Weingart Brown 

(FHWA cochair)

Division Administrator

FHWA Texas Division

Robert Pieplow 

(AASHTO cochair)

Chief, Division of 

 Engineering Services

California DOT

Roger Driskell

Deputy Director, 

 Region 4 Engineer

Illinois DOT

Stephen Gaj

Leader, System 

 Management and 

 Monitoring Team

FHWA Office of Asset 

 Management

Michael J. Garvin

(report facilitator)

Associate Professor

Virginia Tech

Dusty Holcombe

Assistant Director, 

 Innovative Project 

 Delivery

Virginia DOT

Michael Saunders

Program Manager, 

 PPP Program

FHWA 

Jeff Seiders, Jr.

Director, Material and 

 Pavements Section

Texas DOT

Art Smith

Chairman

NCPPP
8 Chapter 1» Introduction

◆ Chapter 5 discusses PPP program performance and 

key lessons learned from the perspective of the host 

nations.

◆ Chapter 6 presents the team’s 26 principal findings 

from the scanning study.

◆ Chapter 7 explains the proposed implementation 

strategy, which is vital to ensuring that the 

information acquired from the scan as well as 

subsequent proposed efforts are transferred 

into U.S. highway policy and practice. 
I

n the countries the scan team studied, highway PPPs 

play a pivotal role in enabling national and regional 

mobility, and the team observed both similarities and 

differences in PPP philosophies, policies, and practices. 

While conclusions on the relative merits of one policy or 

practice over another are premature, the team obtained 

a rich spectrum of information for consideration.

This chapter provides a basic overview of the host nation 

PPP programs, including their origins, role, structure, 

evolution, and public acceptance. Accordingly, it 

provides a foundation for the more detailed discussions 

in subsequent chapters. 

PPP Program Origins

Portugal

In 1972, the first concession for a tolled motorway was 

granted with the creation of the private company Brisa. 

Following the 1974 Carnation Revolution, however, the 

government took majority ownership of Brisa, effectively 

making it a state-owned enterprise. Until the 1990s, Brisa 

was the sole motorway concessionaire in Portugal. During 

this decade, the Portuguese government decided to 

privatize Brisa and increase the number of private companies participating in highway infrastructure concessions to 

promote competition and industry development.(a)

Since then, the Portuguese government has used PPPs 

extensively to develop and manage its National Motorway 

System. A key driver of the decision to implement PPP 

arrangements in earnest was compliance with European 

Union (EU) convergence criteria, which places limits on 

public debt and budget deficits.1

 This pressure makes the 

use of PPPs, in which the private partner assumes real risk, 

quite attractive because its associated debt is moved off the 

public sector’s balance sheet. Other drivers cited include 

the following:

◆ Make public funds available for investment in other 

areas.

◆ Facilitate execution of the National Road Plan.

◆ Improve public safety.

◆ Increase private sector capacity and competition.

Spain

Private sector involvement in developing and managing 

highway infrastructure in Spain dates to 1960. At that time, 

the concession for the Guadarrama Tunnel was granted, 

based on legislation passed in 1953 allowing private 

entities to construct tollways for a maximum term of 75 

years. New legislation was passed in 1960 to grant the 

public sector more flexibility in concession arrangements 

to improve their attractiveness to the private sector. Two 

concessions were quickly granted under this framework: 

the Cádiz Bay Bridge, toll-free since 1982, and the Cadí 

Tunnel, now operated by the Autonomous Community of 

Catalonia.(b) In 1964, Spain developed a plan for a National 

Expressway System, which projected the construction of 

about 3,000 kilometers (km) (1,864 miles (mi)) of 

expressways by 1980. Subsequently, several concessions 

were established to begin development of this system. To 

facilitate rapid construction, specific legislation was passed 

Public-Private Partnerships for Highway Infrastructure: Capitalizing on International Experience 9

CHAPTER 2 »

Highway PPP Program Characteristics

1Convergence criteria are the criteria for European Union member states to enter the third stage of European Economic and Monetary 

Union (EMU) and adopt the euro. The four main criteria are based on Article 121(1) of the European Community Treaty. Member countries that adopt the euro need to meet four criteria: (1) Inflation rate: The inflation rate must be no more than 1.5 percentage points 

higher than the three lowest inflation member states of the EU. (2) Government finance: The ratio of the annual government deficit to 

gross domestic product (GDP) must not exceed 3 percent at the end of the preceding fiscal year. If not, it is at least required to reach a 

level close to 3 percent. Only exceptional and temporary excesses are permitted. The ratio of gross government debt to GDP must not 

exceed 60 percent at the end of the preceding fiscal year. Even if the target cannot be achieved because of specific conditions, the ratio 

must have sufficiently diminished and must be approaching the reference value at a satisfactory pace. (3) Exchange rate: Applicant 

countries should have joined the exchange-rate mechanism (ERM II) under the European Monetary System (EMS) for 2 consecutive 

years and should not have devalued their currency during the period. (4) Long-term interest rates: The nominal long-term interest rate 

must not be more than 2 percentage points higher than in the three lowest inflation member states.
10 Chapter 2» Highway PPP Program Characteristics

for each concession, and in many cases, beneficial terms 

were granted to the private developers.(b)

In 1972, Spain recognized the need for a general legal and 

regulatory framework to serve as the foundation for future 

concession arrangements. Building on its own experience 

as well as that of other countries, Spain passed Law 8/1972 

to provide this basis. It served this purpose until 2003, 

when Law 13/2003 modified the original framework to 

accommodate contemporary circumstances and practices 

such as the clarification of the allocation of concession 

risks. Law 30/2007 was also enacted recently to address 

all public sector contracts, but it has a section for contracts 

for public works concessions.

Similar to Portugal, the resurgence of PPP activity in 

Spain is driven by EU convergence criteria. The other 

principal driver cited was that the nation’s infrastructure 

requirements exceed its public funding capacity. One 

public official’s opinion on PPPs is that these arrangements are primarily tools to develop infrastructure, and 

the approach is no better or worse than any other.

United Kingdom

Increased private participation in infrastructure provision 

and management began in the United Kingdom in the 

1980s. The momentum from this decade continued into 

the following one when in 1992 the national government 

began the Private Finance Initiative (PFI). Her Majesty’s 

(HM) Treasury issued and has administered the policy 

since its inception. To some, the terms PFI and PPP are 

synonymous. PFI, however, is a specific U.K. policy to 

increase private participation in infrastructure financing 

and provision, which obviously generated various PFI 

programs in the United Kingdom. Total PFI activity to 

date approaches £60 billion. The first three highway PPPs 

were concession arrangements—Queen Elizabeth II 

Bridge, Second Severn Crossing, and M6 Toll—with real 

tolls used to secure the private financing. Beginning in 

1996, new PPP contracts eliminated real tolls and made 

road use free at the point of use to drivers. Consequently, 

PPP contractors have secured financing for capital costs 

while the government has paid PPP contractor service 

charges from budgetary funds.

Original drivers of the PFI policy include the following:

◆ An infrastructure deficit, created by years of 

underinvestment, which exceeded available 

public sector funding

◆ Dissatisfaction with the results of conventional 

construction contracts (cost overruns, schedule 

slippage, high asset life-cycle costs)

◆ Desire to transfer more of the risk to the private sector

◆ Desire to get better value for public sector 

expenditures

Unlike Portugal and Spain, the United Kingdom is not 

part of the Eurozone, so it is not bound to meet EU 

convergence criteria. Thus, the pressure to move

liabilities off the public sector balance sheet is a less 

urgent issue.

Australia

In contrast to Portugal, Spain, and the United Kingdom, 

where PPP policies and programs are pushed from the 

national level, PPP activity in Australia has occurred 

primarily in three states: New South Wales, Victoria, 

and Queensland. Each state has used highway PPP 

arrangements almost exclusively to address mobility 

issues in their respective major urban centers of Sydney, 

Melbourne, and Brisbane. Moreover, these states have 

used PPPs rather selectively to facilitate the development 

of major segments of highway infrastructure in these 

urban areas.

New South Wales was Australia’s first mover in the 

highways sector in the early 1990s. At that time, its motivations for PPPs were public sector budgetary constraints 

and a desire for direct pricing of road use as well as the 

potential to implement congestion pricing.(c) In 1995 the 

state government enacted the General Government Debt 

Elimination Act and subsequently the Fiscal Responsibility 

Act of 2005. These acts established principles of financial 

management and specified that the state maintain debt 

levels at certain thresholds. Consequently, they created an 

aversion to public debt in the government.(d) Further, the 

general debt stabilization policy influenced financing 

decisions on projects such as the Cross City Tunnel, where 

a no-net-cost-to-government philosophy was pursued.(d)

In addition, the notion of transferring significant risks to 

the private sector was gaining traction, as well as the belief 

that market risks and rewards, in particular, provided the 

private sector the incentive to deliver projects as soon as 

possible.

Victoria began its highway PPP program on the heels 

of New South Wales when it called for expressions of 

interest from the private sector to develop and finance a 

new north-south connector highway in Melbourne in 
Public-Private Partnerships for Highway Infrastructure: Capitalizing on International Experience 11

1992. Unlike New South Wales, Victoria needed special 

legislation to enable this PPP. In 1995, Victoria passed

the Melbourne City Link Act authorizing the PPP 

arrangement. During this period, one of the overriding 

concerns was limiting public debt burdens, so PPPs

were viewed as a vehicle to this end. In addition, a 

general belief existed that private sector involvement 

could drive growth and efficiency, and the PPP

model provided a means to price risks allocated

to the private sector.

Queensland did not develop a state-driven PPP 

arrangement until 2006, when it initiated the procurement process for the AirportLink and Northern Busway 

project. The Brisbane City Council, however, began 

procurement of the North-South Bypass Tunnel in 2005. 

Since both PPPs were initiated more than a decade after 

the first highway PPPs in Australia, Queensland was able 

to capitalize on the experience of other states to more 

effectively implement these arrangements. 

PPP Program Administration and 

Management

The public entities charged with administering and 

managing highway PPPs are structured differently among 

the host nations. The organizations that manage PPP 

programs range from traditional highway agencies to 

state-owned enterprises.

Portugal

Estradas de Portugal, S.A. (EP) has responsibility for 

oversight and development of the national highway 

network. EP was formed in 2005 as a state-owned enterprise, and it holds a 75-year concession with the national 

government to manage and develop the national highway 

system. In other words, EP will execute future PPP agreements on behalf of the Portuguese government and 

ultimately all assets under existing PPP contracts will 

transfer to EP when the existing contracts expire. EP is the 

successor to three agencies formed in 1999: Instituto das 

Estradas de Portugal (IEP), Instituto para a Construção 

Rodoviária (ICOR), and Instituto para a Conservação e 

Exploração da Rede Rodoviária (ICERR) that replaced 

Junta Autónoma das Estradas (JAE), which existed from 

1927 to 1999. Its conversion from three public agencies to a 

state-owned enterprise was driven largely by the need to 

move government debts off the national balance sheet so 

the Portuguese government could remain in compliance 

with EU budgetary standards.

Spain

The Spanish highway system is managed by the director 

general of roads, who reports to the secretary general for 

transportation in the Ministerio de Fomento (or Department of Development), so no distinct national highways 

agency or department exists. The director general has 

oversight of the national PPP program. Autonomous 

communities also have their own roadway agencies. The 

government delegate, who works on behalf of the Ministry 

of Public Works, plays a key role in administering and 

managing individual PPP contracts.

United Kingdom

The Highways Agency is a unit of the Department for 

Transport and manages the English strategic road 

network. It has sole responsibility for the national 

motorway PFI (or PPP) program. Similar to Spain, the 

department’s representative plays a pivotal role in 

administering and managing individual PPP contracts.

Australia

The administration and management approaches adopted 

by the three active states differ slightly. In New South 

Wales, the Roads and Traffic Authority (RTA) has oversight of its highway system as well as its PPP program. In 

Victoria, the state has created temporary public authorities 

for the sole purpose of managing the procurement of its 

highway PPP projects. Once operational, the public 

authorities are disbanded and the responsibility for 

contract administration and management is handled by 

VicRoads, the state’s highway agency. In Queensland, the 

state has followed the model in Victoria for the procurement of AirportLink, creating an independent authority 

for this purpose. The state’s Department of Main Roads 

will ultimately assume responsibility for its contract 

management.

Role of PPPs in National Highway/

Roadway Networks and Recent Activity

Across the host nations, PPP arrangements are a small-tomodest portion of the total roadway network. In all of the 

host nations, however, PPPs have played a key role in the 

development and management of critical highway 

corridors.

Portugal

Portugal has about 16,500 km (10,253 mi) of total roadways, but PPP concessions are fundamental to its National 

Motorway System. Figure 2 illustrates the pace of 
12 Chapter 2» Highway PPP Program Characteristics

development of this system, with the majority of the 

activity since 2000 being done under PPP arrangements. 

The planned motorway system will ultimately be 3,300 km 

(2,050 mi). Currently, 2,660 km (1,653 mi) of the motorway 

system is operational, of which 2,500 km (1,553 mi) or 94 

percent is under a PPP arrangement. While only 15 percent 

of Portugal’s current total roadways are PPPs, these 

arrangements are certainly focused on the nation’s strategic surface mobility corridors. PPP arrangements are used 

exclusively by the national government.

Spain

While the total roadway network covers more than 

30,000 km (24,600 mi), the National Highway System is 

about 16,000 km (9,942 mi). Of this total, 4,300 km (2,672 

mi) or 27 percent is under a PPP arrangement. An 

additional 1,500 km (932 mi) of network enhancements 

and upgrades are under construction through PPP 

contracts, which will increase the percentage of the 

National Highway System under PPPs to 33 percent. 

PPPs are also used by Spain’s Autonomous Communities 

(Communidad). While the 

national government does 

not initiate these arrangements, it may lend funding 

and management assistance 

to the autonomous 

jurisdictions.

Since 2000, the level of 

investment in roads, 

airports, railways, and ports 

via concessions has risen to 

roughly 20 percent of total 

transport investment, as 

depicted in figure 3. 

The vast majority of the 

concessions during this 

period were for roads. In the 

future, Spain expects to 

continue this approach to 

transport financing, as 

shown in table 2.

United Kingdom

The National Motorway 

System is comprised of 7,100 

km (4,412 mi). This system 

constitutes only 3 percent of 

the total roadways in the 

United Kingdom, but carries 

33 percent of all traffic and 

62 percent of freight. 

Compared to PPP activity in 

other sectors, PPP highway 

activity has been relatively 

modest. Figure 4 (see page 

14) shows cumulative PPP 

investment since 1996 

is near £4 billion. 

0

500

1000

1500

2000

2500

3000

Annual Opening to Traffic

1985

12

0 3

38

1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007

0

50

100

150

200

250

300

35

60 56

158

52

87

39 

224

128

273

46 54

174 180

96

177

265

216

73

Cumulative Motorway Network

till 1985

222

• 260

•

1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007

516

• 623

•

935

•

1101

•

1428

•

1648

•

2365

• 2004

•

2654

•

298

•

km km

Figure 2. Construction of Portugal’s National Motorway System.
Public-Private Partnerships for Highway Infrastructure: Capitalizing on International Experience 13

Still, 10 percent of the National Motorway System is 

managed under PPP arrangements. The United Kingdom, 

however, is in the final stages of procuring its largest PPP 

project to date, the M25. Once closed, this will place 

17 percent of the national system under PPPs. Local 

jurisdictions and the Department of Transport also 

have the authority to execute PPP arrangements, 

and both have exercised this authority.

Australia

Unlike the other countries visited, nearly 

all highway PPP activity in Australia has occurred 

at the state or municipal level and primarily 

in three states: New South Wales, Victoria, 

and Queensland. PPP arrangements are 

under consideration at the national level for 

development and enhancement of the 

interstate motorway system, but projects 

have yet to be solicited. 

New South Wales has more than 20,000 

km (12,427 mi) of state roadways and regional 

and local roads. It entered into its first 

arrangement via an unsolicited proposal 

for the Sydney Harbour Tunnel, which 

opened for service in August 

1992.2

 Subsequently, the state 

has used seven additional PPP 

contracts to complete the orbital 

(perimeter or ring road) around 

Sydney, the most recent being 

three projects delivered in a 

5-year period: the Cross City 

Tunnel, the M7 Motorway, and 

the Lane Cove Tunnel (see 

figure 5 on next page). In total, 

108 km (67 mi) of state highway, 

or less than 1 percent of the total 

state network, are under PPP 

contracts. 

Victoria has a network of 

more than 22,000 km (13,670 mi) 

of metropolitan and rural 

arterial roads, and only two 

highway PPP contracts. The 

first, a 22-km (14-mile) highway 

named CityLink, opened in 2000 to provide a north-south 

connection to Melbourne’s central business district and 

airport. The second, a 40-km (25-mile) highway named 

EastLink, opened in 2008 to provide another north-south 

connection on the eastern fringe of Melbourne. Both are 

illustrated in figure 6 (see page 15). Combined, these 

arrangements are also less than 1 percent of the total 

state network.

Queensland has more than 33,500 km (20,816 mi) 

of state-controlled roads, but only two PPP contracts. 

The first, the North-South Bypass Tunnel, was an 

Figure 3. Spain’s national investment in transport infrastructure, 1995-2007: 

public investments (budgetary) and concessions (nonbudgetary).

Million

€

Public Procurement Concessions

Investment in the 4 modes of transport:

Ministry of Fomento of Spain Period 1995-07

0

2.000

4.000

6.000

8.000

10.000

12.000

14.000

16.000

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007(pro)

Table 2. Future transportation investments in Spain:

budgetary versus nonbudgetary.

2

 No other unsolicited highway proposals have been developed in Australia.

Mode Budgetary Nonbudgetary Percent of Total

Roads 75.0% 25.0% 26.8%

Railways 81.4% 18.6% 48.0%

Airports 2.2% 97.8% 6.5%

Ports 9.7% 90.3% 9.7%

Other 27.7% 72.3% 9.0%

Percentage of Total 59.5% 40.5% 100%
14 Chapter 2» Highway PPP Program Characteristics

arrangement brokered by the Brisbane Municipal Council 

to provide another crossing of the Brisbane River. This 

6.8-km (4.2-mi) tunnel is under construction. The 

second is a state project, AirportLink/Northern Busway 

(illustrated in figure 7), a multifaceted $4.6 billion 

connection between downtown Brisbane and the airport. 

The preferred bidder was selected in May 2008 and 

financial close was achieved in July.

PPP Program Evolution

Each of the PPP programs has evolved since it began. 

While institutional learning has certainly occurred by 

experience, it has also come via external and internal 

scrutiny of the programs. Hence, the program changes 

have not manifested themselves just through the adjustments in organizational practices that occur naturally as 

familiarity with conditions and circumstances increases, 

but also through modifications to 

law and policy.

For instance, Spain’s Law 13/2003, 

passed in May 2003, was established 

to reinforce private financing of public 

facilities and to improve the legal 

framework by defining a new risksharing approach, particularly for the 

risks involved in estimating traffic 

demand.(e) This law, among other things, 

established the principle of recalibrating 

the economic terms of the PPP contract. 

The law “specifies which events may 

cause the modification of the economic 

terms of the contract in order to 

rebalance the financial terms of the 

Figure 5. Sydney’s orbital roadways. concession. Consequently, the bidders 

Figure 4. Highways Agency PFI portfolio, 1996 to date.

Highways Agency PFI Portfolio

A69

A417/419

A1M

M1/A1

A19

M40

A30

A50

M6 Toll

NTCC

A1DtoD

A249

NRTS

M25

0

0.5

1

1.5

2.0

2.5

3.0

3.5

4.0

Capital value £ billions

1996 Contract

01 03 04 05 06 12

Scheme

Cumulative
Public-Private Partnerships for Highway Infrastructure: Capitalizing on International Experience 15

know, at the time of preparing their offers, 

which specific cases may lead to changes 

in the contract conditions initially stated.”(e)

This is a significant shift in how uncertainties 

throughout the project life cycle are 

managed, especially the traffic demand 

risk that can be challenging to forecast 

for a new toll road.

The United Kingdom’s PFI has been the 

subject of tremendous scrutiny by its 

National Audit Office (NAO) and Parliament. The first of 50 NAO reports on PFI was 

issued in 1998. While this report concluded 

that value for money (VfM) through PFI 

projects was being achieved, it also found 

grounds for improvement in risk allocation, 

contract provisions, etc. With time, the 

United Kingdom has implemented a variety 

of changes designed to improve its PPP 

program. A standard PFI contract is now used, and 

approval is required if contract deviations are sought. 

National employment legislation exists to protect public 

employees if an existing asset or service is transferred 

by contract to a private provider or operator. In effect, 

they must receive a comparable opportunity and 

benefits with the private service provider. Finally, 

contract modifications over such long-term agreements 

are inevitable as standards and expectations change, so 

current and future contracts provide more flexibility to 

negotiate changes. The Highways Agency, in particular, 

has learned that it makes sense to revisit contracts more 

frequently to assess potential changes rather than allow 

changes to accumulate and attempt to negotiate a

major modification.

Similarly, New South Wales adopted new policies 

following external scrutiny. Public reaction to the 

opening of the Cross City Tunnel in 2005 prompted a 

Review of the Future Provision of Motorways in New South 

Wales by the Infrastructure Implementation Group of the 

Premier’s Department (commonly referred to as the 

“Richmond Report”). The report examined seven prior 

PPP motorway projects in the Sydney metropolitan area. 

While the report concluded that the RTA had generally 

complied with existing policies and procedures, it made a 

number of recommendations. As a result, the government 

of New South Wales has made several changes in its PPP 

policies and practices—refocusing its emphasis on value 

for money for its roadway users, improving overall 

transparency by disclosing all contract documents 

and amendments, and abandoning the no-net-costto-government policy.

Earlier, Victoria built on its 1990s experience while also 

drawing on the knowledge of countries such as the 

United Kingdom when it issued its Partnerships Victoria 

policy in 2000. This policy represented a fundamental 

shift in the state’s perspective and implementation of 

Figure 6. PPP highways in Victoria.

LEGEND

 State Freeways/Highways

 EastLink

 CityLink

Frankston Freeway

Princes Freeway

Western Wing Road

Calder Freeway

Eastern Freeway

Mornington Peninsula 

Freeway

Tullamarine

Freeway

South Gippsland

Freeway

Metropolitan Wing Road

Monash Freeway

Hume Highway

EastLink

CityLink

Dandenong Bypass

Ringwood Bypass

Airport

Melbourne CBD

Figure 7. Queensland’s AirportLink/Northern Busway PPP.

LEGEND

Airport Link

 Northern Busway

Airport Roundabout

 Upgrade

Airport Link

Airport Roundabout

Upgrade

Northern

Busway
16 Chapter 2» Highway PPP Program Characteristics

PPPs. Foremost, the policy established a clear aim of 

achieving value for money in the public interest, made no 

presumption that the private sector was more efficient in 

building and operating public assets, and emphasized 

optimal rather than maximum risk transfer to the private 

sector. Since promulgating this policy, Victoria has issued 

a variety of publications on PPP procedures, ranging 

from practitioner’s guides to contract management 

frameworks. Perhaps the strongest indicator of the 

maturity of its overall program is reflected in its project 

selection policy. Budgetary funds must be available to 

support any potential infrastructure project for it to be 

considered for inclusion in a capital program. If the 

potential project has the attributes necessary for a PPP, 

then it will be evaluated through Victoria’s “Value for 

Money” guidelines. Only if the project demonstrates 

value for money as a PPP will it proceed that way. 

Otherwise, Victoria’s provincial budgetary funds 

will be used to finance its conventional delivery.3

Similar to the United Kingdom, the Australian national 

government is working on a standard PPP contract by 

infrastructure sector, due in 2009. Some host country 

representatives viewed moves toward standardization 

in procedures and contracts as somewhat troubling. 

While standardization can promote stability and reduce 

transaction costs, too much standardization, especially

in contracts, can limit flexibility, effectively reducing 

avenues to structure PPPs as unique service arrangements. Instead, some representatives suggested dissemination of process guidelines for project definition and 

selection, procurement, and award coupled with a 

reasonable number of standard contract provisions to 

promote essentially the same end: market reliability 

and transaction cost reduction.

Public Acceptance of PPPs

As PPP programs have evolved in the host countries, so 

too has public acceptance of PPPs, although some issues 

remain. In many respects, public perspectives of PPPs 

have improved over time as the nations have tightened 

policies and improved practices. This is not to say that 

resistance has dissipated entirely, but that the public has 

come to expect better government decisionmaking on 

and oversight of PPPs.

Public concern over private sector profiteering was quite 

pronounced in some of the host nations at the onset of PPP 

programs. Public apprehension over the potential for 

unreasonable private sector profits was a real issue. With 

time, adjustments in policy and practice have reduced this 

apprehension. The more recent adoption of value-formoney principles for PPP projects and the public sector’s 

contractual regulation of private revenues or profits as 

well as sharing in the financial upside have helped 

minimize this concern. More specific practices are 

described in subsequent chapters. 

Resistance to tolling exists in the host nations visited, 

particularly the imposition of tolls where none existed 

before. “Excerpt: Private Sector Financing in Roads: Review of 

the Major Australian Toll Roads” is from a 1998 report by 

Austroads, the association of Australian and New Zealand 

road transport and traffic authorities, that provides an 

insightful perspective on toll roads. Both opposition 

aspects identified suggest that public resistance to a 

roadway or a toll road may have more to do with the 

fundamental source of the opposition than with who is 

providing the service. Representatives in New South Wales 

indicated that while general resistance to tolling has 

subsided somewhat, a new circumstance described 

as “toll fatigue” has developed.4

Officials in the United Kingdom have observed two 

interesting issues related to public acceptance of PPPs. 

The first is confusing PPP with privatization. To some 

these words are interchangeable. The difference between 

the two, however, is more than semantic. The transfer of 

ownership of an asset to the private sector qualifies as 

privatization, in which governance is through regulatory 

bodies such as public utility commissions. PPPs are service 

arrangements between the public and private sectors that 

are governed by contracts and the accompanying body of 

contract law. The second issue is general public opposition 

to the overall PFI policy, but project-specific support once 

the public is exposed to the advantages and disadvantages 

3

 It is worth noting that this was the policy described by Victorian officials; whether this policy is being followed is unknown. 

Still, the mere existence of such a policy suggests a radically different political view of PPPs than in the United States.

4

 A partial explanation of this fatigue might be the variable rates that residents of Sydney pay when using different sections 

of the Sydney Orbital. Since the Orbital was developed incrementally by different PPP contractors, the per-kilometer rates vary 

from segment to segment.
Public-Private Partnerships for Highway Infrastructure: Capitalizing on International Experience 17

of a PPP approach versus an alternative strategy. In both 

cases, the government’s transparency and accessibility on 

policy and project information and audits have improved 

public knowledge and acceptance of PPPs. I t is the politics of toll roads, rather than their 

economic legitimacy, that has become the issue 

by which toll roads in Australia have been judged 

in recent times. 

There are two aspects to the opposition which has arisen 

to these toll projects:

◆ road versus no road; and

◆ “free” versus “user pays.”

In the first aspect, road versus no road, ownership is not 

the issue. Good planning involves:

◆ integrated management of the land-use and transport 

system;

◆ adapting urban regions to provide for growth and 

change while moving towards more sustainable, 

efficient and equitable cities;

◆ establishing a local land-use/transport system with 

a closer fit between housing, local employment and 

services;

◆ developing transport routes as multi-modal corridors, 

planning them in a regional and local context, and 

developing roads and their environments together; 

and

◆ effective community consultation.

Governments must be informed managers to ensure the 

above requirements are met, whether the private sector 

is involved as project proponent or not. The politics 

can manifest into “no road” community pressure if the 

planning process is not successful.

In the second aspect, free versus user pays, again 

ownership is not the issue. Whether the government or a 

private developer owns a road, recent toll projects have 

been private sector projects with the tolls providing the 

revenue stream.

Therefore the issue is that the community, if given 

a choice, prefers not to have to pay directly to use 

particular roads. Where roads are financed from 

general taxation, road use appears to be “free.” Given 

that the majority of roads have no direct pricing, users 

exposed to toll roads may believe they are being treated 

inequitably compared to users of other facilities funded 

from general taxes.

Excerpt: Private Sector Financing 

in Roads: Review of the Major 

Australian Toll Roads
18
Each host nation follows a systematic methodology for PPP project programming and delivery. 

All countries decide to deliver a highway project 

by PPP after extensive front-end planning, although 

philosophical differences do exist among the nations on 

the justification of a PPP approach. Regardless, the 

programming and delivery processes used are informative, particularly because they provide contrasting 

perspectives to consider.

A fundamental question with any PPP arrangement is the 

particular funding arrangement that might prevail. Given 

the impact that the funding mechanisms can have on the 

general project programming and delivery process, these 

are discussed first in this chapter. 

Funding Mechanisms

PPP arrangements require revenue sources or rights to 

support their capital, operating, financing, and transaction 

expenses and to provide a return on equity investments. 

The host countries employ a variety of mechanisms to 

provide such funding: real tolls, shadow tolls, and directpayment mechanisms. Real tolls are relatively well 

understood; users pay a fee to use an asset. Shadow tolls 

and direct-payment mechanisms are less so. Often, 

shadow tolls are viewed as payments from a public entity 

to a contractor based on the volume of asset users. In 

Portugal and Spain, however, a shadow toll is comprised 

of a service payment, which is linked to traffic volume, 

and an availability payment, which is linked to the level 

of service provided. The simple notion of a direct-payment 

mechanism was presented in the United Kingdom as the 

fee the public entity pays the contractor. The payment 

mechanism is comprised of several components, but the 

availability of service is the principal one.5

 Another 

potential mechanism is ancillary revenues that might be 

derived from commercial development or land use 

arrangements along a roadway, such as service stations, 

restaurants, or utility corridors.

Portugal

Portugal uses direct real tolls and shadow tolls to provide 

the revenues necessary to support PPP projects. EP 

evaluates the economics of the proposed PPP project 

and recommends a tolling or funding strategy to the 

Portuguese government, which makes the final decision 

on toll structure.

In situations where traffic volumes are projected to 

exceed 15,000 vehicles per day, EP will generally 

recommend real tolls and may permit the concessionaire 

to employ congestion pricing schemes. If traffic volumes 

are projected to be below 10,000 vehicles per day, EP 

will usually recommend shadow tolls. In addition, the 

government may substitute shadow tolls for real tolls 

on urban commuter routes. Of the 2,500 km (1,553 mi) 

under PPP contracts, 1,400 km (870 mi) or 55 percent 

is real toll, 900 km (559 mi) or 37 percent is shadow 

toll, and 200 km (124 mi) or 8 percent is no toll. Toll-free 

PPPs result, for example, when a private partner builds 

a connector road that is not tolled as part of an overall 

highway concession agreement. Figure 8 (see next 

page) illustrates the past and projected mix of real 

and shadow tollways in Portugal’s National 

Motorway System. 

Where expected traffic volumes are modest, EP has 

recommended a dual approach in which real tolls are 

combined with shadow tolls with two components, a 

service payment linked to traffic volume and an availability payment linked to the level of service provided. In 

these cases, the initial basis for the real toll is common for 

all projects and has a contractual cap, while the shadow 

toll amount is bid variable. As traffic on these roads 

increases, the real toll revenues rise while the rate of 

shadow toll contributions by the government falls. 

Further, EP is considering removing shadow tolls from 

highways where the real tolls have become sufficient to 

meet project financial requirements.

CHAPTER 3 »

PPP Project Programming and Delivery

5

 In early PPP arrangements in the United Kingdom, shadow tolls based only on volume of service were commonly used; the United 

Kingdom has evolved to use payment mechanisms based heavily on availability of service. Hence, this overall approach to payment is 

often referred to as “availability payment.” 

Public-Private Partnerships for Highway Infrastructure: Capitalizing on International Experience 19
20 Chapter 3» PPP Project Programming and Delivery

Spain

Similar to Portugal, Spain uses both real and shadow tolls. 

The government conducts a feasibility analysis to determine whether the expected traffic volume will permit the 

use of real tolls. If not, shadow tolls are generally used in 

lieu of any real toll. In the case of real toll concessions, the 

Spanish government has recently begun to establish the 

tolling rate and structure. This is a change in philosophy 

from earlier concessions in which tolling rates and structures, as well as the concession period, were bid parameters. The basic rationale for the change is that fixing these 

parameters increases competitive pressure.

Of the 4,300 km (2,672 mi) of the National Highway 

System under PPP contracts, 3,800 km (2,361 mi) use real 

tolls, while 500 km (310 mi) use shadow tolls. In the 

Madrid metropolitan area, shadow tolls alone are generally used for PPP projects. The shadow tolls paid during a 

period usually are linked to traffic volume and the level of 

service provided. Only one PPP project in the Madrid 

region relied exclusively on real tolls. Other regions in 

Spain rely more heavily on real tolls. Like Portugal, Spain 

also requires construction of toll-free connector roads as 

part of some of its concession agreements.

United Kingdom

With the exception of the M-6, the national motorways 

under PPP contracts in the United Kingdom use either 

shadow tolls or direct payment mechanisms exclusively. 

Early PPP contracts often used shadow tolls based 

only on traffic volumes. More recent PPP contracts 

have used a payment mechanism based on various 

factors, such as congestion, lane availability, 

minimum performance criteria, and safety. In some 

cases, the payment is associated primarily with the 

availability of a required level of service (i.e., an 

availability payment).6

 PPP contractors typically 

propose the amount of direct payment from the 

government in their price proposals during procurement. Funding challenges, however, are driving the 

U.K. government to consider the use of real tolls on 

future highway PPPs.

Australia

In the three states, real tolls are used for highway 

PPP projects. While governments may propose either 

a lump sum or an annual contribution to the contractor in their request for proposals, respondents (bidders) 

have typically proposed the elimination or reduction of 

these contributions by government in their proposals. In 

New South Wales, the government now typically specifies 

the initial toll rate and uses indexing techniques for 

escalation. In Victoria and Queensland, the initial toll rate 

is typically a bid variable, but the government sets the 

tolling structure over time.

Project Analysis and Selection

Determining whether a project is suited for delivery by 

PPP is an important, but not daunting, task. A representative for the U.K. Highways Agency indicated that a PPP 

arrangement is a tool that can provide value for money, 

but this strategy is unlikely to do so if a project is too 

grand, too complex, or improperly prepared. “Getting it 

right is not difficult or a matter of luck,” the representative 

said, but it requires the public sector to define its requirements clearly and to prepare a project for the market. 

Accordingly, this section explains how the different 

nations go about getting it right.

A common attribute among the nations is the importance 

of long-term transportation and highway plans in their 

overall capital programming process. Each country has a 

general master transportation plan, and PPP candidate 

projects are typically identified from the requirements 

listed in the master plan. Another common perspective is 

that projects with reasonable to significant scale and 

Figure 8. Portugal’s National Motorway System with

mix of real toll and shadow toll segments.

Motorway Network Build-up

Real

Toll

1084

1626

2002

2008

Shadow 

Toll

670

906

6

 The United Kingdom still tolls some bridges in its existing PPP contracts, such as the Second Severn Crossing along the M4.
Public-Private Partnerships for Highway Infrastructure: Capitalizing on International Experience 21

complexity are often viewed as possible PPP arrangements. 

While scale can offset the substantial transaction costs 

involved in these projects, both attributes are likely to 

introduce meaningful risks throughout a project’s life cycle. 

Long-term risk assumption by the private partner is seen as 

a driver of innovative project concepts and solutions. 

Generally, Portugal and Spain use similar techniques for 

analyzing and selecting projects for delivery by PPP, and 

the United Kingdom and Australia employ comparable 

methods. Essentially, the principal difference between the 

pairs of nations is the justification rationale. In Portugal 

and Spain, a feasibility analysis is conducted during the 

project programming process. If the majority of a project’s 

market risks can be transferred to the private sector, the 

project is likely to proceed as a PPP. Alternatively, the 

United Kingdom and Australia employ a more methodical 

approach in which a public sector comparator (PSC) 

is developed and a value-for-money (VfM) analysis is 

conducted. Generally, a PPP approach is taken only if 

VfM is expected by following the PPP strategy.

Portugal

Portugal has developed and maintains a National Road 

Plan, which identifies current and future highway requirements as well as their proposed execution. This plan was 

last updated in 2000, and it serves as the country’s framework for highway development and management. Portugal is experiencing 6 percent annual traffic growth overall 

and 12 percent traffic growth on its motorway system.

Potential PPPs are drawn directly from the requirements 

in the 2000 plan. In fact, Portugal expects to use primarily 

PPP arrangements to complete its National Motorway 

System. During project programming, EP conducts a 

feasibility analysis to determine the financial viability of 

alternative funding schemes for upcoming motorway 

segments. In many respects, the question is what type of 

funding mechanism to apply to a particular segment. EP 

studies the circumstances, determines whether a real toll 

or a shadow toll is appropriate, and makes its recommendation to the Portuguese government. Once a funding 

decision is made, EP programs the project for execution.

Spain

Spain has a 15-year national plan from 2005 to 2020 for 

different transportation modes. Roughly 25 percent of the 

expected financing for national highways and roadways 

during this period will come from nonbudgetary sources—

in other words, through concession arrangements.

All potential projects go through a similar programming 

process, which Spain describes as a “maturation phase.” 

This phase typically lasts 30 months. During it, potential 

projects undergo an informative study and a project 

development process. During the informative study, the 

government completes a feasibility analysis to assess, 

among other things, the financial circumstances of a 

project. If the government can define the conditions of the 

project so that it is a viable candidate for private finance 

and the appropriate level of market risk can be transferred 

to the private sector, the project will likely proceed as a 

PPP arrangement.

Figure 9 (see next page), for instance, illustrates a preliminary economic analysis of a group of projects: intercity 

motorways, new radial highways, and regional development highways. The expected capital cost and daily traffic 

are depicted on the x and y axes, respectively. The lines 

radiating from the origin indicate a 7 percent internal rate 

of return (IRR) for contract terms of 35, 50, and 75 years. 

Individual projects are plotted on their projected capital 

cost and daily traffic. Projects in the upper left are quite 

viable economically, but too attractive for the private 

sector. Projects in the lower right are uneconomical and, 

therefore, are not attractive enough. To increase the risks of 

the three projects in the upper left, the scope of work for 

the projects will be increased (increasing the capital costs) 

to drive the projected IRR down toward 7 percent. To 

reduce the risks of the two projects in the lower right, 

public funds are introduced to drive the projected 

IRR up toward 7 percent.

Once the informative study is complete, the PPP versus 

non-PPP decision has been made and projects proceed 

through the development phase, during which 

environmental impact analyses and public information 

periods are completed. Finally, the scope and conditions 

of a project are drafted, and it is ready to enter the 

delivery, or execution, phase.

United Kingdom

The United Kingdom has transportation plans with a 

regional focus as well as a Programme of Major Schemes.7

7

 The Highways Agency in the United Kingdom uses the term “scheme” to refer generally to requirements or potential projects.
22 Chapter 3» PPP Project Programming and Delivery

Figure 10 shows the past and future focus of the 

Highways Agency’s investments. The decision on the 

delivery approach for schemes will consider (1) individual scheme priorities, (2) current or pending program 

commitments, (3) capital costs, and (4) network 

occupancy against a hierarchy of delivery options. 

A private finance strategy must be considered first 

for any major scheme (defined as any scheme with a 

capital cost exceeding £7.5 million), but schemes valued 

at less than £100 million are likely to offer better value 

if delivered conventionally. 

When a major scheme is identified, the project delivery 

strategy is determined jointly by Major Projects and the 

Procurement Division. In the case of a potential PPP, a 

VfM analysis is started by examining five areas: 

◆ Does the project have sufficient scale to offset 

the transaction costs of procurement and 

implementation? 

◆ Can the public sector define its needs and services? 

◆ Does the private sector have the appropriate 

experience and can it deliver? 

◆ Can whole-life (life-cycle) services be quantified? 

◆ Are there appropriate performance measures for 

assessment of the private sector?

If this examination suggests that VfM is possible, then 

a PSC analysis is conducted. The intent of the PSC 

analysis is to determine if a PPP approach generates 

value against a public provision strategy when life-cycle 

costs and risks are quantified, as depicted conceptually 

in figure 11. In the case illustrated, the PPP approach 

demonstrates value for money because the base case 

plus risks retained by the public sector are less in 

the PPP approach than the public provision estimate 

(the PSC) of the base case plus the risks retained.8

After completion of this analysis, either a PPP 

delivery is chosen or not.

8

 HM Treasury no longer requires the development of a PSC for PFI projects generally; the treasury has determined through its audits 

and experience that a project with the appropriate attributes most likely will pass the PSC test. The Highways Agency still makes use of 

the PSC as a mechanism to lend credibility to its delivery decision.

Figure 9. Example of Spain’s preliminary economic viability analysis of projects.

1,0 2,0 3,0 4,0 5,0 6,0 7,0 8,0 9,0

0

5.000

10.000

15.000

20.000

25.000

30.000

Scenario: IRR 7%, Average Toll 0,06 /Km, 10% equity, Interest rate 7%

Cost per Km (M /Km)

ECONOMIC VIABILITY AREA

NON ECONOMIC VIABILITY AREA

Madrid-Navalcarnero

Madrid-Ocaña

Madrid-Arganda

Madrid-Guadalajara

New radial highway

Estepona-Guadiaro

Alicante-Cartagena

Intercities motorway

Ávila-N VI

Santiago-Alto de Sto. Domingo

León-Astorga

Highway for regional developement

Segovia-San Rafael

M-50 ring

M-50 ring

M-50 ring

Public fund

Public fund

VPD

35 year term

75 year term

50 year term
Public-Private Partnerships for Highway Infrastructure: Capitalizing on International Experience 23

Of note is the difficulty and controversy that surround the use of VfM 

and PSC analyses. The challenges of 

implementing this methodology are 

captured by comments from U.K. 

elected officials:(f)

Successive administrations have 

adopted the policy of using the PFI 

for those cases where the approach 

is expected to deliver value for 

money. The Prime Minister said in 

September 2002 that the PFI has a 

central role to play in modernising 

the infrastructure of the NHS 

(National Health Service)—but as an 

addition, not an alternative, to the 

public sector capital programme. Yet 

the PFI is too often seen as the only 

option. To justify the PFI option, 

departments have relied too heavily on 

public sector comparators. These have 

often been used incorrectly as a pass or fail test; have 

been given a spurious precision which is not justified 

by the uncertainties involved in their calculation; or 

have been manipulated to get the desired result.

Despite such criticism, the methodology at the very least 

promotes the use of a systematic and auditable process, 

rather than an expedient or politically motivated one, for 

making a project delivery decision. In addition, it encourages a thorough business case analysis for any project, 

particularly large-scale endeavors. 

Australia

In each of the three states visited, statewide or regional 

transportation plans have been integral to the identification of possible PPP projects. Similarly, each state uses 

a VfM methodology including PSCs, comparable to the 

United Kingdom’s techniques for determining whether 

a PPP approach is justified.

In New South Wales, the Office of Infrastructure 

Management is responsible for the State Infrastructure 

Strategy (SIS), a rolling 10-year plan for all infrastructure 

systems. This plan draws heavily from the agencies’ 

Asset Strategies and Capital Investment Strategic Plans. 

Other strategies at municipal or regional levels are also 

considered when developing and updating the SIS. 

The highway PPPs in Victoria are more the result of 

long-term regional planning than routine statewide 

planning efforts. State officials had studied the need for the 

projects that became the CityLink and EastLink PPPs for 40 

to 50 years. The state has just completed a needs assessment 

for an east-west limited access corridor in Melbourne. 

In Queensland, Main Roads has in place a rolling 

5-year Roads Implementation Plan. The plan outlines 

projects totaling $16.2 billion. The Brisbane City Council 

has also played an integral role in planning improvements 

in Queensland’s largest city. It has in place a Brisbane 

Transport Plan Update 2006–2026, and the TransApex 

Figure 11. Illustrative PSC analysis in the United Kingdom.

Value for Money

Risks Retained by

Public Sector

Base Case

PFI PSC

+ Risk + Risk

4,250

4,000

3,750

3,500

3,250

3,000

2,750

2,500

2,250

2,000

1,750

1,500

1,250

1,000

750

500

250

-

£m

01/02 02/03 03/04 04/05 05/06 06/07 07/08 08/09 09/10 10/11 11/12 12/13 13/14

■ Administration

■ Traffic Management

■ Major Improvements

■ Technology

■ Making Better Use

■ Maintenance

Highways Agency Forward Investment Profile

Figure 10. U.K. Highways Agency investment profile, 2001–2014.
24 Chapter 3» PPP Project Programming and Delivery

Study of 2004 focused on an inner-city ring road system 

creating three new high-capacity river crossings. Recommendations from this study are shown in figure 12. 

Two of the projects the study identified are already being 

delivered by PPP arrangements (North-South Bypass 

Tunnel and AirportLink). 

All three states emphasized the significance of conducting 

a strong business case analysis before considering PPP 

delivery as an option. In fact, this consistent refrain 

indicates the general level of maturity of PPP policies and 

practices in Australia, where the states have incrementally 

normalized themselves. New South Wales moved first and 

Victoria followed. Despite the friendly rivalry between the 

two, they have learned from each other as their programs 

have evolved. Recently, Queensland has gotten into the 

act, and it has borrowed PPP knowledge acquired by the 

other states and used it to its advantage, even going as 

far as using public personnel from other states in the 

procurement process.

In fact, the basic drivers of VfM in New South Wales and 

Victoria are virtually identical:

◆ Improved risk management: This involves more 

rigorous risk evaluation and transfer to the private 

sector of those risks it is best able to manage, 

including those associated with providing specified 

services, asset ownership, and whole-of-life asset 

management.

◆ Ownership and whole-of-life costing:

Efficiency is improved as design and 

construction become fully integrated 

upfront with operations and asset 

management.

◆ Single point of contact: Ongoing service 

delivery, operational, maintenance, and 

refurbishment costs become a single 

party’s responsibility for the length of 

the contract period.

◆ Innovation: This involves wider opportunities and incentives for innovative 

solutions to deliver service requirements. 

Opportunities may include (1) bundled 

services through a package deal for all 

noncore services, (2) upgrades of associated and complementary infrastructure, 

and (3) packaged information systems.

◆ Asset utilization: This includes reducing 

costs to government, as a sole user, 

through more efficient design to meet 

performance specifications (i.e., service 

delivery) and creation of complementary 

opportunities to generate revenue from 

others’ use of the asset.

◆ Whole-of-government outcomes: These 

include nonasset- and nonprice-related 

value-adding outcomes of wider interest 

to the government, such as socioeconomic and environmental outcomes.

In practice, Queensland has followed 

similar logic. A quick read of these drivers 

suggests that many projects are not 

inherently amenable to these drivers, but 

■ North South Bypass Tunnel

■ Airport Link

■ Hale Street Link

■ Northern Link

■ East-West Link

1

2

3

4

5

1

2

3

4

5

■ Motorway Standard

■ Inner City Bypass

A

B

Figure 12. Project recommendations from TransApex Study in Brisbane.
Public-Private Partnerships for Highway Infrastructure: Capitalizing on International Experience 25

instead must be configured to conform to them. In this 

respect, the discussion in this section has come full circle, 

since this is exactly the point the representative of the 

U.K. Highways Agency made about getting it right. 

Risk Allocation and Management

All public agencies visited emphasized effective risk 

allocation as an important aspect of a PPP project. If 

significant risks throughout the project’s life cycle are not 

transferable to the private sector, then the project is likely 

not an appropriate candidate for delivery via PPP. This 

general point was made in the previous discussion about 

project selection and analysis, but its significance cannot 

be overemphasized. The basic risk allocation philosophies 

in each country (or state) differ, particularly on market or 

demand risk and its impact on the private partner’s 

ultimate financial situation. Further, practices related to 

changes in conditions throughout a project’s life cycle 

are also markedly different.

Tables 3 through 6 illustrate the general risk allocation 

approaches for PPP projects in each country. As they 

Table 3. General risk allocation in Portugal.

Risk Public Private

Design

Land Acquisition

Environmental Compliance

Construction

Operations and Maintenance

Market/Demand * **

Latent Defects

Change in Law

Force Majeure

Competing Facilities ***

*Shadow toll, **Real toll, ***Public may proceed with planned facility

Table 4. General risk allocation in Spain. 

Risk Public Private

Design

Land Acquisition

Environmental Compliance

Construction

Geotechnical

Utility Relocation

Operations and Maintenance

Market/Demand * **

Latent Defects

Change in Law

Force Majeure

Competing Facilities ***

*Shadow toll, **Real toll, ***Material impacts may require compensation by 

public sector

Table 5. General risk allocation in the United Kingdom.

Risk Public Private

Design

Land Acquisition

Environmental Compliance

Construction

Geotechnical

Utility Relocation

Operations and Maintenance

Appropriations*

Latent Defects **

Change in Law

Force Majeure

Competing Facilities ***

*Assumes direct payment funding approach, **Depends on contract, 

***Limited restrictions on public sector

Table 6. General risk allocation in Australia.

Risk Public Private

Design

Land Acquisition

Environmental Compliance

Construction

Geotechnical

Utility Relocation

Operations and Maintenance

Market/Demand

Latent Defects

Change in Law

Force Majeure

Competing Facilities *

*Limited restrictions on public sector
26 Chapter 3» PPP Project Programming and Delivery

indicate, the areas of greatest difference relate to the 

treatment of market risks and risks associated with 

changes in conditions over a project’s life cycle, such as 

latent defects or a law change. Another area of interest is 

how the countries handle the issue of competing facilities. 

In general, this risk is borne by the private sector subject to 

certain conditions. “Example: Competing Facility Provisions” provides an example of contract provisions related 

to competing facilities from a recent concession deed.

The sections that follow address these issues in each 

country, but a more detailed discussion of changes in 

conditions is provided in a subsequent section.

Portugal

EP conducts a risk analysis before beginning project 

procurement to balance risk allocation. It evaluates 

the expected rate of return for the private sector. If this 

expected rate is too high, EP will consider adjusting the 

scope of work or shortening the contract term for the 

project. If the expected rate is too low, EP may extend 

the concession period or include a government subsidy. 

Once the project begins, EP will consider restructuring the 

financial conditions of the PPP agreement if the ex-ante 

uncertainties in the project turn out to disproportionally 

favor either the public or the private sector, a practice 

termed “rebalancing.”9

Spain

Like Portugal, the Spanish government attempts to 

appropriately assign project risks when it conducts a 

thorough risk analysis during the informative study. If 

the expected rate of return for a PPP project is too high, 

the government will investigate means to reduce this 

rate, such as increasing the project’s scope of work to 

include feeder or connector roadway segments. If the 

expected rate is too low, the government will consider 

measures to increase the rate, such as including public 

subsidies. Once the project begins, the Spanish government will consider rebalancing the contract if the 

expected economic-financial equilibrium is not maintained. In other words, if risk distribution proves 

detrimental to either party, a restructuring may occur.

However, Spanish law requires that two conditions be 

met before rebalancing is triggered. First, the change in 

conditions must produce a substantial material effect on 

the party impacted. Second, this effect must be sustained 

over a reasonable time period. The rationale for this 

rebalancing concept is twofold: (1) the public and private 

sectors enter into the PPP agreement for the general 

public good using the best information available at the 

time of the agreement, and (2) this practice supports 

win-win outcomes and promotes stability in the market.

United Kingdom

The Highways Agency has learned that a “robust, 

auditable allocation of risk” is preferable to maximum 

risk transfer. Over time, the agency has sought to create a 

stable environment for risk allocation and management 

through measures such as the creation of a standard 

baseline contract document and the use of project procurement techniques such as conducting risk workshops 

and negotiating risk adjustments before finalizing 

project-specific agreements. Like Portugal and Spain, the 

United Kingdom may shorten the term of PPP contracts 

when the private partner’s actual revenues exceed 

originally projected revenues.

Australia

Similar to the United Kingdom, Australian states have 

learned that reasonable risk transfer is preferable to 

maximum risk transfer. All highway PPPs to date in the 

three states visited are real toll projects, and the states 

share the philosophy that private investors in these deals, 

both equity and debt holders, must bear the downside 

market risks. In other words, if the revenues or rates of 

return expected do not materialize, the private investors 

must endure the consequences. 

The maturity of the Australian PPP market supports this 

philosophy. Both investors and lenders have grown 

comfortable with these conditions and the marketplace 

itself can provide remedies to financial hardships 

(e.g., restructuring financing arrangements).

Procurement Process

Generally, all of the host nations use a competitive 

procurement process for selecting PPP contractors. The 

principal difference among the countries is the extent of 

negotiation that occurs during procurement. Extensive 

negotiations during the procurement process increase both 

9

 Portugal’s risk allocation and management practices were likely borrowed from Spain, which has used these techniques for some 

time in its highway PPP program.
Public-Private Partnerships for Highway Infrastructure: Capitalizing on International Experience 27

36. Interaction with transport network

36.1 Transport network support

(a) Principal Road Interfaces

The State must afford support to the Freeway 

equivalent to the support the State affords to other 

freeways by:

(i) managing the Principal Road Interfaces, having 

regard to the status of the Freeway as a freeway, 

to a level comparable to that afforded to other 

freeways;

(ii) expeditiously and diligently progressing 

maintenance (including incident management and 

obstruction removal) and repair of the Principal 

Road Interfaces in a manner and to a level similar 

to that afforded to other principal road interfaces 

for freeways;

(iii) if upgrading a Principal Road Interface, 

expeditiously and diligently progressing that 

upgrading, in a manner and to a level similar to 

that afforded to other principal road interfaces 

for freeways; and

(iv) procuring in a manner and to a level similar 

to that afforded to other freeways, that there will 

be no interference with the flow of traffic on the 

Principal Road Interfaces due to damage to, or a 

failure to expeditiously and diligently progress the 

repair of damage to, such Principal Road Interfaces 

(other than damage caused by a Concessionaire or 

any of its Associates).

(b) Exception to transport network support

The State will not be considered to have failed to 

provide the support required under clause 36.1(a) 

(Principal Road Interfaces):

(i) because of a failure to undertake new road 

works, unless that failure was due to discrimination 

against the Freeway relative to other freeways;

(ii) because of a failure to upgrade the capacity of a 

Principal Road Interface;

(iii) because of an act done in the course of the 

day to day activities of the State or its Associates in 

the management of the transport network, being 

activities which are expeditiously and diligently 

progressed and applied, as appropriate, throughout 

equivalent aspects of the transport network;

(iv) to the extent the failure is due to a 

Concessionaire or any of its Associates breaching 

a Transaction Document;

(v) because of a failure caused by an event beyond 

the reasonable control of the State or its Associates 

except to the extent that the State or its relevant 

Associates do not seek to overcome or mitigate 

the effects of that event in a manner and to a level 

comparable to that which would be afforded to 

other freeways in similar circumstances; or

(vi) because of the State or its Associates 

implementing transit lanes on the Eastern Freeway, 

Maroondah Highway or Cheltenham Road or giving 

public transport priority on Burwood Highway or 

Wellington Road.

36.2 Consequences of failure to provide State support

A failure by the State to provide the support required 

of it under clause 36.1 (Transport network support) 

will not constitute a breach of this Deed but may give 

rise to a Relevant Effect under clause 45 (Key Risk 

Management Regime).

36.3 No restriction on State

(a) No restriction on network changes

Each Concessionaire acknowledges and agrees that 

the Project Documents do not restrict, or require 

the exercise of, any right or power of the State, its 

Associates or any Council to develop, manage or 

change the metropolitan region’s transport network 

(including road and public transport networks) other 

than the Freeway.

(b) Examples

Accordingly, without limiting clause 36.3(a) 

(No restriction on network changes), the State, its 

Associates and any Council will be entitled on their 

own account, and to authorise others to exercise, 

or not exercise, any right or power they would 

otherwise have had, to:

(i) construct new Toll Roads, freeways and other roads;

(ii) connect new or existing Toll Roads, freeways and 

other roads to the Freeway;

(iii) extend, alter or upgrade existing freeways and 

other roads;

(iv) construct new public transport routes or services;

(v) extend, alter or upgrade existing public transport 

routes or services;

(vi) extend, alter or upgrade existing ports or inland 

cargo transfer and storage facilities; or

(vii) construct new ports or inland cargo transfer 

and storage facilities.

Example: Competing Facility Provisions
28 Chapter 3» PPP Project Programming and Delivery

36.4 Proximate State Work

(a) State’s right to carry out activities

Each Concessionaire acknowledges and agrees that the 

State or its Associates may do any one or more of the 

following (each a Proximate State Work):

(i) connect any road or other means of vehicle, 

public transport, pedestrian or bicycle access to the 

Freeway;

(ii) construct, maintain or repair any road or other 

means of vehicle, public transport, pedestrian or 

bicycle access above or below the Freeway;

(iii) connect to, construct, maintain or repair Utility 

Infrastructure (in whole or in part) under, on or 

above the Project Area or the Freeway;

(iv) connect to, construct, maintain or repair any 

other infrastructure or improvement (in whole or 

in part) under, on or above the Project Area or the 

Freeway; and

(v) anything reserved for the State or its Associates 

under clause 3 (Reservations) of the Freeway 

Lease, and whether as a consequence of use or 

development of the Median or otherwise.

(b) Restrictions

The State must not (and must procure that its 

Associates do not), undertake any Proximate State 

Work to the extent that Proximate State Work is 

carried out in reliance on this clause 36.4 (Proximate 

State Work) and not in reliance on the Project 

Legislation, Road Management Act, any other 

agreements or arrangements with either or both of the 

Concessionaires or some other right under Law:

(i) subject to clause 36.4(i)(ii) (Tolling responsibility), 

unless the State agrees to fully compensate the 

Concessionaires for:

(A) any net adverse impacts on the Construction 

Activities or the Operation Activities;

(B) any adverse cost consequences (less any cost 

savings) for the Concessionaires; and

(C) any adverse revenue consequences for, the 

Concessionaires to the extent due to any adverse 

effect on:

(I) the free flow of traffic onto, along or 

from the Freeway at its designed volume and 

speed; or

(II) the Construction Activities or the 

Operation Activities, 

to the extent due to the Proximate State Work, 

otherwise than to the extent that any such net 

adverse impacts or such adverse costs or revenue 

consequences:

(D) were not specified in the notice given by the 

Concessionaires under clause 36.4(c) (Advice as to 

impact); or

(E) arose due to a failure in whole or part by 

the Concessionaires to comply with clause 36.4 

(Proximate State Work); or

(ii) so as to permanently prevent the Concessionaires 

from undertaking the Project.

(c) Advice as to impact

With respect to any Proximate State Work which the 

State (or its Associates) propose be undertaken, the 

Concessionaires must as soon as reasonably practicable, 

and in such detail and with such supporting evidence 

as the State may reasonably request, provide the State 

with a notice setting out:

(i) their estimate of the costs to the Concessionaires 

(with no allowance for profit margin to the 

Concessionaires, a reasonable allowance for risk to 

a Contractor or Relevant Entity on goods or services 

procured by the Contractor or Relevant Entity 

from a third party (which allowance is disclosed 

to the State in accordance with the notification 

requirements of this clause 36.4 (Proximate State 

Work)) and, in respect of goods or services provided 

by the Contractor or Relevant Entity itself, a 

reasonable allowance for profit margin), arising 

from the proposed Proximate State Work being 

carried out, including:

(A) all direct and indirect costs (including costs of 

augmenting the Tolling System) and the costs of 

repairing, reinstating or managing any damage 

to the Works, the Temporary Works or the 

Freeway to the extent caused by the Proximate 

State Works; and

(B) any costs savings; and

(ii) their estimate of the positive or negative 

revenue impact during the Concession Period of the 

proposed Proximate State Work being carried out 

and the reasons for that revenue impact;

(iii) if the request is made prior to the last Date of 

Close-Out:

(A) the effect (if any) of the proposed Proximate 

State Work on:

(I) the achievement of (as applicable) Relevant 

Example: Competing Facility Provisions (continued)
Public-Private Partnerships for Highway Infrastructure: Capitalizing on International Experience 29

Milestone Dates, each Planned Date for 

Freeway Section Completion, each Late 

Completion Date, Tolling Completion and 

Close-Out for each Section;

(II) the Design and Construction Program; and

(III) the Project Plans; and

(B) the extension of time (if any) required to the 

Planned Date for Freeway Section Completion or 

the Late Completion Date (as applicable) for each 

Section affected by the proposed Proximate State 

Works, with details of the basis for this extension 

(including evidence demonstrating compliance 

with clauses 20.4(f)(ii) and (iii) (Condition 

precedent));

(iv) the effects (if any) of the proposed Proximate 

State Work on:

(A) the workmanship or durability of any part of 

the Works, the Temporary Works or the Facilities 

(including any items of plant or equipment 

forming part of the Facilities) and any warranties 

with respect to the Works, the Temporary Works 

or the Facilities;

(B) the provision of the Facilities for use by 

the general public for the safe, efficient and 

continuous passage of vehicles;

(C) traffic flow on, onto and off the Freeway 

during the Concession Period;

(D) the Construction Activities or the Operation 

Activities;

(E) the ability to handover the Facilities in 

accordance with the terms of this Deed;

(F) the performance of any other of the 

Concessionaires’ obligations under the 

Transaction Documents; and

(G) any relevant information related to carrying 

out the proposed Proximate State Works; and

(v) a description of any potential new Liability 

(or increase in any existing potential Liability) for 

which the Concessionaires will be at risk due to the 

Proximate State Work.

(d) Concessionaires’ notice requirements

The Concessionaires’ notice referred to in clause 36.4(c) 

(Advice as to impact) must be prepared:

(i) on an open book basis with respect to both 

the Concessionaires’ internal costs and the costs 

of the Contractors or Relevant Entities and any 

subcontractor of any of them (and to this end 

the Concessionaires must allow the State review 

and audit rights sufficient to verify that the 

Concessionaires’ notice has been prepared on an 

open book basis); and

(ii) in a manner so that there is no double counting.

(e) State Notice

If the State (or its Associates) propose to undertake 

Proximate State Work then:

(i) the State must give the Concessionaires 

reasonable notice that the State intends to do so; 

and

(ii) the Concessionaires must cooperate with 

the State to enable the State to undertake the 

Proximate State Work.

(f) Estimate of compensation/extension of time

(i) If the State gives the Concessionaires notice that 

it (or its Associates) intend to undertake Proximate 

State Work under clause 36.4(e)(i) (State Notice) 

then, prior to the commencement of the Proximate 

State Work, the parties must seek to:

(A) agree any amount of compensation 

and, subject to clause 36.4(f)(iv) (Estimate of 

compensation/extension of time), the scope of 

any indemnity or insurance reasonably required 

against any new or increased Liability identified 

by the Concessionaires under clause 36.4(c)(v) 

(Advice as to impact) which the Concessionaires 

are seeking to include in their notice under 

clause 36.4(c) (Advice as to impact); and

(B) agree the extension of time (if any) required 

to the relevant Planned Date for Freeway Section 

Completion for each Section or the relevant Late 

Completion Date (as the case may be).

(ii) If the State and the Concessionaires fail to agree:

(A) the amount of that compensation or the 

extension of time (if any) required to the 

relevant Planned Date for Freeway Completion 

or the relevant Late Completion Date (as the case 

may be); or

(B) subject to clause 36.4(f)(iv) (Estimate of 

compensation/extension of time), the scope 

of any indemnity or insurance reasonably 

required against a new or increased Liability 

identified by the Concessionaires under clause 

36.4(c)(v) (Advice as to impact), prior to the 

commencement of the Proximate State Work, 

either the State or the Concessionaires may refer 

the matter directly for expert determination 

under clause 73 (Expert determination).

(iii) For the purposes of clauses 36.4(f)(i) and (ii) 

(Estimate of compensation/extension of time), the 

parties agree that:
30 Chapter 3» PPP Project Programming and Delivery

(A) the State will not be required to indemnify 

either Concessionaire for any indirect, 

consequential or pure economic loss or pay any 

compensation for the cost of any insurance for 

such loss; and

(B) amounts due by FinCo or the Concessionaires 

to pay or repay the Project Debt on the due date 

for payment (without regard to any acceleration 

of the obligation to pay or repay) are not 

regarded as indirect, consequential or pure 

economic loss.

(iv) The requirements of clauses 20.4(f)(ii) and (iii) 

(Condition precedent) are conditions precedent to 

the Concessionaires’ entitlement to an extension 

of time to the relevant Planned Date for Freeway 

Section Completion or the relevant Late Completion 

Date (as the case may be) pursuant to clause 36.4(f)

(i)(B) (Estimate of compensation/extension of time).

(v) In determining a Dispute under clause 36.4(f)

(ii) (Estimate of compensation/extension of time) 

the expert appointed under clause 73 (Expert 

determination) must (without limiting clause 36.4(f)

(iv) (Estimate of compensation/extension of time)) 

have regard to and make a determination in a 

manner consistent with the matters contained in 

clauses 20.4(f)(iv), (v), (vi), (viii) and (ix) (Condition 

precedent).

(vi) The relevant Planned Date for Freeway Section 

Completion or the relevant Late Completion Date 

(as the case may be) will be extended by the time 

(if any) agreed under clause 36.4(f)(i) (Estimate of 

compensation/extension of time) or determined 

by the expert under clause 36.4(f)(ii) (Estimate of 

compensation/extension of time).

(g) Proximate State Work

If the State or its Associates decide to undertake 

Proximate State Works, then:

(i) the Concessionaires must:

(A) give the State and its Associates sufficient 

access to the Licensed Areas and the Leased Areas 

to enable the State to plan, design, investigate or 

undertake the Proximate State Works;

(B) cooperate with the State and its Associates 

to allow implementation of the Proximate State 

Works, including allowing the management of 

traffic on, entering or leaving the Freeway to 

facilitate the State and its Associates managing 

traffic on or in the vicinity of the Freeway; and

(C) take all reasonable steps to mitigate any Loss 

suffered by it or adverse impact on, or adverse 

cost or revenue consequences for, the Project as a 

result of the Proximate State Work including:

(I) mitigating the effect of any temporary lane 

closure which is required; and

(II) complying with its obligations under clause 

36.4(i)(i) (Tolling responsibility) as soon as 

practicable;

(ii) the State must, and must procure that its 

Associates will, with the cooperation of the 

Concessionaires, minimise to the extent practicable 

any disruption to the Construction Activities or the 

Operation Activities.

(h) Maintenance responsibility

Upon the completion of any Proximate State Work, 

unless the State otherwise elects, Concessionaire’s 

operation, maintenance and repair obligations under 

this Deed will apply to the Proximate State Work as if 

the Proximate State Work formed part of the Freeway 

to the extent that the Proximate State Work is located 

on, above or under the Licensed Area or the Leased 

Area, except for the Proximate State Work which the 

State advises Concessionaire that it is not required to 

maintain.

(i) Tolling responsibility

(i) Concessionaire is responsible for temporarily or 

permanently augmenting the Tolling System so as 

to avoid any untolled use of the Freeway during 

the carrying out of, or following completion of, 

Proximate State Work.

(ii) With respect to any untolled use of the Freeway 

arising, or augmentation of the Tolling System to 

be carried out, in connection with any Proximate 

State Work, the relevant part of the compensation 

to which the State is required to agree under clause 

36.4(b)(i) (Restrictions) will be both:

(A) the reasonable incremental cost of 

augmenting the Tolling System to avoid such 

untolled use of the Freeway; and

(B) the revenue foregone less costs saved due to 

that untolled use of the Freeway to the extent 

only that that revenue loss was unavoidable 

notwithstanding that Concessionaire has fully 

complied with its obligations under clause 36.4(g) 

(Proximate State Work).

(j) Power to operate

Each Concessionaire acknowledges and agrees that 

the State or its Associates, as applicable, may operate 

Example: Competing Facility Provisions (continued)
Public-Private Partnerships for Highway Infrastructure: Capitalizing on International Experience 31

any road, or other means of vehicle, public transport, 

pedestrian or bicycle access, Utility Infrastructure or 

other infrastructure or improvement (in whole or in 

part) connected to, on, above or under the Freeway 

or the Project Area unless this Deed provides that

such operation is the right or obligation of 

Concessionaire.

(k) Concessionaire’s warranty

Each Concessionaire:

(i) warrants that the impact of any Proximate State 

Work (including any detrimental impact on the 

Concessionaires’ performance of their obligations 

under this Deed) is limited to the impact specified 

in a notice given by the Concessionaires under 

clause 36.4(c) (Advice as to impact) and agreed 

or determined under clause 36.4(f) (Estimate of 

compensation/extension of time); and

(ii) acknowledges and agrees that the 

Concessionaires will be entitled to the compensation 

and extension of time (if any) agreed or determined 

under clause 36.4(f) (Estimate of compensation/

extension of time) but will not be entitled to any 

other Claim arising out of or in respect of or in 

connection with the Proximate State Work, except 

to the extent that a Concessionaire is entitled 

to claim an extension of time under clause 20.4 

(Delays) in respect of a Knock-on Effect.

its time and cost. An overview of the processes in each 

country is shown in figure 13, which arranges the four 

countries on a continuum ranging from a pure bid to 

a pure negotiation for selection of the PPP contractor. 

Spain is on the left and the United Kingdom is on the 

right, with the others in between.

Portugal

EP uses essentially a two-stage competitive procurement 

process to select its preferred bidder. For each procurement, EP typically engages roughly 20 staff members 

along with complementary financial and technical 

advisors. In the first stage, an advertisement for bids is 

placed in the Official Journal of the European Union (OJEU), 

generally for 2 months. Bids are then presented by 

interested parties and evaluated. Bids are typically 

evaluated on several weighted criteria:

◆ Technical quality

◆ Government’s contributions to project:

– Net present value (NPV) of government payments 

(shadow toll situation)

– Subsidies requested

◆ Risk allocation and management plan

◆ Proposed date of facility opening and full 

operation

◆ Robustness of financial and legal structure 

Following evaluation, two respondents are short-listed, 

and this process generally lasts 3 months. In the second 

stage, EP enters into negotiations with the two remaining 

teams and ultimately selects its preferred bidder (another 

2 months). A contract award is then made (1 month). 

Financial close occurs after contract award (another 2 

months). In total, the process is completed in roughly a 

year. EP makes all bids received in the first stage available to all respondents for 10 days, and it also makes the 

final two bids received after negotiations in the second 

stage available to all respondents for 10 days. This 

practice helps facilitate the transparency of the process 

among all respondents.

Spain

Spain uses what it calls the “open competition model” 

for procurement of highway PPP projects. Effectively, the 

government issues a call for tenders, and interested 

parties submit binding proposals that comply with the 

call’s project requirements and conditions. Respondents 

may offer up to three alternatives. Award criteria are 

typically technical qualities and economic conditions of 

the proposals. Other variables may be included on a 

project-by-project basis. An award is made on the basis 

of the most economically advantageous tender. Typically, 

a staff of about 20 civil servants handles multiple 

procurements simultaneously.

The Spanish government views this approach as competitive and efficient, but it also recognizes the importance of 

clearly delineating its expectations and terms for the 

project in its request for tenders.(b) Financial close is not 

required before contract award, primarily because the 

Spanish markets are quite familiar with the nature of the 

Pure

Negotiation

Spain Portugal Australia United Kingdom

Pure

Bid

Figure 13. Continuum of procurement

processes of host countries.
32 Chapter 3» PPP Project Programming and Delivery

procurement process as well as its standard contract 

documentation.

Another rationale indicated for the open competition 

model is the transaction cost savings it affords. According 

to representatives in Spain, the cost of its tendering process 

to the private sector bidders averages €300,000 to 

€500,000. A study by the European Investment Bank and 

Polytechnic University of Madrid indicates that the total 

transaction costs of all respondents and the public sector 

as a percentage of project capital value of an open competition model versus a negotiated model is roughly 2 to 12 

percent. A potential downside of this approach, however, 

is that it may attract too many bidders. Spain typically 

receives three to eight bids, but it has received as many as 

20. While a reasonable number of bidders promotes fair 

competition, too many bidders can drive up transaction 

costs as well as discourage some qualified bidders from 

participating because the probability of success falls. 

United Kingdom

The United Kingdom has generally employed a negotiated 

procurement process for its highway PPP projects. 

Depending on the scale and complexity of the project, the 

in-house staff and consulting advisors involved can vary 

significantly. Procurement of the M25 project included a 

significant staff of internal and external personnel. “Case 

Example: M25” describes this project more fully. The 

primary stages of the process are (1) prequalification, (2) 

tender, (3) negotiation, and (4) contract award. Each stage 

is described below.

Prequalification includes the following:

◆ Prior information notice (PIN) to indicate to the 

market that a solicitation is pending

◆ Advertisement in OJEU

◆ Issue of prequalification pack, which includes 

details of the project, description of submission 

requirements, and assessment criteria

Tender includes the following:

◆ Issue of tender documents, which include a model 

contract, instructions and guidance to tenderers 

(IGT), an illustrative design to demonstrate to 

respondents that a feasible design solution for the 

project exists, and draft schedules

◆ Dissemination of tender circulars and response to 

queries

◆ Submission of tenders

◆ Assessment of tenders, which leads to identification 

of the provisional preferred bidder (PPB) and 

subsequently the preferred bidder

Australia

All three states generally follow a multistage competitive 

procurement process. As discussed previously, both 

Victoria and Queensland have opted to form temporary 

public agencies for the sole purpose of procuring and 

commissioning highway PPP projects. Figure 14 illustrates 

the structure of the Southern and Eastern Integrated 

Transport Authority (SEITA), which was established to 

procure Victoria’s EastLink. “Case Example: EastLink” (see 

page 35) explains certain features of the unique project. 

Figure 14. Structure of Victoria’s SEITA.

13 staff

3 staff

Clayton Utz

PWC

3 Staff 3 staff

GHD 2 staff 2 staff

Minister for Roads & Ports

CEO

(+ Executive Assistant)

SEITA Board

(+ Secretariat)

Director

Business Services

Director

Commercial/Legal

Director

Engineering

North & Traffic

Director

Engineering

South & Traffic

Director

Communications

Director

Frankston ByPass
Public-Private Partnerships for Highway Infrastructure: Capitalizing on International Experience 33

Background and Chronology

T he M25, the orbital motorway that encircles London, 

is one of the busiest stretches of roadway in the U.K. 

system. Although considered a single entity today, the 

M25 was constructed in a piecemeal fashion from 1975 to 

1986. Since then, certain sections have been lengthened 

and widened. Congestion on the orbital and its contiguous 

roadways led to the ORBIT Multi-Modal Study to examine 

measures to improve overall mobility in the area. The study 

concluded that additional capacity was needed on the M25, 

as well as implementation of Integral Demand Management 

techniques: (1) incident management, (2) lane management, 

(3) access management, (4) traveler information, and (5) 

wide-area traffic management. Following a business case 

analysis, the Highways Agency decided to pursue the 

needed improvements via a PPP arrangement—a DBFO 

delivery using a direct payment mechanism for a contract 

period of 30 years starting in 2009.

The project road, roughly 400 km (249 mi) long, consists 

of the M25, the A282 Dartford Crossings, and intersecting 

radial trunk roads, as shown in figure 15. The project scope 

requires the PPP contractor to widen four sections of the 

M25 (roughly 100 km or 62 mi) from a dual three-lane to 

a dual four-lane route. The expected capital cost of the 

widening is £2 billion, and construction is anticipated to 

take 8 years. In addition, the PPP contractor will assume 

responsibility for operating, maintaining, and managing 

the road.

Milestones in the project’s implementation to date are as 

follows:

◆ November 2005—OJEU notice

◆ November 2005 to March 2006—Prequalification

◆ April to October 2006—Invitation to submit outline 

proposals (ISOP)

◆ March to October 2007—Tender stage

◆ November 2007 to April 2008—Evaluation and 

negotiations10 

◆ June 2008 to January 2009—Post tender and 

financial close

Interesting Aspects of Procurement 

and Delivery

For the M25, the Highways Agency’s general procurement 

process was augmented somewhat because of the project’s 

complexity and to minimize the transaction costs for 

both the public and private sectors. Before the formal 

tender stage, the Highways Agency issued an ISOP, which 

required the five prequalified teams to respond to a 

questionnaire on quality issues such as processes, resources, 

and organizational values. Following assessment, three 

teams were short-listed and continued to the tender 

stage. A conforming tender was required, while variant 

tenders were encouraged. A limited retender was necessary 

because of noncompliance by all three bidders.

Negotiation and evaluation of the tenders was quite 

complex because the Highways Agency essentially 

considered three unique tenders for the project. 

Accordingly, three separate negotiation and evaluation 

teams were assembled; their activities were coordinated 

by a chief procurement official and the project manager. 

A steering group monitored the process to ensure its 

integrity and fairness. Evaluation of the M25 tenders was 

a three-stage process: (1) quality assessment, (2) price 

assessment of all tenders meeting the quality threshold, 

and (3) price-quality tradeoff process, if necessary. 

The quality assessment criteria were the following:

◆ Delivery of service—40 percent

◆ Robust processes—15 percent

◆ Appropriate resources—15 percent

Case Example: M25

Figure 15. The M25 orbital roadway

surrounding London.

HATFIELD

HOLMESDALE

BELL COMMON

21a 21a

20

19

18

17

16

23 24 25 26 27

28

29

30

1b

2

3

4

5

6 7 8

9

10

11

12

13

14

15

10A limited retender was required during the period January to February 2008.
34 Chapter 3» PPP Project Programming and Delivery

The rationale for a separate authority is based on prior 

success with this structure, the singular focus of the 

authority, the facilitation of streamlined decisionmaking, 

and the ability of the authority to deal with all parties in a 

transparent and fair manner. 

The procurement process in the three states begins with 

an invitation for expressions of interest (EOI). Following 

receipt of EOIs, a short-list is created, and then the 

government issues a detailed RFP.11 The RFP typically 

includes the following:

◆ Comprehensive information about the issuing public 

agency, key stakeholders, project sociopolitical 

conditions, and project objectives

◆ Description of the service delivery requirements and 

proposed payment mechanism

◆ Explanation of any design requirements and a 

proposed completion date for construction

◆ Proposed contractual arrangements and risk allocation

◆ Description of the subsequent evaluation and 

selection processes in the procurement 

Proposals are received from the short-listed teams, active 

negotiations with individual teams are conducted, final 

proposals are evaluated against defined criteria established generally on a project-by-project basis (such as 

tolling structure, concession length, design features, etc.), 

and a preferred bidder is selected. Subsequently, contracts are finalized and financial close is reached. The 

states generally request a conforming proposal (i.e., one 

in full accordance with the RFP), while also allowing 

nonconforming proposals (i.e., ones with alternatives or 

deviations from the RFP). This allows the private sector 

some latitude to bring new project ideas or concepts for 

consideration by the public sector.

Transparency

The transparency of a procurement process—the 

attributes that make it stable, reliable, and predictable 

to actual and potential participants and to procurement 

officials, legislators, and the public—is fundamental to 

the acquisition of public services or works. Given the 

characteristic scale and complexity of PPP projects, 

transparency is crucial because interest among citizens, 

elected officials, and the media is typically heightened 

and private participants are careful about placing their 

limited project proposal funds at risk in processes that 

are poorly structured or unlikely to reach closure. One 

private representative in Australia explained that its 

proposal costs are typically 1 percent of a PPP project’s 

capital costs. Of these funds, 25 percent is spent on 

design work, 7.5 percent on traffic demand modeling, 

13.5 percent on internal staff costs, 33 percent on external 

success fees,12 and the balance on other costs.

The host nations are quite aware of the need for transparency and implement various practices to ensure it during 

project procurement. Portugal makes all proposals 

received available to every respondent. Spain solicits bids 

from its respondents with well-defined parameters and 

award criteria. The United Kingdom employs probity 

officers to monitor its sometimes-complex contract 

◆ Supportive values and behaviors—15 percent

◆ Pricing methodology—15 percent

For each criterion, an overall score was assigned and a 

minimum quality threshold was established.

The pricing assessment was based on the level of gross 

annual payments to the PPP contractor; adjustments to the 

payment amount can be made, including a risk adjustment 

for any contract amendments. The tender with the lowest 

adjusted net present value (NPV) wins, subject to the pricequality tradeoff. All tenders within 5 percent of the lowest 

tender were included in the tradeoff process, in which 

price and quality scores were weighted 85 percent and 

15 percent, respectively.

Project Outcomes and Current Status

In May 2008, the Highways Agency announced that Connect 

Plus was its provisional preferred bidder (PPB). Connect Plus 

is a consortium of Atkins, Balfour Beatty, Egis Projects, and 

Skanska. The overall contract is expected to be worth £5 

billion. Financial close was pending at time of publication.

Case Example: M25 (continued)

11 In some cases, the contract for the proposed project is included with the RFP.

12 External success fees are monies due to external entities contingent on contract award (i.e., bonuses for success).
Public-Private Partnerships for Highway Infrastructure: Capitalizing on International Experience 35

Background and Chronology

EastLink, Victoria’s second fully electronic tollway, links 

the Eastern Freeway in Mitcham to the Frankston 

Freeway in southeast Melbourne. The 39-km, $2.4 billion 

freeway is Victoria’s second highway PPP, and it opened 

to traffic in June 2008.

Original plans for a proposed Scoresby Freeway began 

in the 1960s, and the public sector reserved much of the 

necessary right-of-way during this period. Throughout 

the 1990s, environmental studies and impact assessments 

were completed. By 2000, the pressure to develop the 

roadway began to mount as several town councils along 

the route lobbied the state government to take action.

During 2001 and 2002, the government completed its 

business case analysis of the project, and the decision was 

made to combine the Scoresby Freeway and the Eastern 

Freeway Tunnels Project into the Mitcham-Frankston 

Freeway Project.

In 2003, the Victoria government announced that the 

freeway would be funded by real tolls and delivered via 

a PPP arrangement. The Southern and Eastern 

Integrated Transport Authority (SEITA) was formed 

to oversee the procurement and commissioning 

of the project. Later that year, SEITA called for 

expressions of interest, and the commonwealth 

government (national government) granted 

environmental approvals for the project. SEITA then 

issued its request for proposals (RFP) to two bidding 

consortia—ConnectEast and Mitcham Frankston 

Motorway. In April 2004, proposals were submitted 

and by October ConnectEast was announced as the 

winning bidder.

Major construction commenced in 2005, and the project was 

renamed EastLink. The project includes the following:

◆ 39 km (24 mi) of freeway-standard road

◆ Twin three-lane, 1.6-km (1-mi) tunnels

◆ 17 interchanges and 88 bridges

◆ Two toll-free bypass roads

◆ 40 km (25 mi) of shared-use recreational pathways 

Interesting Aspects of Procurement 

and Delivery

CityLink, Victoria’s first highway PPP arrangement, was 

procured in the mid-1990s and opened for service in 2000. 

Various lessons from the first procurement, as well as 

general experiences in the highway PPP marketplace, were 

incorporated into EastLink’s procurement and delivery.

◆ Financial considerations: The tolling rate and 

structure were bid variables for the bidders to evaluate 

and propose for assessment by the government. Toll 

escalation was allowed annually, but not at a rate 

Case Example: EastLink

Figure 16. Pedestrian bridge, sound wall, and public art on EastLink.
36 Chapter 3» PPP Project Programming and Delivery

negotiations to scrutinize the fairness of such proceedings. 

Australia not only has closed but also has under construction and completed some of the largest highway PPP 

contracts in the world. These practices and outcomes, 

as well as others, are simple illustrations of each nation’s 

recognition of the significance of transparency to the 

overall credibility of a PPP program. 

Contract Periods

The contract periods for recent PPP projects in the host 

nations generally range from 30 to 40 years. Portugal tends 

to use a standard period of 30 years for its concessions. 

While Spain has used concessions as long as 75 years in 

the past, current arrangements vary from 25 to 40 years. 

The government sets the period based on what term 

makes sense economically. In the United Kingdom, the 

Highways Agency has set recent contracts at 30 years. In 

Australia, the contract period is often a bid variable. In the 

case of the AirportLink/Northern Busway project, the 

proposed and accepted term is 45 years. 

Contract Documents and Technical 

Standards

Generally, all of the host nations use contracts with a 

standard structure for their PPP projects, which includes 

(1) the agreement, (2) a common or core set of contract 

provisions and requirements, (3) project-specific contract 

provisions and requirements, and (4) common or 

project-specific schedules or “sheets.”

In each country, technical standards for various highway 

structures and components are specified by the 

government. Any deviations proposed by the private 

sector are usually assessed during the procurement 

stage for suitability. During the design and construction 

phases, the independent verifier typically provides 

periodic certification that design and construction are 

proceeding according to agreed-on standards. Early 

contracts, in some cases, provided too much flexibility to 

the private sector on technical provisions, but the nations 

have learned that the services they seek from PPP 

greater than the consumer price index. Bidders were 

required to share any excess revenues above that 

forecast with the government, and they were given 

the opportunity to improve the value of their offer by 

allowing the government to participate “in the benefits 

of refinancing.”(g)

◆ Procurement considerations: The RFP emphasized 

various evaluation criteria, such as conformance 

with overall project, technical, and safety objectives; 

deviations from the established risk allocation 

framework in the contract document; and the quality of 

urban design elements. The concession period was also a 

bid variable to be proposed by bidders.

◆ Contractual considerations: The project was required 

to be open for service by November 2008. No restrictions 

were placed on general public transit or road network 

work by the state, but any state work deemed proximate 

(i.e., connecting to or within the vicinity of the project) 

could entitle the concessionaire to just compensation if 

net adverse impacts occur.(h)

◆ Performance considerations: An independent 

reviewer, complemented by a proof engineer and a 

construction verifier, would oversee administration 

of and compliance with the contract documents 

throughout design and construction and 2 years into 

operations. The proof engineer and construction verifier 

were introduced to provide additional technical scrutiny, 

particularly in the civil and tunnel works of the project. 

The RFP and concession deed also established KPIs in 

four long-term target areas: (1) customer service, (2) 

road maintenance, (3) landscape and environment, and 

(4) tolling accuracy. If performance thresholds are not 

met, the concessionaire may be at risk financially up to 

$17 million annually. Rather than pay the government, 

the concessionaire is required to distribute any such 

abatement amounts to EastLink’s customer account 

holders in the form of toll credits. 

Project Outcomes and Status

EastLink is Victoria’s largest urban road project and PPP to 

date. The project opened 5 months ahead of schedule with 

no claims or significant issues for the state thus far. It also 

has the lowest per-kilometer toll in Australia at AU$0.11 

per kilometer (2004 dollars). The project is noteworthy 

for its urban design features (as shown in figure 16) with 

attractive noise walls, pedestrian bridges, and public art. 

Fully electronic tolling has also produced innovation in 

tolling products and flexible approaches to toll collection 

enforcement. In addition, the project has achieved a net gain 

in native vegetation in the project area.

Upon opening, the project had a 4-week toll-free period. 

Tolling began in July 2008. 

Case Example: EastLink (continued)
Public-Private Partnerships for Highway Infrastructure: Capitalizing on International Experience 37

arrangements should not come at the expense of sound 

engineering practices.

Contract Change Management

Contract modification is also an area in which learning has 

occurred. Early contracts did not necessarily provide the 

flexibility needed to update them over time as prevailing 

conditions changed. For instance, the U.K. Highways 

Agency is in the process of negotiating major changes in 

contracts signed in 1996. In Portugal and Spain, the 

principle of a sustained, material effect is generally applied 

to determine whether a contract change is warranted for 

either the public or the private sector’s benefit. In the 

United Kingdom, the Highways Agency has recently 

adopted a two-tiered contract modification strategy. In the 

case of a major change, a contract review occurs, which 

may necessitate negotiation of a new contract. The M25 

project is the first to include this contract review condition. 

Otherwise, a step-change process is included in the 

contract so standard modifications can be handled within 

the existing agreement. Step changes may result from 

eligible changes indentified in the contract, changes in law, 

modifications initiated by the private partner, or changes 

to accommodate project improvements or enhancements. 

Australia typically negotiates contract changes on an 

as-needed basis, but it has also established processes for 

handling both major and minor modifications to the 

contract. Originally, contracts included fairly liberal 

material adverse effect provisions in the event of changes 

in conditions; more recent contracts have tightened these 

provisions to a more limited set of events (see “Example: 

Contract Modification Provisions” below).

37. Modifications

37.1 Request for information by State

The State may request from each Concessionaire 

information as to revenue and cost impacts on, respectively, 

each Concessionaire’s Works, Temporary Works, Facilities, 

Construction Activities or Operation Activities and other 

matters specified in the request in relation to a proposed 

Modification of the Works, the Temporary Works, the 

Facilities or the obligations in the Project Documents which 

relate to the Construction Activities or the Operation 

Activities.

37.2 Details of Modification

If the State proposes to request a Modification, it will 

provide the Concessionaires with details of the proposed 

Modification and consult with the Concessionaires 

concerning the proposed Modification at least 30 Business 

Days prior to issuing the request under clause 37.1 (Request 

for information by State).

37.3 Concessionaires’ Modification Notice

As soon as practicable after receipt of a request from the 

State under clause 37.1 (Request for information by State), 

the Concessionaires must provide the State with a notice 

(Concessionaires’ Modification Notice) setting out detailed 

particulars of:

(a) Costs

their estimate of the costs (with no allowance for profit 

margin to either Concessionaire, reasonable allowance 

for risk to a Contractor or Relevant Entity on goods or 

services procured by the Contractor or Relevant Entity 

from a third party (which is disclosed to the State in 

accordance with the notification requirements of this 

clause 37.3 (Concessionaires’ Modification Notice) 

(and, in respect of goods or services, provided by 

the Contractor or Relevant Entity itself, a reasonable 

allowance for profit margin)), of carrying out the 

proposed Modification, including:

(i) all direct design, construction, commissioning, 

operation, maintenance or repair costs;

(ii) all indirect or consequential design, construction, 

commissioning, operation, maintenance or repair 

costs (including deferments and delay costs);

(iii) any costs savings; and

(iv) any change in the amount or timing of 

Taxes payable by a Concessionaire relating to 

the proposed Modification (including any costs 

relating to the proposed Modification not being 

an allowable deduction under the Income Tax 

Assessment Act 1936 (Cth)) noting that each 

Concessionaire must use reasonable endeavours 

to reduce any adverse impact and maximise the 

positive impact, on the timing or payment of Taxes 

as far as practicable, which may, for example, entail 

adopting an alternative structure for having the 

Modification implemented;

(b) Revenues

Example: Contract Modification Provisions
38 Chapter 3» PPP Project Programming and Delivery

their estimate of the positive or negative revenue 

impact of carrying out the proposed Modification;

(c) Time impacts

if the request is made prior to the last Date of 

Close-Out:

(i) the effect (if any) of the proposed Modification 

on the:

(A) achievement of (as applicable) the Relevant 

Milestone Dates, each Planned Date for Freeway 

Section Completion, each Late Completion Date, 

Tolling Completion for each Section and CloseOut for each Section;

(B) Design and Construction Program; and

(C) Project Plans; and

(ii) the extension of time (if any) required to 

the relevant Planned Date for Freeway Section 

Completion or the Late Completion Date (as 

applicable) for each Section or the relevant Late 

Completion Date (as the case may be) affected 

by the proposed Modification, with details of 

the basis for this extension (including evidence 

demonstrating compliance with clauses 20.4(f)(ii) 

and 20.4(f)(iii) (Condition precedent));

(d) Facilities impacts

the effects (if any) of the proposed Modification on:

(i) the workmanship or durability of any part of the 

Works, Temporary Works or the Facilities (including 

any items of plant or equipment forming part of 

the Facilities and any warranties with respect to the 

Works, the Temporary Works or the Facilities);

(ii) the provision of the Facilities for use by the 

general public for the safe, efficient and continuous 

passage of vehicles;

(iii) traffic flow on, onto and off the Freeway during 

the Concession Period;

(iv) the Construction Activities or the Operation 

Activities;

(v) the ability to handover the Facilities in 

accordance with the terms of this Deed;

(vi) the performance of any other of the 

Concessionaires’ obligations under the Transaction 

Documents; and

(vii) any relevant information related to carrying out 

the proposed Modification.

(e) Concessionaire funding

if funding is required and the Modifications were to be 

funded other than by the State, the amount, timing, 

cost, terms and other consequences of such funding;

(f) State funding

if funding is required and the Modifications were to 

be funded by the State, the amount, timing, cost, 

terms and other consequences of any such State 

funding;

(g) Implementation

the time within, and the manner in which, the 

relevant Concessionaire or Concessionaires propose to 

implement the Modification;

(h) Relevant effect

any effect which is both material and detrimental on:

(i) the ability of FinCo to pay or repay the Actual 

Debt on the due dates for payment (without regard 

to any acceleration of the obligations to pay or 

repay); or

(ii) the Equity Returns,

that will, or is likely to, result as a consequence of 

the proposed Modification (including supporting 

evidence) together with details of a commercially 

appropriate and reasonable method by which the 

relevant Concessionaire or Concessionaires propose 

that this material and detrimental effect will be 

addressed which takes into account the level of risk 

to the relevant Concessionaire or Concessionaires 

inherent in undertaking the Modification determined 

first, assuming the case where the Concessionaire 

funds the proposed Modification and secondly, 

assuming the case where the State funds the 

proposed Modification;

(i) Material enhancement

any material enhancement to:

(i) the ability of FinCo to pay or repay the Actual 

Debt on the due dates for payment (without regard 

to any acceleration of the obligations to pay or 

repay); or

(ii) Equity Returns,

that will, or is likely to, result as a consequence of 

the proposed Modification (including, in the case 

where the Modification involves any omission or 

deletion from the Construction Activities, the Works, 

the Temporary Works, the Operation Activities or 

the Facilities, any material enhancement resulting 

from a reduction in costs incurred or to be incurred 

by the Concessionaires, the ability, earlier than 

Example: Contract Modification Provisions (continued)
Public-Private Partnerships for Highway Infrastructure: Capitalizing on International Experience 39

anticipated, to pay, repay or provide a return of, 

or reduce the required amount of, Actual Debt or 

Equity Funding or any resulting increase in forecast 

revenue) together with details of a commercially 

appropriate and reasonable method by which the 

Trustee will return to the State (or, at the State’s 

election, Concessionaire will return to users of the 

Freeway) the proportion of that benefit which 

is in excess of any part of that benefit which it is 

necessary for the Concessionaires to retain in order 

for the Concessionaires to be able to give relevant 

Equity Returns to the Equity Investors which takes 

into account the level of risk to the Concessionaires 

inherent in undertaking the Modification 

determined first, assuming the case where the 

Concessionaires fund the proposed Modification 

and secondly, assuming the case where the State 

funds the proposed Modification;

(j) Project Documents

the minimum changes required to the Project 

Documents to accommodate the proposed 

Modification and the associated arrangements, 

including as to funding, land use, the method of 

addressing any material and detrimental effect and 

the method for returning a proportion of the benefit 

of any material enhancement to give effect to the 

Modification; and

(k) Other relevant information

any other relevant information related to carrying out 

the proposed Modification.

37.4 Commercially appropriate and reasonable 

methods

The commercially reasonable and appropriate method or 

methods by which a material and detrimental effect 

will be addressed, as contemplated by clause 37.3(h) 

(Relevant effect) or a proportion of a benefit of any 

material enhancement returned as contemplated by 

clause 37.3(i) (Material enhancement) may involve one 

or more of the following:

(a) varying the Project Documents;

(b) varying the Concession Period and the term of the 

relevant Freeway Lease;

(c) varying the financial or other contributions or 

returns of the parties (or providing for new financial 

or other contributions or returns);

(d) requesting that the Financiers restructure the 

Project financing arrangements;

(e) varying the Toll Calculation Schedule; or

(f) taking any other action which is appropriate and 

reasonable.

Public Involvement During 

Commissioning

Like any project, commissioning activities are important 

to a successful opening. While technical conditions and 

issues are just as important as in other project delivery 

methods such as design-bid-build or design-build, PPP 

arrangements must focus substantial attention on the 

project’s users—the riders of the facility. While all nations 

emphasized the importance of public involvement and 

information dissemination during the project delivery 

process, Australia in particular stressed the importance of 

public involvement as a project nears its opening. This is 

likely because all of its PPP arrangements employ real 

tolls and are basically greenfield projects, so the public 

needs to understand tolling products, rates, and enforcement; points of access; etc. Often, a toll-free period is used 

to test operating systems and familiarize the public with 

the facility. Without a focus on the facility’s users, both 

the public and private sectors risk alienating their 

clientele and losing their patronage.
40
While PPP project identification, procurement, 

and delivery often receive substantial attention, the scan team quickly recognized the 

significance of the operating phase of any PPP arrangement. This is the period when the paying public uses the 

facility under private operation and determines whether it 

fulfills their expectations and needs. Indeed, PPPs can 

bring a customer focus to the facility, which in many 

respects differentiates it from other project delivery strategies—at least in the nations visited during the scan. When 

defining or scoping a PPP project, the primary focus in this 

seasoned international community is often on identifying 

and conveying the outputs desired. Project outputs are 

what customers focus on—reliable travel times, safe travel 

environment, comfortable ride, etc. Thinking first about 

what customers desire rather than developing a prescriptive definition of an asset is a major transition in practice. 

To do so requires beginning with the end in mind. In other 

words, defining and managing project user requirements 

and operational standards are integral to programming 

and procuring PPP projects.

This chapter examines practices 

for establishing performance 

measures that focus on desired 

project outcomes, managing the 

partnership with the private 

contractor during both the capital 

delivery and operations phases, 

and specifying handback provisions to make sure the facility is 

returned to the public sector in 

reasonable condition. 

Performance Measures

Unquestionably, performance 

measures or key performance 

indicators (KPIs) are central to 

the most recent PPP projects 

observed in the nations the scan 

team visited. Each country uses KPIs to generate the 

outcomes it desires for its PPP projects, and they are the 

basis for incentives and penalties—primarily during a 

project’s operations phase. In most cases, KPIs are used 

to define target performance levels, and KPI schedules 

specify formulas for calculating metrics or points that 

serve to determine whether these targets are being met.

For instance, Spain has used KPIs to manage safety, 

heavy vehicles, congestion, winter weather conditions, 

and toll collection times, as well as other elements. 

Table 7 provides examples of the metrics used. In some 

cases if the PPP contractor maintains or exceeds the 

level of performance specified for the majority of the 

contract term, the contract period is extended by a 

predetermined number of years. In this case, the 

incentive is back-loaded.

The United Kingdom has tied its KPIs for the M25 

Motorway to its payment mechanism to the PPP 

Public-Private Partnerships for Highway Infrastructure: Capitalizing on International Experience 41

CHAPTER 4 »

PPP Project Contract Management 

and Operations

Table 7. Examples of KPIs in Spain.

KPI Area Measurement

Safety A = N*108

 / L*365*AADT

Where:

A = accident rate

N = number of accidents with victims

L = length of highway under management (km)

AADT = average annual daily traffic

The accident rate is compared with the previous year’s rate; an 

increase results in a penalty, while a decrease results in a bonus 

of up to 5% of the annual service payment. 

Heavy Vehicles IF at least 90% of the time during the first 35 years of concession, 

at least 35% of total heavy vehicle traffic in the corridor uses the 

highway AND at least 90% of the time during the first 35 years 

of concession, at least 40% of total heavy vehicle traffic use is at 

night, THEN the concession period is extended 1 year.

Winter Weather 

Conditions

Road closure = €1,800/hour in fines

Tire chains required = €600/hour in fines
42 Chapter 4» PPP Project Contract Management and Operations

contractor. The payment mechanism is comprised of 

the following potential adjustments:

◆ Lane availability (principal element)

◆ Route performance

◆ Condition criteria

◆ Safety performance

◆ Unplanned events

◆ Proactive management

Table 8 describes several of the adjustments possible.

In Victoria, the KPIs associated with the EastLink project 

focus on customer service, road maintenance, landscape 

and environment, and tolling accuracy. Failure to comply 

with KPIs can result in up to $17 million annually in 

deductions for the PPP contractor. Any deductions 

collected from the concessionaire will be distributed to 

EastLink’s users rather than retained by the government, 

since the users are the ones not receiving the paid-for 

service.

Managing the Partnership

Given that the PPP contracts observed ranged from 25 to 

50 years with the typical term from 30 to 40 years, the 

relationship between the public and private sectors is 

indeed a long-term one. This circumstance puts managing 

the partnership at the forefront. Clearly, the partnership 

arrangement most tangibly manifests itself in contract 

management practices.

These practices are split into the capital delivery and 

operations phases. During design and construction, 

all of the host nations employ an independent verifier 

who serves as an objective third party to administer 

(certify pay requests, etc.) and review (check compliance 

with requirements, make onsite visits, etc.) the project, 

as illustrated in figure 17. Payment policies for the 

independent verifier varied among countries. In most 

cases, the government and the PPP contractor share this 

cost. In one case, however, the PPP contractor covers this 

cost up to a threshold amount, above which the cost is 

shared. Since verifiers are often paid on a fee basis, the 

logic is that higher verification costs indicate inadequate 

performance by the contractor, so bearing this cost 

serves as an incentive. 

While management of capital delivery is certainly 

important, the crux is contract management during the 

operations phase. This crystallized for the scan team 

when a department’s representative (DR) in the United 

Kingdom briefed the team about his role and responsibilities as the Highways Agency’s long-term contract 

manager. His knowledge and skills were clearly evident, 

as was his significance to maintaining the partnership 

with the private contractor as intended. Technically, the 

DR has three key roles: (1) performance monitoring, 

(2) financial monitoring, and (3) contract administration. 

On the surface, these appear similar to those of an 

owner’s representative on a typical construction project. 

If one scratches below the surface, however, it becomes 

clear that the DR must carefully balance the relationship 

with the PPP contractor with the intended contract 

requirements, risk allocation, and service standards over 

a substantial time period. Moreover, the DR must do this 

with modest in-house support staff. The other countries 

visited have similar positions, such as the government 

delegate in Spain.

Table 9 (see page 44) summarizes basic contract 

management roles, responsibilities, and examples during 

the operations phase. Certainly, performance monitoring 

is a critical responsibility of the contract manager. In 

the United Kingdom, if the PPP contractor is not in 

KPI Area Measurement

Lane 

Availability

Deductions for lanes closed

Deductions based on delay cost model

No deductions for:

Agreed closures on sections during 

widening

Core nighttime period

Incidents and accidents

Route 

Performance

Monthly deduction or bonus 

Assessment over specified routes

Condition 

Criteria

Deductions for:

Substandard carriageway

Lanes seriously affected by snow or ice

Loss of technology systems

Safety 

Performance

Annual deduction or bonus

Comparison of M25 with national safety 

trends

Proactive 

Management

Annual bonus

Assessment of commitment to agency 

objectives

Table 8. Adjustments to payment mechanism to

M25 PPP contractor in the United Kingdom.
Public-Private Partnerships for Highway Infrastructure: Capitalizing on International Experience 43

compliance with performance standards, the DR may 

take five levels of action:

◆ Level 1: Comments and Observations

The DR notifies the contractor in writing that certain 

requirements or standards are out of compliance.

◆ Level 2: Nonconformance Report

The DR files an official report on contractor 

noncompliance with requirements or standards.

◆ Level 3: Remedial Notice

The DR puts the contractor on notice that if 

compliance with requirements or standards is not 

achieved within a certain timeframe, penalty 

points will be assessed.

◆ Level 4: Penalty Point Notice

The DR files a report and the contractor is assessed 

penalty points for noncompliance.

◆ Level 5: Warning Notice

The DR informs the contractor of potential significant 

contractual actions that may occur; this may eventually trigger the government’s step-in rights.13

Certainly, noncompliance issues are best handled quickly 

and with the least amount of disruption. To date, the 

United Kingdom has not had to proceed to Level 5 with 

any PPP contractor.

Aside from these aspects of operations contract management, a key aspect is recognizing who retains what risks 

and making sure the contract manager’s actions do not 

inadvertently make the public sector liable for a risk 

allocated to the PPP contractor. The DR in the United 

Kingdom provided a good example. In the contract that 

he manages, the private partner is responsible for roadway availability during winter weather, so essentially the 

contractor bears the risk of keeping the roadway clear of 

snow and ice. During a particularly bad storm, the 

contractor was unable to get its snow removal equipment 

up a steep grade, so a portion of roadway had to be 

closed until the weather cleared. The contractor was 

penalized for this service failure. Later, harsh weather 

was forecast, and the PPP contractor consulted the 

contract manager on how to keep the same thing from 

happening again. Rather than prescribing what he 

thought the contractor should do, the contract manager 

first reminded the contractor that it was its responsibility 

to keep the roadway clear. Through a careful dialogue 

the contractor came to the conclusion that it should 

pre-position the snow-removal equipment near the crest 

of the steep grade. In the course of this fairly routine 

interaction, the DR did not step into the contractor’s 

shoes and potentially expose the Highways Agency 

to any claims for cost due to DR directives.

Handback Provisions

Generally, handback provisions specify residual service 

lives expected at expiration of the contract period for 

different structures and components of a highway or 

roadway. For example, the United Kingdom’s standard 

13 Step-in rights grant the government the contractual remedy to take over the contract from the service provider.

Figure 17. Typical role of independent verifier in PPP project.

Victorian Government

SEITA

ConnectEast

Thiess John Holland

Sub-contractors Designers Tolling system supplier 

Debt providers Independent Reviewer

Transfield Services

Operations & Maintenance
44 Chapter 4» PPP Project Contract Management and Operations

is that 25 percent of the asset life remains at handback. 

Handback processes described in project or concession 

deeds are not unlike the turnover practices at the end of 

construction. Generally, a series of joint inspections 

between the government and the contractor will occur to 

determine whether adherence to the specified level of 

maintenance and repair has been achieved. Provisions to 

remedy unsatisfactory conditions are typically detailed. 

For instance, the contract may require establishment of a 

program of actions with milestones to bring the facility up 

to the expected standard. “Example: Handover 

Provisions” shows example handover provisions 

in a recent concession deed.

The effectiveness of these provisions and the processes for 

their enforcement have yet to be tested in the countries 

visited, or the staff did not have direct experience with 

concessions that had previously expired. In New South 

Wales, however, the RTA is preparing for the return of the 

M4 Motorway in February 2010. The RTA began this 

process in 2007 to provide adequate time to address issues 

that may arise, particularly since the handover provisions 

of this early arrangement were not as robust as more 

recent provisions (see “Example: Handover Provisions”). 

An obvious concern is what asset management strategy 

the contractor will use to comply with the handback 

provisions. The handback provisions, however, are but one 

factor that influences the asset management approach. 

Another is the contract term. By and large, the host nations 

set the term so that at least one major renovation of most 

or all of the components will be necessary. Concerns about 

the contractor deferring maintenance and repair for as 

long as possible are mitigated somewhat by the KPIs 

established and by the contractor’s interest in keeping 

customers—the roadway’s users—satisfied with the 

service level they receive. Otherwise, the viability of the 

contractor’s commercial enterprise could be at stake. 

Table 9. Basic contract management roles in operations period.

Role Responsibilities Examples

Performance Monitoring ◆ Formal audits

◆ Site inspections

◆ Spot checks

Spot checks

◆ Traffic management

◆ Pavement condition

Financial Monitoring ◆ Traffic data

◆ Deductions/bonuses

◆ Monthly payments

◆ Annual reconciliation

Annual reconciliation

◆ Maintain records incrementally

◆ Annual adjustments based on

 deductions or bonuses

Contract Administration ◆ Liaison

◆ Report

◆ Records and data

Liaison

◆ With PPP contractor

◆ With third parties (customers, etc.)
Public-Private Partnerships for Highway Infrastructure: Capitalizing on International Experience 45

15.13 Final Handover

(a) The Parties must, if required by STATE, carry out joint 

inspections of the Motorway and Third Party Works at a 

mutually convenient time:

(i) 3 years prior to the expiry of the Term; and

(ii) 18 months prior to the expiry of the Term.

(b) Following each inspection under clause 15.13(a), 

the Parties will seek to reach agreement on:

(i) the maintenance and repair works required to 

achieve Final Handover;

(ii) a programme for the carrying out of those works by 

the Company; and

(iii) an estimate of the cost of carrying out those works.

If the Parties fail to reach agreement on any of the 

matters referred to in this clause 15.13(b) within 

20 Business Days after the date of the relevant joint 

inspection then STATE may refer the matters in 

dispute for resolution in accordance with clause 26.

(c) The:

(i) Company or the Trustee (as the case may be, having 

regarding to their respective obligations under the 

Deed) must carry out the works agreed or determined 

under clause 15.13(b) in accordance with the 

programme agreed or determined pursuant to 

clause 15.13(b); and

(ii) Company must either:

A. progressively deposit into an account opened 

by STATE in STATE’s name with an authorised 

deposit-taking institution (within the meaning 

of the Banking Act 1959 (Cth)) (the “Escrow 

Account”) 40% of all revenue collected by the 

Toll Collection System during the last 3 years or 

18 months of the Term (as the case may be) until 

such time as the balance of the Escrow Account 

equals or exceeds 40% of the total estimated cost 

of the works (as agreed or determined pursuant 

to clause 15.13(b)); or

B. provide to STATE an unconditional undertaking 

which complies with the requirements of clause 13.1 

for an amount equal to 40% of the estimated cost 

of the works (as agreed or determined pursuant to 

clause 1 5.13(b)), as security for the performance of 

such works and the Company’s or Trustee’s other 

obligations under this clause 15.13. 

(d) Subject to its rights to have recourse to the monies held 

in the Escrow Account, STATE must pay the balance held 

in the Escrow Account to the Company within 20 Business 

Days after the Date of Final Handover. 

(e) As conditions precedent to Final Handover:

(i) there must be:

A. no immediate repair work required to any part 

of the Motorway or the Third Party Works; and

B. otherwise no Defects in the Motorway or the 

Third Party Works;

(ii) the Company or the Trustee must transfer 

ownership to STATE or its nominee of all plant and 

equipment owned by them or in respect of which they 

have an option to acquire title and required for the 

O&M Work; and

(iii) the Company must supply to STATE all spare 

parts and special tools necessary for the continued 

operation, maintenance and repair of the Motorway 

and the Third Party Works after the expiry of the 

Term for a period of 12 months.

(f) During the final 3 months of the Term, the Company 

must train STATE (or other) personnel as nominated by 

STATE in all aspects of the operation, maintenance and 

repair of the Motorway and the Third Party Works to a 

level of competency that will allow those personnel to 

manage, operate, maintain and repair the Motorway and 

the Third Party Works so that the obligations specified in 

clause 15.1 can be fulfilled after the expiry of the Term.

(g) It is a condition precedent to Final Handover that the 

training referred to in clause 15.13(f) be completed to the 

reasonable satisfaction of STATE.

(h) For a period of 12 months after the expiry of the Term, 

the Company must ensure that it has competent and 

experienced personnel available to consult with STATE on 

any aspect of the operation, maintenance and repair of the 

Motorway and the maintenance and repair of the Third 

Party Works where required by STATE.

(i) Within 60 Business Days after the expiry of the Term, 

STATE will make determinations as to “residual design 

life,” as defined in section 10.3 of the Scope of Works 

and Technical Criteria, with respect to each:

(i) Asset Element of the Motorway and the Third 

Example: Handover Provisions
46 Chapter 4» PPP Project Contract Management and Operations

Party Works referred to in section 5.2 of the Scope of 

Works and Technical Criteria and, subject to clause 

15.13 (i)(ii), each Asset Item forming part of that Asset 

Element; and

(ii) Asset Item or Asset Sub-Item of the Motorway and 

the Third Party Works specified in Appendix 20 to the 

Scope of Works and Technical Criteria, as at the expiry 

of the Term, using methodology for the determination 

which is consistent with relevant industry practice at 

the time which may include using:

(iii) any technology used at the time for the purpose of 

making such determinations; or

(iv) records kept by the Company and the Trustee 

during the Term as required by the Scope of Works 

and Technical Criteria.

(j) If STATE believes that the “residual design life” of an 

Asset Element, Asset Item or Asset Sub-Item or any part 

thereof is less than the “specified residual design life,” as 

defined in section 10.2 of the Scope of Works and Technical 

Criteria for the relevant Asset Element, Asset Item or Asset 

Sub-Item, then STATE may give notice to this effect to the 

Trustee and the Company specifying:

(i) the extent to which it believes the “residual design 

life” is less than the “specified residual design life;” and

(ii) the cost of the measures necessary to ensure that 

the Asset Element, Asset Item or Asset Sub-Item or any 

part thereof have a “residual design life” at least equal 

to the “specified residual design life.”

(k) The Trustee and the Company may within:

(i) a reasonable time of receipt of STATE’s notice under 

clause 15.13j); or

(ii) in any event, 60 Business Days of receipt of STATE’s 

notice under clause 15.13(j), carry out all necessary 

work to ensure that the “residual design life” of the 

relevant Asset Element, Asset Item or Asset Sub-Item or 

part thereof is equal to the “specified residual design 

life” for the relevant Asset Element, Asset Item or 

Asset Sub-Item:

(iii) within and at such time as may be required by 

STATE;

(iv) in accordance with the requirements of any 

relevant Authority;

(v) so as to minimise the impact on the use of the 

Motorway or the Third Party Works; and

(vi) in a manner which causes as little inconvenience as 

possible to:

A. users of the Motorway or the Third Party Works;

B. users of any Service or access; and

C. the adjacent community.

(l) If neither the Trustee nor the Company carry out 

the work referred to in clause 15.13(k) within the time 

specified, subject to clause 15.13(o), the Company must pay 

STATE (without limiting the provisions of clause 12) the cost 

determined by STATE under clause 15.13(i)(ii) as a debt due 

and payable by the Company to STATE.

(m) Compliance by the Trustee and the Company with 

clause 15.13(k) or by the Company with clause 15.13(1) 

is a condition precedent to Final Handover.

(n) In this clause 15.13, the terms “Asset Element,” “Asset 

Item” and “Asset Sub-Item” have the same meaning as in 

the Scope of Works and Technical Criteria.

(o) Nothing in clause 15.13(1) will limit STATE’s rights 

against the Company or the Trustee, whether under this 

Deed or otherwise according to law in respect of any 

Defect.

Example: Handover Provisions (continued)
Public-Private Partnerships for Highway Infrastructure: Capitalizing on International Experience 47

CHAPTER 5 »

PPP Program Performance and 

Common Lessons Learned

Overall, PPPs have served the nations the scan 

team studied well. They have allowed them to 

achieve objectives they would not have otherwise. The countries, however, have had to learn hard 

lessons about these arrangements and endure intense 

scrutiny from other executive agencies, elected officials, 

and the public.

This chapter summarizes the outcomes achieved generally 

and by each country through the use of highway PPPs, as 

well as common lessons learned over the past two decades 

during their implementation. 

Outcomes

PPPs have allowed all of the host nations to deliver 

specific projects sooner than possible with conventional 

project delivery methods. Essentially, the public sector’s 

capacity to appropriate budgetary funds lags behind the 

private sector’s ability to access capital in the financial 

markets, particularly for large-scale projects. Alone, this 

circumstance does not justify a PPP approach, but it is a 

fact that public agencies use to their advantage.

Several host nations claimed that PPPs produce better 

price and schedule certainty for design and construction. 

Certainly, one of the private partner’s incentives is to 

open a project for service as quickly 

as possible so it can begin collecting 

revenue from tolls or government 

payments. As an illustration, table 

10 shows the schedule performance 

of the PPP projects in New South 

Wales, Australia.

Portugal

Foremost, Portugal has built its 

National Motorway System using 

PPPs. In doing so, it has kept pace 

with the traffic demands of its 

country, vastly improved highway 

safety and travel times, and leveraged private investment. 

While upgrading the quality of the motorway system 

probably has more to do with the improvements in safety 

and travel times than the implementation of performancebased PPPs, the pace of Portugal’s highway development 

program, and thus its improved motorway quality, is 

directly attributable to its aggressive PPP program since 

2000. Figures 18 and 19 (see next page) are telling in 

this regard. 

Spain

Similar to Portugal, Spain has built a majority of its 

National Highway System through concessions and, in 

the near future, will have more than half of this system 

under active PPP concessions. Since the 1960s, Spain has 

pioneered the concession model for infrastructure 

development and has continuously sought better ways to 

improve the effectiveness and efficiency of its approach. 

Along the way, it has also built a global industry that is 

positioned to provide highway development, operations, 

and financial services anywhere in the world.

United Kingdom

PPPs, as well as increased use of the private sector in 

highway operations and maintenance contracts, have 

contributed to the Highways Agency’s transition from a 

Project Opened Scheduled Opening Time Savings

M4 May 1992 Feb. 1993 9 months

M5 Aug. 1992 Feb. 1994 18 months

Sydney Harbour Tunnel Aug. 1992 Aug. 1992 On time

M2 May 1997 Nov. 1997 6 months

Eastern Distributor Dec. 1999 Aug. 2000 8 months

Cross-City Tunnel Aug. 2005 Oct. 2005 2 months

Westlink M7 Dec. 2005 Aug. 2006 8 months

Lane Cove Tunnel Mar. 2007 May 2007 2 months

Total 53 months

Table 10. Schedule performance of highway PPPs in New South Wales.
48 Chapter 5» PPP Program Performance and Common Lessons Learned

Figure 18. Traffic volume versus fatalities in Portugal.

0

10000

20000

30000

40000

50000

60000

70000

80000

90000

1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004

0

500

1000

1500

2000

2500

3000

Million veh.kmFatalities

SOURCE: LNEC 1985–2005: traffic demand increased 4 times; fatalities reduced by 50%

Traffic volume

Fatalities

Figure 19. Road safety improvement in Portugal: 1995 to 2006.

Fatalities/Million Inhabitants

1995 2000 2005 2006

Malta

Holanda

Reino Unido

Dinamarca

Alemanha

Finlândia

Luxemburgo

Áustria

Espanha

Irlanda

PORTUGAL

Eslováquia

Bélgica

Republica Checa

Chipre

Hungria

Latvia

Lituana

Malta

Holanda

Suécia

Reino Unido

Dinamarca

Alemanha

França

Itália

Irlanda

Luxemburgo

áquia

Espanha

élgica

PORTUGAL

Estónia

Republica Checa

Hungria

Eslovénia

Chipre

Polónia

Grécia

Latvia

Lituana

Malta

Reino Unido

Suécia

Holanda

Alemanha

Dinamarca

Irlanda

Itália

Hungria

Áustria

França

lgica

Espanha

Republica Checa

Estónia

Eslovénia

Chipre

Polónia

Luxemburgo

Lituana

PORTUGAL

Grécia

Latvia

Malta

Suécia

Reino Unido

Holanda

ndia

Dinamarca

Alemanha

Irlanda

Itália

Média (UE25)

Bélgica

Espanha

Austria

Republica Checa

França

Hungria

Luxemburgo

Polónia

Chipre

Lituana

Eslovénia

Grécia

Estónia

Latvia

PORTUGAL

Eslováquia

Finlâ

Bé

Média (UE25)

Eslováquia Média (UE25)

Finlândia

B

Eslov

Itália

Eslovénia

Grécia

Polónia

Estónia

Áustria

Média (UE25)

França

Finlândia

Suécia

65

65

86

86

112

116

121

123

123

38

+105%

+60%

+30%

+6%

46

49

56

61

65

71

89

105

106

126

127

129

140

143

104

43

125

119

61

67

68

77

91

93

111

116

117

122

137

144

144

157

161

163

175

183

187

145

149

184

117

247

116

143

146

152

154

154

179

183

184

209

228

244

271

132

229

173

154

43

49

56

58

62

66

75

78

87

92

97

112

91

84

85

25

104

98

86

128

130

137

101

191

94

221

95

146

99

39

150

152

177

223

91
Public-Private Partnerships for Highway Infrastructure: Capitalizing on International Experience 49

network provider to a network operator—“steering, not 

rowing.” This has allowed the agency to heighten its 

awareness of its customers and focus on its key 

performance measures:

◆ Reliability—Implement a program of delivery 

actions that tackle unreliable journeys on the strategic 

road network.

◆ Delivery of major projects—Deliver to 

time and budget the program of major schemes on 

the strategic road network.

◆ Road safety—Deliver the Highways Agency’s 

agreed-on proportion of the national road casualty 

reduction target.

◆ Maintenance—Maintain the strategic road 

network in a safe and reliable condition and deliver 

value for money.

◆ Environment—Mitigate the potentially adverse 

impact of strategic roads and take opportunities to 

enhance the environment, taking into account value 

for money.

◆ Customer satisfaction—Deliver a high level 

of road user satisfaction.

◆ Efficiency—Deliver the Highways Agency’s 

contribution to the Department for Transport’s 

efficiency target.

 Australia

Australian states have used highway PPPs selectively 

in their urban centers to implement large-scale surface 

mobility improvements in a relatively short timeframe. 

These highways have improved both commuter and 

freight travel in the most densely populated cities in 

Australia—Sydney, Melbourne, and Brisbane. Similar to 

Spain, the activity in Australia has spawned an industry 

of highway developers, operators, and financiers. These 

private firms are also positioned to provide their services 

across the globe. 

Common Lessons Learned

Preserving the Public’s Interest While 

Attracting Private Participation

Over time, the host nations have learned that their 

highway PPP programs must preserve the public’s 

interest and attract private participation. To some, these 

may be conflicting objectives. Balancing the two for PPP 

projects, however, essentially requires that the state and 

its citizens achieve the following:

◆ Receive a reasonable price 

◆ Obtain a marginal value or benefit 

Likewise, private participants require the following:

◆ Reasonable risk and reward profiles 

◆ Manageable transaction costs

Previous sections of this report have highlighted various 

practices the nations visited use to facilitate these 

outcomes. For instance, public sector project and business 

case analysis methods help identify drivers of life-cycle 

value as well as appropriate risk-allocation strategies. 

Emphasis on project outputs enables public decisionmakers to pinpoint customer needs and target KPIs to satisfy 

those requirements. Competitive procurement processes 

(1) employ phased approaches to filter potential respondents down to a select few or (2) fix project requirements 

and bid parameters to improve transparency and 

accountability while driving down transaction costs. And 

the public sector’s recognition that latent financial gains 

are possible in these sorts of arrangements precludes 

excessive private sector profits and promotes public 

confidence in government. Measures such as these 

prompt the private sector to focus its strengths on finding 

creative and effective solutions for complex projects. 

Viewing Highway PPPs as Enterprises

Over time, the host nations have recognized that highway 

PPPs are enterprises that require a careful combination of 

technical, legal, and commercial conditions. This is fundamentally different from prescribing the requirements for a 

constructed facility, which is typically done in conventional project delivery. Instead, the public sector is granting the private sector the right to initiate and operate an 

enterprise within the bounds of a contract. Accordingly, 

a careful balance must be struck between the project’s 

business and engineering provisions so that the private 

partner can succeed while also satisfying the public 

sector’s objectives.

Building and Continuously Improving Public 

Sector Institutional Capacity

The host nations emphasized the importance of building 

and improving institutional capacity for PPP program 

effectiveness. From business case analysis through handback, PPPs present a variety of challenging tasks for public 

sector officials. As their PPP programs have matured and 

their staff capacity has increased, the host nations have 

relied less heavily on external consultants. This capacity 
50 Chapter 5» PPP Program Performance and Common Lessons Learned

has not been derived simply through experience. Rather, 

deliberate actions such as establishment of best practices 

groups, development of principles and guidelines, and 

creation of standard procedures have all contributed to 

this growth.13 Certainly, the need for complementary 

specialized expertise in areas such as legal and financial 

matters will not cease. However, the institutional infrastructure required to conceptualize, procure, deliver, and 

manage PPP arrangements as they themselves continue to 

evolve is significant. Failure to recognize this could leave 

a public agency overmatched by its private partner.

13 Some of these resources are listed in Appendix E.
Public-Private Partnerships for Highway Infrastructure: Capitalizing on International Experience 51

CHAPTER 6 »

Principal Findings

T he scan team learned a significant amount about 

established PPP programs during its visits with the 

host countries. The diversity among policies and 

practices provided numerous valuable insights. The 

relative maturity of the host nation PPP programs offered 

a rich environment for the collection of useful and tested 

information on PPP policies and practices. This experience 

base provided the team with numerous findings, which 

are organized below into general, project life cycle, and 

additional findings.

General Findings

1. PPPs are generally a modest but critically important 

percentage of the overall highway and roadway 

network. As described previously, only a moderate 

percentage of the overall highway and roadway 

networks are under PPP arrangements. Typically, 

however, the segments that are PPPs are critical 

components of the national or regional system for 

vehicular mobility. For instance, CityLink in 

Melbourne, Australia, is a vital perimeter road that 

provides commuters and freight access into the 

city’s central business district via a high-quality, 

limited-access route.

2. Public agencies in the host countries have faced or 

continue to face challenges similar to those in the 

United States when it comes to providing serviceable highways and roadways. Not a single public 

agency visited indicated that it had a surplus of 

funds available for expansion, restoration, and 

preservation of highway assets. The usual factors—

escalating demands, deteriorating assets, insufficient 

public resources—cause the general scarcity of funds. 

The countries visited have used PPP arrangements 

to leverage private sector investment in highway 

assets, but they are doing so through established 

and credible processes.

3. Significant institutional learning has occurred in 

both the public and private sectors over roughly the 

last decade. Most PPP programs in the countries 

visited began in response to fiscal crises, and the 

private sector was viewed, particularly by politicians, 

as a potential solution. Early PPP arrangements in 

these countries, while well intentioned, did not 

necessarily provide the best value for the public. Since 

that time, the planning, procurement, and management of PPP projects have improved substantially. 

Significant institutional learning was evident in all the 

host nations. This circumstance is advantageous for 

the United States, a late mover in this market, because 

its institutions can adopt tested second- and even 

third-generation policies and practices. 

4. Highway PPP arrangements, particularly in the most 

mature markets, are not primarily financial transactions, but are the selected project delivery strategy 

based on a value-for-money or feasibility analysis. In 

the majority of the countries visited, this perspective 

was either firmly held or gaining traction. For 

instance, the policy in Victoria on any potential 

infrastructure project is that budgetary funds must 

be available to support it for it to be considered for 

inclusion in a capital program. If the potential project 

has the attributes necessary for a PPP, it will be 

evaluated through Victoria’s value-for-money guidelines. Only if the project demonstrates value for 

money as a PPP will it proceed that way. Otherwise, 

the budgetary funds will be used to finance its conventional delivery. In Spain, the philosophy is slightly 

different. If the public sector’s feasibility analysis 

indicates that a PPP approach is viable, highways are 

typically delivered by PPPs. In either case, though, the 

government determines that a PPP arrangement is the 

preferred method of delivery based on a systematic 

methodology.

5. Highway PPP arrangements do not automatically 

require user fees. The scan team found that various 

sources of funds are used throughout the world—

from exclusively real tolls to a combination of real 

tolls and shadow tolls to exclusively shadow tolls 

or direct payment mechanisms (often principally 

availability based). While the user-pays concept 

remains a solid economic argument, the reality is that 
52 Chapter 6» Principal Findings

the sociopolitical environment in other countries, 

as in the United States, is a barrier to widespread 

tolling. 

6. The maximum contract period (or concession period) 

observed was 50 years and most periods ranged from 

30 to 40 years. This is a contrast to several recent 

long-term lease agreements of existing assets with 

periods ranging from 75 to 99 years coupled with large 

upfront payments in the United States. None of the 

countries visited have implemented a model of this 

sort recently. The two primary determinants described 

for the contract period were that (1) the timeframe 

should be long enough for most structures in the 

project to have gone through at least one major 

renovation, and (2) the period must be adequate to 

allow the PPP contractor a reasonable timeframe to 

collect the revenue necessary to obtain its expected 

return on investment.14 

7. All public agencies indicated that PPP arrangements 

allow the delivery of projects sooner than possible 

through conventional channels. This is a common 

refrain among agencies with significant PPP experience. In some cases, this detail is used as a tool to 

promote the PPP approach over traditional delivery 

methods. 

8. One man’s BOOT (build-own-operate-transfer) is 

another’s DBFO (design-build-finance-operate). 

The definitions, acronyms, and nomenclature used 

worldwide for PPPs are far from standard. In lieu of 

trying to keep all of this straight, the key variables to 

consider are what scope of services the private sector 

is being asked to provide (or alternatively how the 

project life cycle activities are organized and packaged) and what source of funds supports the scope 

of services being solicited.

9. The necessary public sector mindset and skills base 

for successful PPP programs and projects differ 

substantially from those needed for conventional 

practices. All of the public agencies visited 

emphasized the significance of these two points and 

indicated the importance of building public sector 

capacity in PPP program management. In Australia, 

Victoria and Queensland have found it beneficial 

to establish temporary, independent authorities to 

manage highway PPP procurements, while Portugal 

created EP specifically to administer concessions. 

A U.K. Highways Agency representative also 

commented that when the Private Finance Initiative 

began, the agency was not “risk averse, but rather 

was risk ignorant.” This circumstance has remedied 

itself with experience and effort.

10. Innovation by the private and public sectors in PPP 

arrangements is evident. In the case of the private 

sector, innovation is typically stimulated by 

competition for the award of an integrated, commercial enterprise (i.e., the right to develop, enhance, 

and manage an infrastructure asset for a finite time 

period). The resulting innovations are generally borne 

out of the integration of design, construction, and 

operation within a single entity and during asset 

utilization. Often, the private sector’s creativity is 

tapped in the nonconforming proposals allowed and 

encouraged during the procurement process. In the 

case of the public sector, innovation is typically driven 

by stewardship of public interests. For instance, the 

EastLink project in Victoria, Australia, has provisions 

to return to the users of the facility a share of any 

debits (penalties) collected from the PPP contractor 

for failure to meet key performance indicators. 

11. A reasonable balance among technical, commercial, 

and legal conditions and terms in a PPP contract is 

integral to its success. While all highway projects are 

engineering efforts, PPP projects are also long-term 

enterprises. As one public official put it, once the 

agency’s engineering staff has established the project’s 

principal technical provisions, it’s a good idea to have 

the agency’s commercial and legal team take them 

for a “road test” to assess their alignment with the 

business dimensions of the project.

12. In general, the representatives of the PPP contractors 

the scan team met with exhibited a focus on their 

customers, an emphasis on life-cycle management 

and value, and a pride in ownership and stewardship of their assets. While the team recognizes that 

these individuals had an interest in behaving this way, 

14 More amenable tax treatment of PPP arrangements abroad also appears to help reduce contract periods.
Public-Private Partnerships for Highway Infrastructure: Capitalizing on International Experience 53

their comments and answers demonstrated that their 

business model depends on these attributes. 

Moreover, if they desire to transfer this business model 

elsewhere, their track record will either enable or 

hinder this transfer.

13. Similarly, public agencies have recognized that a 

PPP arrangement is in fact a long-term partnership 

with the private sector founded on a contract. As 

such, the public sector’s contract management team is 

responsible for sustaining this relationship. Doing so 

may require understanding the spirit as well as the 

letter of the contract. 

Project Life Cycle Findings

These findings follow the chronological order of a PPP 

arrangement’s life cycle—from preliminary project 

planning through project handback:

14. All public agencies emphasized the importance of 

adequate front-end or preliminary planning for a 

project to fully comprehend its business case and 

potential life-cycle value. This is necessary to 

understand what service a potential asset should 

provide and where value is derived. Such comprehension will undoubtedly influence the remaining 

decisions on project delivery, including whether the 

project is a PPP candidate.

15. The two most commonly cited attributes of a 

project that make it a PPP candidate were scale and 

complexity. The scale attribute is necessary to offset 

the transaction costs of PPPs, although variable 

monetary amounts (ranging from $10 million to 

$50 million) were suggested as the minimum scale 

necessary. Complexity is often coupled with scale, 

and this attribute is generally seen as the ingredient 

that enables, or perhaps compels, the private sector 

to find novel or unique project solutions. 

16. When defining or scoping a PPP project, the primary 

focus should be on identifying and conveying the 

outputs desired without inappropriately compromising existing technical standards. Customers focus on 

project outputs—reliable travel times, safe travel 

environment, comfortable ride, etc. Thinking first 

about what customers desire rather than developing a 

prescriptive definition of the asset is a major transition 

in practice. However, an emphasis on defining and 

measuring outputs should not come at the expense of 

sound engineering. Most countries visited still rely on 

existing technical specifications and standards, at least 

to establish baseline technical requirements. 

17. Risk analysis and allocation are paramount to PPP 

project success. Certainly, proper risk allocation is not 

a novel concept, but the public agencies visited with 

significant PPP experience have evolved from 

stressing maximum to reasonable risk transfer in PPP 

arrangements. Indeed, one public official described 

this evolution as a move away from “maximum risk 

transfer to optimal risk allocation.”

18. All public agencies emphasized the need for 

transparency during the procurement process for 

PPP projects. The typical scale and complexity of 

PPP highway projects generate an unusually high 

level of public, political, and media attention. Nearly 

all of the agencies visited go to substantial lengths to 

make project documents and records accessible. More 

often than not, they publish all nonsensitive material 

on multiple government Web sites. In addition, some 

agencies use a public auditor to monitor proceedings. 

A practice such as this is particularly important in a 

procurement process that uses competitive negotiations. Further, most agencies stressed engaging 

citizens throughout the project’s life cycle, from the 

earliest planning stages through the operating phase. 

Particularly, the need to inform the public about how 

to access and use a new facility before its opening 

was highlighted. 

19. The commitment of the government to see PPP 

project procurements through to closure is essential 

to stability in this market. Given the enormous 

transaction costs involved in PPP projects, private 

participants must have confidence that the public 

sector is committed to closing deals expeditiously, 

with rare exceptions. Without this confidence, private 

participants will search for other places to put their 

business development funds at risk.

20. In many of the countries visited, the PPP project 

development time was remarkably efficient. In some 

countries, the entire procurement process, from 

circulation of an environmental document to attainment of financial close, averages 12 months. In such 

cases, the government has clearly done substantial 
54 Chapter 6» Principal Findings

front-end planning. Regardless, this level of efficiency 

is enviable, especially since environmental standards 

and public involvement appear to be embraced.

21. Multiple public agencies claimed that PPP projects 

provide better price and time certainty on design 

and construction when compared to the conventional approach. Several of the countries visited 

indicated that the scale and complexity of and 

competition for PPP contracts generally lead to 

design and construction efficiencies, which result in 

better pricing and scheduling by the private sector. 

In addition, public and third-party studies indicated 

significant advantages in these two areas.

22. Most countries use an independent verifier or 

reviewer to monitor the design and construction 

phases of a PPP project. The independent verifier 

serves as an objective third party to generally administer (certify pay requests, etc.) and review (check 

compliance with requirements, make onsite visits, 

etc.) the project during design and construction. 

The payment schemes and contractual relationships 

used for the independent verifier varied. Victoria, 

Australia, introduced a proof engineer and a construction verifier to augment the independent 

verifier in its second PPP project (EastLink).

23. All countries use key performance indicators (KPIs) 

or performance measures in their PPP contracts to 

assess service, along with incentives and disincentives to motivate contractor performance. KPIs are 

the means for assessing whether the PPP contractor 

is providing the outputs desired from the asset. 

Contractors are usually monetarily rewarded for 

exceeding performance targets or showing positive 

trends, and they are monetarily debited for missing 

performance targets or showing negative trends. In 

one project, the public sector agency has decided to 

distribute any amounts debited from the contractor 

to the highway’s users, since they paid for a level 

of service they did not receive.

24. Practices for managing changes and uncertainty 

throughout the contract period range from rebalancing actions to limited material adverse effect 

impacts. Rebalancing is a significant modification 

process, but it is intended to be applied symmetrically; the conditions can be modified in either the 

public or private sector’s favor. Similarly, material 

adverse effect changes can be quite arduous, but in 

the countries where this approach is taken, the public 

agencies have evolved to substantially limit the 

triggers of such provisions. For instance, in lieu of 

granting zones with protection from competition or 

including no-compete provisions in contracts, the 

agencies have employed a range of techniques for 

handling this issue.

25. Effective PPP contract management is vital to 

maintaining the public sector’s risk posture and to 

sustaining a good working relationship with the PPP 

contractor. The public agency’s contract manager must 

understand the line between risk liability and risk 

transfer when interacting with the PPP contractor on 

issues. Further, the contract manager must recognize 

that the PPP contractor is likely his or her counterpart 

for the better part of 30 years, so keeping the bigger 

picture in perspective is more important than a petty 

disagreement or discrepancy. 

26. Handback provisions appear to necessitate good 

asset management practices by the private sector, 

but the handback process is generally untested in 

the countries visited. Typically, the handback 

provisions specify residual service lives for the 

different elements of a facility, such as pavements, at 

the end of the contract’s term. Undoubtedly, this is 

easier said than done. Many skeptics also worry that 

private contractors will permit the assets to gradually 

deteriorate and then attempt to renovate them to the 

minimum standard just before the end of the contract. Several comments a private operator made to 

the scan team might calm such concerns. First, the 

private contractor wants customers to use the asset, 

so it has an implicit incentive to maintain it. Second, 

and perhaps more important, delaying timely routine 

maintenance and performing major renovations 

toward the end of the contract period when traffic 

volume is stable and likely at its peak would disrupt 

this cash flow. Finally, the escalating cost of deferred 

maintenance is also a deterrent to poor asset 

management practices. 

Additional Observations

27. None of the public officials or private participants 

consulted had direct experience with the handback 

provisions or processes for a PPP contract, even 
Public-Private Partnerships for Highway Infrastructure: Capitalizing on International Experience 55

though some countries, such as Spain, have had 

concessions expire.

28. Business development costs of PPP proposals are 

substantial for both the public and private sectors.

29. Tax benefits appear to be gained more easily by PPP 

contractors abroad. This is likely due to accounting 

practices that focus more on the risk held relative to an 

asset than on the control and ownership held relative 

to an asset.

30. Selection criteria used for award of PPP contracts are 

generally similar across the countries visited.

31. Most countries visited still rely on existing technical 

specifications and standards in PPP arrangements, at 

least as a means to establish baseline technical 

requirements.

32. Fully electronic toll collection is common abroad, 

which improves throughput and efficiency.

33. Some countries use innovative performance 

measures for highway safety, which has reportedly 

improved crash and fatality rates.

34. Spain, in particular, is considering extending 

concession periods as an incentive or reward for PPP 

contractors that consistently meet or exceed required 

service levels.
56
As the team debated its recommendations and 

implementation actions during the final meeting 

of the scanning study, an important question 

arose: “What’s the end game here?” Put differently, what 

principal outcome should this scanning study and its 

implementation strategies facilitate? After discussion, the 

team agreed that the overarching outcome desired is the 

pervasive use of a project development process in which 

state and local highway agencies select an effective project 

delivery system from a range of options that includes 

PPPs. An effective project delivery system is defined as 

one that provides the greatest benefits to society and 

meets the objectives of government. 

The recommendations and implementation actions that 

follow are geared toward this end.

Short-Term Actions

1. Convene executive workshops at which representatives from countries visited or elsewhere speak 

directly to public and private sector decisionmakers. 

Providing information to both decisionmakers 

(executives) and those implementing the programs 

(directors or staff members) will benefit State DOTs. 

2. Develop training guidelines for PPP program 

managers, procurement officers, contract managers, 

and financial and legal specialists that State DOTs can 

use to tailor development and training programs to 

their own needs.

3. Encourage FHWA to convert the scan team into an 

expert task group to implement scan findings.

4. Encourage AASHTO to establish a group focused on 

PPPs, perhaps as a section of one of its subcommittees. 

Implementing this recommendation will allow the 

discussion on the development of PPPs to stay active 

and involve stakeholders at all levels of AASHTO, 

State DOTs, and FHWA. 

5. Create a set of state-of-the-practice publications that 

further highlight the lessons learned from the 

scanning study and possibly expand the scope of 

inquiry to include other nations not studied. Issues 

such as business case development and analysis, 

value-for-money and risk analysis, procurement 

processes, contract provisions, change management, 

etc., are all important topics for these publications to 

address.

6. Develop comparative case studies of representative 

projects, past and current, that highlight maturing 

and evolving policies and practices. For instance, 

the Victoria government has developed two 

projects, CityLink and EastLink. An indepth review 

of the project specifics, lessons learned, procurement 

changes, and program evolution would meet 

one of the principal objectives of the scanning

study.

Midterm Actions

7. Develop a strategy to facilitate research in the 

following areas:

a. Investigate advantages and disadvantages of 

alternative organizational forms for PPP divisions.

b. Examine methods for identifying and analyzing 

candidate PPP projects.

c. Investigate the evolution and effectiveness of 

KPIs.

d. Investigate the risk mitigation practices of the 

private sector in PPP arrangements to determine if 

private participants assume real levels of risk.

e. Investigate the determinants of concession length 

both domestically and abroad.

f. Evaluate methodologies for establishing and 

managing toll structures.

g. Investigate and identify appropriate metrics for 

assessing the benefits and costs of PPP programs 

Public-Private Partnerships for Highway Infrastructure: Capitalizing on International Experience 57

CHAPTER 7 »

Implementation Strategy
58 Chapter 7» Implementation Strategy

and projects and overall PPP program and 

project performance.

Long-Term Actions

8. Develop and publish principles and guideline documents that update or complement existing documents 

that are similar in nature, such as the following:

a. Establishing a PPP program

b. Identifying and evaluating candidate PPP projects

c. Procuring PPP projects

d. Creating PPP contracts

e. Managing PPP contracts

f. Measuring PPP program and project performance
(a)MES Intervenção Operacioinal dos Transportes (1999). Public-Private Partnerships, MES Intervenção Operacioinal dos 

Transportes, Lisbon, Portugal.

(b) Spanish Institute of Foreign Trade (2006). Industry Reports: Road Infrastructure Concessions in Spain, Madrid.

(c) Austroads (1998). Private Sector Financing of Roads: Review of the Major Australian Toll Roads, Austroads Publication 

No. AP–131/98, Sydney.

(d) New South Wales. Parliament. Joint Select Committee on the Cross City Tunnel (2006). Cross City Tunnel: 

First Report, Parliament, Sydney.

(e) Vassallo, J.M. and Gallego, J. (2005). “Risk Sharing in the New Public Works Concession Law in Spain,” Transportation 

Research Record No. 1932, Transportation Research Board of the National Academies, Washington, DC, 1–8.

(f) Committee of Public Accounts (2003). Delivering better value for money from the Private Finance Initiative, 

Twenty-Eighth Report of the 2002-03 Session, House of Commons, London.

(g) State Government of Victoria (2003). Mitcham-Frankston Freeway Project: Request for Proposal Overview Document,

Melbourne.

(h) State Government of Victoria (2004). Concession Deed: Mitcham-Frankston Freeway, Melbourne.

Public-Private Partnerships for Highway Infrastructure: Capitalizing on International Experience 59

Endnotes
60
Public-Private Partnerships for Highway Infrastructure: Capitalizing on International Experience 61

APPENDIX A »

Scan Itinerary

Date(s) Location Meetings With Organizations Site Visits

June 14–15, 2008 Travel to Portugal

June 16 Lisbon, Portugal Estradas de Portugal, S.A.5

Brisa2

Brisa Traffic Control 

Center

June 17–18 Madrid, Spain Polytechnic University of Madrid3

Communidad de Madrid1

Madrid Calle-302

Madrid Centro Financiero4

Ministerio de Fomento1

Calle-30 Highway

M-45

M-12

June 19–20 London, United 

Kingdom

Highways Agency1

Department of Transport1

None

June 20–22 Travel to Australia

June 22 Team Midscan Meeting

June 23 Sydney, Australia Roads and Traffic Authority, New South Wales1

Treasury, New South Wales1

Cross City Tunnel

Sydney Harbour 

Tunnel

Lane Cove Tunnel

M-2 Motorway

June 24 Sydney, Australia Infrastructure Insight2

Infrastructure Partnerships Australia4

Leighton Contractors2

Allens Arthur Robinson2

Macquarie Capital Advisers2

Parsons Brinckerhoff2

Thiess2

Transurban2

None

June 25–26 Melbourne, 

Australia

VicRoads, Victoria1

Partnerships Victoria, Department of Treasury and Finance1

East-West Transport Link1

Southern and Eastern Integrated Transport Authority1

CityLink Motorway

EastLink Motorway

June 27 Brisbane, 

Australia

Main Roads, Queensland1

Infrastructure, Queensland1

Infrastructure and Planning, Queensland1

AirportLink/Northern Busway1

North-South Bypass 

Tunnel

June 28 Team Final Scan Meeting

June 29 Travel to United States

1

government or public agency, 2private company/concessionaire, 3university, 4professional or trade organization, 5state-owned 

enterprise/concessionaire
62
Introduction

T he following questions provide detail on the topics 

of interest outlined in the Panel Overview of 

December 2007. We hope these questions can serve 

as a framework for the discussions for our visit in June 2008. 

Wherever possible, we ask that you answer the questions 

directly or provide examples of successes and failures in the 

topical area. Example contracts or contract language from 

successful projects will also be helpful. We would also like 

to visit one of your projects for a portion of our discussions.

Environment for Public-Private 

Partnerships

General Context

1. Generally describe the key aspects of how transportation project delivery is positioned within the political, 

economic, and technological structure of your country. 

Please comment on items such as owner structure, 

market structure, market competition, and the roles 

and responsibilities of the other primary stakeholders 

in the transportation life cycle.

Traditional Financing

2. Please describe the traditional means of funding 

highway projects in your country.

a. What are the annual funding needs for new 

capacity projects and network maintenance?

b. What funding is available from traditional sources 

(e.g., taxes, fees), and what is the gap between 

funding availability and the needs for capacity 

building and maintenance?

Private Financing

3. Please describe the funding of highway projects in 

your country through public-private partnerships.

a. What proportion of the highway network is 

funded through public-private partnerships?

b. Does the public sector provide incentives in 

public-private partnerships (e.g., partial funding, 

tax benefits, subsidies, tax-exempt financing)?

c. Are there other governmental incentives (e.g., to 

build in undeveloped or economically depressed 

areas, to support economic development)?

d. Are other innovative public and/or private 

financing mechanisms available?

e. How is the initial tolling scheme of the facility 

developed and how are future toll increases 

indexed and presented to the users?

Original Program Development

4. Please describe the issues and challenges encountered 

in the original development of your public-private 

partnership program.

a. What were the original motivations for the use of 

public-private partnerships?

b. What major issues did your country or agency 

need to confront to develop the program?

c. How was the initial enabling legislation developed 

and who was involved (e.g., private sector, other 

agencies at the national, state, and local levels)?

d. Were external societal or nontransportationoriented goals imposed on the development of 

public-private partnerships (e.g., minimum wage 

standards, economic redevelopment, obligations 

treated as off-budget)?

Public and Political Perception

5. Please describe the public and political perception of 

the program in your country.

a. Has there been strong public support or 

opposition for public-private partnerships at any 

particular time during the life of the program?

Public-Private Partnerships for Highway Infrastructure: Capitalizing on International Experience 63

APPENDIX B »

Amplifying Questions
64 Appendix B» Amplifying Questions

b. What have been the similarities and any significant differences in public expectations of the 

government and the private sector facilities?

c. What educational tools for ongoing programs 

have you found successful to inform citizens and 

legislators of the benefits of public-private 

partnerships?

Workforce Issues

6. Please describe how public-private partnerships have 

changed the traditional program of highway delivery 

and maintenance.

a. What resources have been transferred from the 

public sector to the private sector?

b. What is your organizational structure for 

developing and administering public-private 

partnerships (e.g., how many people participate, 

what disciplines are involved, to whom does 

this group report)?

Project Procurement and Contracting

Project Selection

7. Please describe the process used to identify and assess 

potential projects for the program.

a. What processes do you use for valuation of 

potential projects?

b. Do you use a “public sector comparator?” If so, is 

it required for each project? Is it revisited after the 

project is complete?

c. What is the normal concession period (number of 

years) and how is it determined?

d. Do you use public-private partnerships on smaller 

projects with local jurisdictions?

e. How does the project selection relate to the overall 

transportation planning process (e.g., land use, 

economic development, environmental)?

Project Delivery

8. Please describe the process for delivering the 

project from concept through the completion 

of construction.

a. What is the general length of time from project 

concept to completion and how does this compare 

with public sector-delivered projects?

b. What phases of the project (e.g., project concept, 

environmental analysis, design, right-of-way 

acquisition, construction, finance, operation and 

maintenance) are normally handled by the public 

and private sectors?

c. How do you handle environmental compliance 

for public-private partnership projects in which 

the public investment is limited or nonexistent? 

Is this an issue? Is it the same or different than 

projects with substantial public funding?

Risk Analysis and Risk Management

9. Please describe the primary elements of risk associated 

with a public-private partnership.

a. Please describe the most significant risk elements 

of your contracts (e.g., actual traffic volume, 

environmental compliance, hazardous materials, 

changes in law, force majeure) and how they are 

either mitigated or managed.

b. How are risk allocation and the transference of 

risk between parties determined?

Project Procurement

10. Please describe the procedures of a competitive 

solicitation, evaluation, and selection of a 

developer or private partner.

a. How do various solicitation procedures and 

contract provisions successfully attract investors?

b. How much of the project scope do you define and 

how much innovation do you allow the private 

sector to initiate during procurement?

c. What are your criteria and weighting factors 

for procurements and how are they 

determined?
Public-Private Partnerships for Highway Infrastructure: Capitalizing on International Experience 65

d. What agency resources are needed to adequately 

evaluate public-private partnerships?

e. Do you engage planning and financial partners for 

groups of projects (e.g., corridors or ring roads) 

rather than single projects?

Project Agreement/Contract

11. Please describe the significant contract terms and 

conditions and whether they are dictated in the 

solicitation or negotiated among the parties.

a. What policies and procedures have you 

developed to reduce the negotiation process?

b. What is the process for contract modifications and 

how do they vary between projects?

c. Do you use performance or prescriptive 

specifications for pavements and structures?

Project Operation, Maintenance, and Closeout

12. Please describe the performance standards you 

measure and monitor.

a. What performance standards do you include in 

your procurement documents? 

b. What is the organizational structure for project 

monitoring (e.g., independent engineers)?

c. Are performance points used to track the progress 

of the concessionaire? If so, how does the system 

work?

d. What are the usual remedies for poor service? 

Have you defaulted a concessionaire for poor 

service?

e. What are your dispute resolution or arbitration 

procedures?

13. Please describe your handback requirements at the 

end of the concession.

a. What are the evaluation and rehabilitation 

requirements at the time of handback?

Overall Program Performance

14. Please describe how your project delivery process 

evolved over time.

a. How has your public-private partnership program 

become integrated into your overall transportation planning process?

b. Have you conducted comprehensive studies that 

compare the performance of your traditional 

projects versus your public-private partnership 

projects?

c. What have you changed in your processes, 

procedures, and requirements and why?

Benefits, Challenges, and Lessons 

Learned

15. Please provide any general lessons learned and tips 

for success as public-private partnerships begin to 

grow in the United States.

a. What is your definition of a successful concession 

during the term and after the term?
66
Contact Information

Public-Private Partnerships for Highway Infrastructure: Capitalizing on International Experience 67

APPENDIX C »

Scan Team Members

Janice Weingart Brown

(FHWA Cochair)

Division Administrator

Federal Highway Administration 

Texas Division

300 East 8th St., Suite 826 

Austin, TX 78701

Telephone: (512) 536-5901

Fax: (512) 536-5990

E-mail: janice.brown@dot.gov

Robert Pieplow

(AASHTO Cochair)

Chief, Division of Engineering 

 Services

California Department of 

 Transportation

1801 30th St., MS 9-5/6JA

PO Box 168041

Sacramento, CA 95816-8041

Telephone: (916) 227-8800

Fax: (916) 227-8251

E-mail: bob_pieplow@dot.ca.gov

Dr. Michael J. Garvin

(Report Facilitator)

Associate Professor

Myers-Lawson School of Construction

Virginia Tech 

310A Bishop-Favrao Hall

Blacksburg, VA 24061-0188

Telephone: (540) 808-9177

Alternate Administrative Office: (540) 

231-3804

Fax: (540) 231-7339

E-mail: garvin@vt.edu

Roger L. Driskell

Bureau Chief, Engineer of 

 Construction

Illinois Department of Transportation

2300 South Dirksen Parkway, 

 Room 322

Springfield, IL 62764

Telephone: (217) 782-6667

Fax: (217) 524-4922

E-mail: roger.driskell@illinois.gov

Stephen J. Gaj

Team Leader, System Management 

 & Monitoring Team

Federal Highway Administration

Office of Asset Management, 

 HIAM-10, Room E75-330

1200 New Jersey Ave., SE

Washington, DC 20590

Telephone: (202) 366-1336

Fax: (202) 366-9981

E-mail: stephen.gaj@dot.gov

Dusty L. Holcombe

Assistant Director, Innovative Project 

 Delivery

Virginia Department of Transportation

1401 East Broad St.

Richmond, VA 23219

Telephone: (804) 786-3173

Fax: (804) 786-7221

E-mail: dusty.holcombe@vdot.

 virginia.gov

Michael T. Saunders

Program Manager for Public-Private 

 Partnerships

Federal Highway Administration

HOA-3, Room E84-306

1200 New Jersey Ave., SE

Washington, DC 20590

Telephone: (202) 366-4816

Fax: (202) 266-7499

E-mail: michael.saunders@dot.gov

J. Jeffrey Seiders, Jr.

Director, Materials and Pavements 

 Section

Construction Division

Texas Department of Transportation

125 East 11th St.

Austin, TX 78701-2483

Telephone: (512) 506-5808

Fax: (512) 506-5812

E-mail: jseider@dot.state.tx.us

Arthur L. Smith

Chairman, National Council for 

 Public-Private Partnerships

President, Management Analysis 

 Incorporated

2070 Chain Bridge Road, Suite 505

Vienna, VA 22182

Telephone: (703) 506-0505, ext. 205

E-mail: asmith@mainet.com
68 Appendix C» Scan Team Members

Biographic Information 

(at Time of Scanning Study)

Janice (Jan) Weingart Brown (FHWA cochair)

is the division administrator for the Texas Division of the 

Federal Highway Administration (FHWA). As a key 

member of the agency’s leadership team, Brown provides 

executive management expertise in the oversight and 

stewardship of the federally funded highway program in 

Texas. She directs operations of the Texas Division, which 

provides technical and program assistance to Texas for 

improvements to the State’s transportation network, 

including the border connections that support increased 

international movement of freight between the United 

States and Mexico. She provides assistance in the use of 

public-private partnerships to help fund needed transportation improvements. Before becoming Texas Division 

administrator, Brown served for 11 years as FHWA’s 

Montana Division administrator. Before that, she served as 

assistant division administrator in the Nevada Division 

and district engineer in Washington State. Brown earned a 

bachelor’s degree in civil engineering from the University 

of Connecticut and a master’s degree in transportation 

policy, operations, and logistics from George Mason 

University in Virginia. She is a licensed professional 

engineer in Washington State. 

Robert (Bob) Pieplow (AASHTO cochair) is an 

engineering manager for the California Department of 

Transportation (Caltrans) in Sacramento, CA. Pieplow is 

the division chief for the Division of Engineering Services 

(DES). DES is a division of 2,000 employees and performs 

a variety of engineering services, including geotechnical 

investigations, structures design, earthquake engineering, 

materials engineering and testing, and construction 

management, and advertises and awards more than 

$2.5 billion in construction contracts each year. Before his 

current assignment, Pieplow served as the chief of the 

Division of Construction for Caltrans, overseeing the 

policy and direction of a construction program with 600 

active construction contracts valued at more than $10.5 

billion. Projects included the east span replacement of the 

San Francisco-Oakland Bay Bridge, which features a 

signature self-anchored suspension span. During his 

tenure in construction, he led the development and 

implementation of several innovative construction contract provisions, including A+B bidding, flexible beginning 

of work, time-related overhead bid item, and alternative 

dispute resolution processes. In addition, Pieplow worked 

with the insurance and construction industries to reduce 

insurance and bonding barriers for small businesses and 

implement an owner-controlled insurance program 

(OCIP). Pieplow is a graduate of California Polytechnic 

State University, San Luis Obispo. He is a licensed 

professional engineer in California. 

Dr. Michael J. Garvin (report facilitator) is an 

associate professor in the Myers-Lawson School of 

Construction at Virginia Polytechnic Institute and State 

University (Virginia Tech). His research and education 

pursuits are geared toward improving how institutional 

owners—such as departments of transportation, 

universities, and Federal agencies—program, finance, 

and deliver projects. His current research projects are 

developing decision support systems for portfolio-level 

investment decisions, improving risk mitigation strategies for infrastructure projects in which private finance is 

at risk, and identifying best practices for public-private 

partnership (PPP) arrangements through case-based 

research. Garvin is a 2004 recipient of the Presidential 

Early Career Award for Scientists and Engineers 

(PECASE), which is the highest honor bestowed by the 

U.S. government on outstanding scientists and engineers 

beginning their independent careers. He also recently 

completed service on the National Research Council’s 

Committee for Core Competencies for Federal Facilities 

Asset Management, is a member of the American Society 

of Civil Engineers’ (ASCE) Construction Research 

Council and Infrastructure Systems Committee, is on the 

editorial board of the journal Public Works Management & 

Policy, and is a specialty editor for the case studies 

division of the ASCE Journal of Construction Engineering 

and Management. He has authored or coauthored more 

than 30 journal articles, conference papers, and book 

chapters. His professional experience includes military 

service as an officer in the U.S. Army Corps of Engineers 

(1989 to 1993), practice as a consulting civil engineer 

(1995 to 1998), and faculty positions at both Columbia 

University (2001 to 2005) and Virginia Tech (2005 to 

present). He received a bachelor’s degree in civil 

engineering from the United States Military Academy 

in 1989, a master’s degree in civil engineering from the 

Massachusetts Institute of Technology (MIT) in 1995, and 

a Ph.D. in construction engineering and management 

from MIT in 2001. 

Roger L. Driskell is the engineer of construction for 

the Illinois Department of Transportation (IDOT) in 
Public-Private Partnerships for Highway Infrastructure: Capitalizing on International Experience 69

Springfield, IL. Driskell oversees the development of 

construction policies, engineering and documentation 

reviews, prequalification of contractors, contractor pay 

estimates, and construction change authorizations for the 

department’s nearly $2 billion annual construction 

program. In addition, he has been IDOT’s lead in review 

and investigation of alternative contracting methods, 

including public-private partnerships and design-build. 

Driskell has been with IDOT 23 years, working primarily 

in construction as a resident engineer and supervising 

field engineer and in design as a squad leader, project 

engineer, and policy engineer responsible for the department’s design manual, specifications, and standards. 

Driskell graduated from Southern Illinois University at 

Edwardsville with a bachelor’s degree in engineering. 

He is a licensed professional engineer in Illinois and 

serves on the American Association of State Highway 

and Transportation Officials’ Subcommittee on 

Construction, chairing the Environmental and 

Human Resources Section.

Stephen J. Gaj is leader of the System Management 

and Monitoring Team of the FHWA Office of Asset 

Management in Washington, DC. He is responsible for 

promoting asset management, a strategic approach to 

managing transportation infrastructure, which includes 

better decisionmaking based on quality information. Asset 

management encourages the integration of traditional 

engineering applications and management systems and 

the use of economic analysis tools to monitor and analyze 

the performance of highway assets. This work includes 

refining and advancing the application of pavement, 

bridge, roadway safety hardware, and other management 

systems. Gaj has been with FHWA since 1981. He previously worked in FHWA’s Office of International Programs, 

Construction and Maintenance Division, and Maryland 

and Michigan Divisions, as well as on several assignments 

in FHWA’s Highway Engineer Training Program. He has a 

bachelor’s degree in civil engineering from the University 

of Massachusetts–Dartmouth and a master’s degree in 

civil engineering from Clemson University.

Dusty L. Holcombe is assistant director of the 

Innovative Project Delivery Division for the Virginia 

Department of Transportation (VDOT) in Richmond, 

VA. Holcombe administers VDOT’s Public-Private 

Transportation Program, which is responsible for the 

procurement, negotiation, and execution of publicprivate partnership agreements for transportation 

facilities. His duties involve developing policies, 

contractual documents, and procedures that create a 

competitive procurement environment and allow for the 

execution of agreements with the private sector. Before 

joining VDOT, Holcombe worked in the private sector 

for Sverdrup Civil, an international professional 

engineering firm. Holcombe is a graduate of the 

Virginia Polytechnic Institute and State University 

and holds a master’s degree in urban and environmental planning from the University of Virginia. He is a 

member of the American Society of Highway Engineers 

and has spoken at several public-private partnership 

seminars and conferences. 

Michael T. Saunders is FHWA’s program manager 

for public-private partnerships (PPP). As such, he 

provides technical assistance on the Federal requirements 

associated with PPPs and coordinates the review of PPPs 

for FHWA. Saunders has worked in transportation for 

more than 25 years. His positions include assignments 

with FHWA in transportation planning and project 

development, as a program administrator with the 

Organization for Economic Cooperation and Development, as deputy commissioner of the Connecticut 

Department of Transportation, and as manager of the 

Federal Railroad Administration’s Northeast Corridor 

Program Office. He is a graduate of Trinity College and 

has master’s degrees in urban and environmental 

planning from the University of Virginia and in civil 

engineering from Michigan State University.

J. Jeffrey Seiders is the director of the Materials and 

Pavements Section of the Construction Division for the 

Texas Department of Transportation (TxDOT) in Austin, 

TX. Seiders oversees and manages departmental material 

specifications (including structural steel and precast/

prestressed products) and test procedures (including 

quality assurance programs and testing activities for 

construction and maintenance). Seiders received a 

bachelor’s degree in architectural engineering from 

the University of Texas at Austin in 1980. He joined the 

engineering staff of Trinity Engineering Testing Corp., 

where his responsibilities included construction materials 

testing, structural investigations, and project oversight 

for foundation construction. In 1984, he joined 

Porter-Donoghue Consulting Engineering (PDCE), 

where he performed the structural design and 

construction administration for several projects ranging 

from low- to medium-rise buildings. In 1987, he began 
70 Appendix C» Scan Team Members

his career with the TxDOT Materials and Tests Division. 

His responsibilities progressed from staff engineering 

functions to Structural Section manager. Seiders has 

served as a leader for several departmental task forces 

and committees and is a registered professional 

engineer in Texas.

Arthur (Art) L. Smith is chair of the U.S. National 

Council for Public-Private Partnerships. He is also U.S. 

representative to and vice chair of the United Nations 

Economic Commission for Europe’s (UNECE) Team of 

Specialists on Public-Private Partnerships. Smith serves 

as a consultant and lecturer on PPPs for organizations 

such as the United Nations Development Program, 

UNECE, Asian Development Bank, International Law 

Institute, and national governments. He was a primary 

author of the UNECE publication Governance in PublicPrivate Partnerships for Infrastructure. Smith provided 

analysis in support of the Czech government’s voucher 

privatization program and managed a project funded by 

the United States Agency for International Development 

to identify the costs of potable water in Albania. He has 

PPP experience on five continents and is the author of 

more than 30 articles on public-private partnerships, 

published in six languages. Smith has served with the 

consulting firm of Management Analysis, Inc., since 

1977 and has been president since 1995. Smith holds a 

bachelor’s degree and a master’s degree in technology 

management from the University of Maryland.
Portugal

Estradas de Portugal, S.A.

Carla Barradas

Manager, International Relations 

 Bureau

Estradas de Portugal

Praca Da Portagem

2809-013 Almada, Portugal

Telephone: +351 212 879 281

E-mail: carla.barradas@

 estradasdeportugal.pt

Tiago Cortez

Director, Business and Development

Estradas de Portugal

Praca Da Portagem

2809-013 Almada, Portugal

Telephone: +351 212 879 475

E-mail: tiago.cortez@

 estradasdeportugal.pt

Rui Manteigas

Director

Estradas de Portugal

Praca Da Portagem

2809-013 Almada, Portugal

Telephone: +351 212 879 935

E-mail: rui.manteigas@

 estradasdeportugal.pt

José Diogo Madeira

Member, Administration Board

Estradas de Portugal

Praca Da Portagem

2809-013 Almada, Portugal

Telephone: +351 212 879 015

E-mail: jose.madeira@

 estradasdeportugal.pt

Brisa

Luís Delgado

International Development Manager

Brisa

Quinto de Torre da Aguilha

Edificio Brisa

2785-599 São Domingos de Rana, 

Portugal

Telephone: +351 21 444 85 97

E-mail: luis.delgado@brisa.pt

Manuel Eduardo Lamego

Head of Business Development

Brisa

Quinto de Torre da Aguilha

Edificio Brisa

2785-599 São Domingos de Rana, 

Portugal

Telephone: +351 21 444 86 67

E-mail: manuel.lamego@brisa.pt

Spain

Universidad Politécnica de 

 Madrid

Dr. Antonio M. Lopez

 Corral

Professor, Polytechnic University 

 of Madrid

Escuela de Ingenieros de Caminos

Calle Profesor Aranguren

Ciudad Universitaria

28040 Madrid, Spain

Telephone: 91 336 6849

E-mail: alopezcorral@telefonica.net

Dr. Samuel Carpintero

 López

Polytechnic University of Madrid

Escuela de Ingenieros de Caminos

Calle Profesor Aranguren

Ciudad Universitaria

28040 Madrid, Spain

Telephone: 636 467 749

E-mail: scarlop@ciccp.es

Dr. Antonio Sánchez 

 Soliño

Polytechnic University of Madrid

Escuela de Ingenieros de Caminos

Calle Profesor Aranguren

Ciudad Universitaria

28040 Madrid, Spain

Telephone: 91 401 96 92

E-mail: asanoli@ciccp.es

Comunidad de Madrid

José Antonio Llanos

 Blasco

Comunidad de Madrid

Orense 60

28020 Madrid, Spain

Telephone: 915 802 911/791

E-mail: jantonio.llanos@madrid.org

Madrid Calle-30

José del Pino Álvarez

Madrid Calle

C/Mendez Alvaro, 95

Centro de Control de Tuneles M-30

28053 Madrid, Spain

Telephone: 914 886 843

E-mail: delpinoaj@mc30.es

Public-Private Partnerships for Highway Infrastructure: Capitalizing on International Experience 71

APPENDIX D »

Host Country Contacts
72 Appendix D» Host Country Contacts

Jesús Jiménez Alen

Madrid Calle

C/Mendez Alvaro, 95

Centro de Control de Tuneles M-30

28053 Madrid, Spain

Telephone: 914 583 020

E-mail: jimenezaj@mc30.es

José Ignacio Iturbe López

Madrid Calle

C/Mendez Alvaro, 95

Centro de Control de Tuneles M-30

28053 Madrid, Spain

Telephone: 915 391 236

E-mail: iturbeijl@mc30.es

Ministerio de Fomento

Gerardo L. Gavilanes

 Ginerés

Director of the Division for Economic 

 Consultancy

Ministerio de Fomento

Paseo de la Castellana, 67

28071 Madrid, Spain

Telephone: +34 91 597 81 87

E-mail: ggavilanes@mfom.es

Jesus Fernández Silva

Ministerio de Fomento

Paseo de la Castellana, 67

28071 Madrid, Spain

Telephone: +34 91 597 51 01

E-mail: jsilva@mfom.es

ICEX

Javier García

Department of Technology and 

 Projects

Spanish Institute for Foreign Trade

Paseo de la Castellana 14-18

28046 Madrid, Spain

Telephone: +34 91 349 63 90

E-mail: j.garcia@icex.es

Madrid Centro Financiero

Isabel Martin Castllá

Managing Director

Madrid Centro Financiero

Telephone: +34 91 399 75 81

E-mail: isabel.martin@imade.es

United Kingdom

Highways Agency 

(or Representative)

Richard Abadie

Global Head of PPP Advisory

PriceWaterhouseCoopers

1 Embankment Place

London WC2N 6RH, 

United Kingdom

Telephone: +44 (0)20 7213 3225

E-mail: richard.abadie@uk.pwc.com

Simon Amor

Traffic Operations

Highways Agency

Woodlands, Manton Lane

Manton Industrial Estate

Bedford MK41 7LW, United Kingdom

Telephone: 01234 796158

E-mail: simon.amor@

 highways.gsi.gov.uk

Michael Charles

Network Operations

Manton Lane, Manton Industrial 

 Estate

Bedford MK41 7LW, United Kingdom

Telephone: 01234 796528

E-mail: michael.charles@

 highways.gsi.gov.uk

Ginny Clarke

Chief Highway Engineer

Safety, Standards & Research 

 Directorate

Highways Agency

5th Floor, 123 Buckingham 

 Palace Road

London SW1W 9HA, 

 United Kingdom

Telephone: 020 7153 4779

E-mail: ginny.clarke@

 highways.gsi.gov.uk

Ellen Gates

Partner

Denton Wilde Sapte

One Fleet Place

London EC4M 7WS, 

 United Kingdom

Telephone: +44 (0)20 7242 1212

E-mail: ellen.gates@

 dentonwildesapte.com

Jim Hughes

Group Financial Controller

Highways Agency

Telephone: +44 (0)207 153 4703

E-mail: jim.hughes@

 highways.gsi.gov.uk

Ken Petch

Senior Manager

Highways Agency

5 Broadway, Broad Street

Birmingham B15 1BL, 

 United Kingdom

Telephone: 0121 678 8451

E-mail: ken.petch@

 highways.gsi.gov.uk

Dave Sledge

Departments Representative

Highways Agency

E-mail: dave.sledge@

 highways.gsi.gov.uk
Public-Private Partnerships for Highway Infrastructure: Capitalizing on International Experience 73

Catherine Steele

Team Leader, PFI Policy

Highways Agency

Woodlands

Manton Lane, Manton Industrial 

 Estate

Bedford MK41 7LW, United Kingdom

Telephone: 01234 795160

E-mail: catherine.steele@

 highways.gsi.gov.uk

Mike Wherrett

Network Performance Manager

Traffic Operations East & East 

 Midlands Division

Highways Agency

Woodlands

Manton Lane, Manton Industrial 

 Estate

Bedford MK41 7LW, United Kingdom

Telephone: 01234 796219

E-mail: mike.wherett@

 highways.gsi.gov.uk

Tony Wittering

Group Manager, Procurement

Woodlands

Manton Lane, Manton Industrial 

 Estate

Bedford MK41 7LW, United Kingdom

Telephone: 01234 796017

E-mail: tony.wittering@

 highways.gsi.gov.uk

Department of Transport

Colin Goodwillie

Corporate Finance Adviser

Corporate Finance Directorate

Department for Transport

Great Minster House, 76 Marsham St.

London SW1P 4DR, United Kingdom

Telephone: 020 7944 8018

E-mail: colin.goodwillie@

 dft.gsi.gov.uk

Nick Joyce

Project and Infrastructure Finance

Corporate Finance Directorate

Department for Transport

Great Minster House, 76 Marsham St.

London SW1P 4DR, United Kingdom

Telephone: 020 7944 4190

E-mail: nick.joyce@dft.gsi.gov.uk

New South Wales, 

Australia

Roads and Traffic Authority

Mark Andrew

Project Services Manager, Highway 

 Procurement

Roads and Traffic Authority

Level 4, Tower A, Centennial Plaza

260 Elizabeth St.

Surry Hills, New South Wales 2010, 

Australia

Telephone: 02 9218 6225

E-mail: mark_andrew@

 rta.nsw.gov.au

Paul Goldsmith

General Manager, Motorway Projects

Roads and Traffic Authority

Level 1, Tower A, Centennial Plaza

260 Elizabeth St.

Surry Hills, New South Wales 2010, 

 Australia

Telephone: 02 9218 6579

E-mail: paul_goldsmith@

 rta.nsw.gov.au

Brian Watters

Director, Major Infrastructure

Roads and Traffic Authority

Level 6, Tower A, Centennial Plaza

260 Elizabeth St.

Surry Hills, New South Wales 2010, 

 Australia

Telephone: 02 9218 3553

E-mail: brian_watters@rta.nsw.gov.au

Department of Treasury

Danny Graham

Director, Privately Financed Projects 

 Branch

New South Wales Treasury

Level 26, Governor Macquarie Tower

1 Farrer Place

Sydney, New South Wales 20000, 

Australia

Telephone: 02 9228 3213

E-mail: danny.grahm@

 mail.treasury.new.gov.au

Private Industry

Wendy Adam

Project Manager

Parsons Brinckerhoff

Level 27, Ernst & Young Centre

680 George St.

Sydney, New South Wales 2001, 

 Australia

Telephone: +61 2 9275 5121

E-mail: wadam@pb.com.au

Stephen Allen

Executive Director

Macquarie Capital Advisers

No. 1 Martin Place

Sydney, New South Wales 2000, 

Australia

Telephone: +61 2 8232 4025

E-mail: stephen.allen@

 macquarie.com

Robert Bartlett

Commercial Affairs Manager, 

 CityLink

Transurban

Level 3, 505 Little Collins St.

Melbourne, Victoria 3000, Australia

Telephone: +61 (0)3 8656 8693

E-mail: rbartlett@transurban.com
74 Appendix D» Host Country Contacts

Brendan Donohue

General Manager, NSW/ACT

Thiess

Level 5, 26 College St.

Sydney, New South Wales 2000, 

Australia

Telephone: (02) 9332 9444

E-mail: bdonohue@thiess.com.au

Peter Hicks

General Manager, Infrastructure 

 Investment

Leighton Contractors

Level 8, Tower 1, 495 Victoria Ave.

Chatswood, New South Wales 2067, 

Australia

Telephone: +61 2 8668 6622

E-mail: peter.hicks@leicon.com.au

Garry Humphrey

Director

Infrastructure Insight

PO Box 1121

Epping, New South Wales 1710, 

Australia

Mobile: 0412 206 306

E-mail: garry.humphrey@

 infrastructureinsight.com.au

Dr. Gul Izmir

Strategic Consulting

Parsons Brinckerhoff

Level 27, Ernst & Young Centre

680 George St.

Sydney, New South Wales 2001, 

Australia

Telephone: +61 2 9272 5330

E-mail: gizmur@pb.com.au

Brendan Lyon

National Manager, Public Affairs

Infrastructure Partnerships Australia

8th Floor, 8-10 Loftus St.

Sydney, New South Wales 2000, 

Australia

Telephone: +81 2 9240 2084

E-mail: brendan.lyon@

 infrastructure.org.au

John Munro

Tunnels System Executive

Parsons Brinckerhoff

Level 27, Ernst & Young Centre

680 George St.

Sydney, New South Wales 2000, 

Australia

Telephone: +61 2 9272 5438

E-mail: jmunro@pb.com.au

Leighton O’Brien

Partner

Allens Arthur Robinson

Telephone: 61 2 9230 4205

E-mail: leighton.obrien@aar.com.au

Brett Skinner

General Manager, Australian Market

Transurban

Level 37 Gateway, 1 Macquarie Place.

Sydney, New South Wales 2000, 

Australia

Telephone: +61 (0)2 9254 4949

E-mail: bskinner@pb.transurban.com

Victoria, Australia

VicRoads

Peter Bettess

Manager, CityLink

VicRoads

60 Denmark Street

Kew, Victoria 3101, Australia

Telephone: +61 3 9655 8769

E-mail: peter.bettess@

 roads.vic.gov.au

Department of Treasury and 

Finance

David Asteraki

Director, Commercial Division

Department of Treasury and Finance

Level 5, 1 Treasury Place

Melbourne, Victoria 30002, Australia

Telephone: (03) 9651 0755

E-mail: david.asteraki@dtf.vic.gov.au

Richard Foster

Executive Manager, Commercial 

 Division

Department of Treasury and Finance

Level 5, 1 Treasury Place

Melbourne, Victoria 30002, Australia

Telephone: (03) 9651 2221

E-mail: richard.foster@dtf.vic.gov.au

East-West Transport Link

John Matthews

East-West Transport Link

Level 49, 80 Collins St.

Melbourne, Victoria 3000, Australia

Telephone: (03) 9095 4418

E-mail: john.matthews@

 doi.vic.gov.au

Southern and Eastern 

Integrated Transport 

Authority

Brad Akers

Director, Commercial & Legal

SEITA

Building 1, Level 1, Brandon Business

 Park

540 Springvale Rd.

Glen Waverley, Victoria 3150, 

 Australia

Telephone: +61 3 8562 6829

E-mail: brad.akers@doi.vic.gov.au
Public-Private Partnerships for Highway Infrastructure: Capitalizing on International Experience 75

Michael de Vries

Manager, Legal Services

SEITA

Building 1, Level 1, Brandon Business 

Park

540 Springvale Rd.

Glen Waverley, Victoria 3150, 

 Australia

Telephone: +61 3 8562 6814

E-mail: michael.devries@

 doi.vic.gov.au

Ken Mathers

Chief Executive Officer

SEITA

Building 1, Level 1, Brandon Business 

 Park

540 Springvale Rd.

Glen Waverley, Victoria 3150, 

 Australia

Telephone: +61 3 8562 6828

E-mail: ken.mathers@doi.vic.gov.au

Ian McLennan

Assistant Director, Commercial

SEITA

Building 1, Level 1, Brandon Business 

Park

540 Springvale Rd.

Glen Waverley, Victoria 3150, 

 Australia

Telephone: +61 3 8562 6830

E-mail: ian.mclennan@doi.vic.gov.au

Queensland, Australia

Department of Main Roads

Tom Baskerville

Executive Director (Policy & Strategic

 Advice)

Queensland Government

Department of Main Roads

Floor 4, 85 George Street

Brisbane, Queensland 4000, Australia

Telephone: +61 7 3306 7077

E-mail: mr.ed.stratpol@

 mainroads.qld.gov.au

Raymond Matta

Acting Manager (Trade & Industry 

 Relations)

Queensland Government

Department of Main Roads

Floor 3, 85 George Street

Brisbane, Queensland 4000, Australia

Telephone: +61 7 3306 7288

E-mail: ray.z.matta@

 mainroads.qld.gov.au

Russell Murray

Manager (Financial & Commercial)

Queensland Government

Department of Main Roads

Floor 3, 260 Queen St.

Brisbane, Queensland 4000, Australia

Telephone: +61 7 3997 8364

E-mail: russel.r.murray@

 mainroads.qld.gov.au

Frank Vardanega

General Manager, Capability, Strategy

 & Finance

Queensland Government

Department of Main Roads

Floor 10, 85 George Street

Brisbane, Queensland 4000, Australia

Telephone: +61 7 3306 7373

E-mail: mr.gm.csf@

 mainroads.qld.gov.au

Kathy Vu

Advisor (Trade & Industry Relations)

Queensland Government

Department of Main Roads

Floor 3, 85 George Street

Brisbane, Queensland 4000, Australia

Telephone: +61 7 3306 7290

E-mail: kathy.k.vu@

 mainroads.qld.gov.au

Queensland Government 

(or Representatives)

Lloyd Arnott

Group Advisory Leader

Connell Wagner

Level 1, 433 Boundary St.

Spring Hill, Queensland 4004, 

Australia

Telephone: +61 7 3155 8386

E-mail: arnottl@conwag.com

Neal Johnston

Executive Director, Transaction 

 Advisory Services

Ernst & Young

Ernst & Young Centre

680 George St.

Sydney, New South Wales 2000, 

Australia

Telephone: +61 2 9248 4247

E-mail: neal.johnston@au.ey.com

David Lester

Partner

Clayton Utz

Level 28, Riparian Plaza

71 Eagle St.

Brisbane, Queensland 4000, Australia

Telephone: +61 7 3292 7000

E-mail: dlester@claytonutz.com

Peter Papantoniou

Director, Commercial and Legal

Airport Link/Northern Busway

Telephone: 07 3237 7416

E-mail: peter.papantoniou@

 cni.gld.gov.au
76 Appendix D» Host Country Contacts

Steve Richards

Executive Director, Infrastructure, 

Evaluation & Procurement

Queensland Government

Department of Infrastructure and 

 Planning

Level 5, Executive Building, 100 

 George St.

Brisbane, Queensland 4000, Australia

Telephone: +61 7 3033 0658

E-mail: steve.richards@

 infrastructure.qld.gov.au

John Seed

Principal, Advisory Services

Connell Wagner

118 Military Rd.

Neutral Bay, New South Wales 2089, 

Australia

Telephone: +61 2 9465 5406

E-mail: seedj@conwag.com

Craig Stevens

Director, Infrastructure Evaluation & 

 Procurement

Queensland Government

Department of Infrastructure

Level 5, Executive Building, 100 

George St.

Brisbane, Queensland 4000, Australia

Telephone: +61 7 3033 0658

E-mail: craig.stevens@

 infrastructure.qld.gov.au

Mark Wilde

Head of Government Services, 

 Queensland

Ernst & Young

Waterfront Place

Level 5, 1 Eagle St.

Brisbane, Queensland 4000, Australia

Telephone: +61 73011 3398

E-mail: mark.wilde@au.ey.com

Southbank Institute of 

Technology

Craig Sherrin

Institute Director

Southbank Institute of Technology

Block C, Level 7, 66 Ernest St.

South Brisbane, Queensland 4101, 

Australia

Telephone: +61 7 3244 5500

E-mail: sbit.director@deta.qld.gov.au

Norm Jagger

Project Director

Southbank Institute of Technology

Locked Mail Bag 14

South Brisbane, Queensland 4101, 

Australia

Telephone: +61 7 3244 5506

E-mail: norm.jagger@deta.qld.gov.au
(This list includes only Web sites in English.)

Australia

http://www.infrastructure.gov.au/department/

infrastructureaustralia/

An organization in the federal government created to 

assess and coordinate Australia’s national infrastructure 

needs.

http://www.infrastructure.org.au/

An industry group promoting the use of PPPs in Australia.

New South Wales

http://sydneymotorways.com/about.html

Site provides information about each toll road in Sydney, 

including toll rates.

http://www.treasury.nsw.gov.au/wwg

Site includes state government guidelines and contract 

summaries for PPP projects under the NSW Projects tab.

http://www.parliament.nsw.gov.au/crosscitytunnel

Site provides documentation from the Parliamentary 

inquiry into the Cross City Tunnel (and the Lane Cove 

Tunnel), including reports of findings and government 

responses. 

Victoria

http://www.partnerships.vic.gov.au/domino/web_notes/

PartVic/PVWeb.nsf

Home page for Partnerships Victoria; the Policy & Guidelines link includes several documents such as an overview 

of Victoria’s PPP policy and its PPP contract management 

policy, a practitioners guide and a contract management 

guide, and technical notes about the use of public sector 

comparators.

http://www.vicroads.vic.gov.au/Home/

RoadsAndProjects/RoadNetwork/

VicRoads site provides an overview of Victoria’s road 

network, including information about funding and 

managerial responsibility.

United Kingdom

http://hm-treasury.gov.uk/ppp_index.htm

HM Treasury site provides information about PPPs and 

PFI, including policy documents and project information.

http://www.nao.org.uk/practice_areas/private_finance/

index.htm

Site provides information about National Audit Office’s 

inquiries into PFI policies and projects.

http://hm-treasury.gov.uk/ppp_standardised_

contracts.htm

HM Treasury site provides information about the 

standardization of PFI contracts.

http://www.highways.gov.uk/business/14156.aspx

Highways Agency site provides links to the agency’s 

Network Management Manual and Routine and Winter Service 

Code, as well as model contract documents.

Public-Private Partnerships for Highway Infrastructure: Capitalizing on International Experience 77

APPENDIX E »

Web Sites of Interest


Publication No. FHWA-PL-09-010 HPIP/03-09(3.5)EW

OFFICE OF INTERNATIONAL PROGRAMS

FHWA/US DOT (HPIP)

1200 New Jersey Ave., SE

Washington, DC 20590

Tel: (202) 366-9636

Fax: (202) 366-9626

international@fhwa.dot.gov

www.international.fhwa.dot.gov