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Introduction

COMPARATIVE EVALUATION OF PUBLIC-PRIVATE PARTNERSHIPS IN ROADWAY PRESERVATION Panagiotis Ch. Anastasopoulos , Ph.D. Mouyid Bin Islam, Ph.D. Candidate Matthew Volovski, Ph.D. Candidate Jarrett Powell, MSCE Samuel Labi, Ph.D. 97 th Annual Purdue Road School

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Introduction

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  1. COMPARATIVE EVALUATION OF PUBLIC-PRIVATE PARTNERSHIPS IN ROADWAY PRESERVATIONPanagiotis Ch. Anastasopoulos, Ph.D.Mouyid Bin Islam, Ph.D. CandidateMatthew Volovski, Ph.D. CandidateJarrett Powell, MSCESamuel Labi, Ph.D.97th Annual Purdue Road School March 8-10, 2011, West Lafayette, Indiana

  2. Introduction Global changes in Roadway Preservation Seeking new contracting methods: Reduce overall costs Manage risks Improve level of service Problem: Should an agency adopt a PPP? If so, which PPP approach? How to implement the PPP? Objective/Scope of this Study: Performance comparison of different contracting approaches Cost savings likelihood and intensity Framework for PPP evaluation Comparative Evaluation of Public-Private Partnerships in Roadway Preservation 97th Annual Purdue Road School, March 8-10, 2011, West Lafayette, Indiana

  3. PPP Approaches PPPs in transportation: contractual agreements between public agencies and private sector to allow for greater private participation in delivery of transportation projects Project Delivery Approaches: In-house Traditional (Design-Bid-Build) Design-Build (-Operate-Maintain-Warrant-etc.) Warranties Cost-plus-Time (A+B Bidding) and Incentives/Disincentives (I/D) Lane Rentals Performance-Based Contracting (PBC) Comparative Evaluation of Public-Private Partnerships in Roadway Preservation 97th Annual Purdue Road School, March 8-10, 2011, West Lafayette, Indiana

  4. Some Pros & Cons Comparative Evaluation of Public-Private Partnerships in Roadway Preservation • Traditional • Design-Bid-Build • Most Popular Method • Contractors are paid for what they “do” Advantages : • “This is how we‘ve been doing it !” • Cost savings • Better Quality • Limitations : • Sluggish mechanism • Risk managed by the Agencies • Dispute on produced quality Design Contractor 1 Construct Contractor 2 97th Annual Purdue Road School, March 8-10, 2011, West Lafayette, Indiana

  5. Some Pros & Cons (cont.) Comparative Evaluation of Public-Private Partnerships in Roadway Preservation • Design-Build (-Operate-Maintain-Warrant) • D-B Advantage/Limitation : • Reduction in the overall project duration Same Contractor Design Construct Maintain Lower Quality 97th Annual Purdue Road School, March 8-10, 2011, West Lafayette, Indiana

  6. Some Pros & Cons (cont.) Comparative Evaluation of Public-Private Partnerships in Roadway Preservation • Warranties • If the product fails, the contractor has to repair and/or replace the product • Lane Rental • Agency charges the Contractor with a fee (hourly, daily, etc.) for lane closure Warranties Advantages : • High Quality to reduce future maintenance and repair costs Warranties Limitations : • Contractors refuse to use Warranties because of high risk • Lane Rental Advantages : • Very high CMO* time reduction • Lane Rental Limitations : • Lack of experience *CMO = Construction/Maintenance/Operation 97th Annual Purdue Road School, March 8-10, 2011, West Lafayette, Indiana

  7. Some Pros & Cons (cont.) Comparative Evaluation of Public-Private Partnerships in Roadway Preservation • Cost-Plus-Time (A+B Bidding) A+B Bidding Advantages : • Overall completion time reduction (due to I/D) A+B Bidding Limitations : • Because of the time dimension, few contractors bid I/D *CMO = Construction/Maintenance/Operation 97th Annual Purdue Road School, March 8-10, 2011, West Lafayette, Indiana

  8. Some Pros & Cons (cont.) Comparative Evaluation of Public-Private Partnerships in Roadway Preservation • Performance-Based Contracting (PBC) • Minimum conditions of road assets have to be met by the contractor • Payments (uniform, per year) are based on the level that the contractor meets the performance standards (PS) • PBC Advantages • Life Cycle Cost reduction • Quality improvement • PBC Limitations • Lack of experience • Not adequate PS => No desired results 97th Annual Purdue Road School, March 8-10, 2011, West Lafayette, Indiana

  9. Criterion for Evaluation - Cost Savings Comparative Evaluation of Public-Private Partnerships in Roadway Preservation • How do we determine Cost Savings? where, • %CS is the percent cost savings of the PPP contracting approach under consideration, relative to the corresponding in-house approach • CA is the cost of project carried out using a PPP contracting approach • CB is the cost of a similar project carried out in-house 97th Annual Purdue Road School, March 8-10, 2011, West Lafayette, Indiana

  10. Data and Estimation Issues Comparative Evaluation of Public-Private Partnerships in Roadway Preservation • Data from 570 contracts let or completed in US and abroad: • in Africa, Asia, Europe, North and South America, and the Pacific • between 1996 and 2007 (inclusive) • The data were collected from internet resources and a number of transportation agencies in the US and abroad • Project costs were converted and expressed in 2006 USD prices (Price Trends for Federal-Aid Highway Construction) • Spatial transferability between US and international contracts ? YES (using likelihood ratio tests) 97th Annual Purdue Road School, March 8-10, 2011, West Lafayette, Indiana

  11. Comparative Evaluation of Public-Private Partnerships in Roadway Preservation Model Results • 14 Models • 7 Binary Probit Models predicting the Likelihood of Cost Savings (1 for each PPP approach) • 7 Linear Regression Models predicting the Intensity of Cost Savings calculated as a percentage (1 for each PPP approach) 97th Annual Purdue Road School, March 8-10, 2011, West Lafayette, Indiana

  12. Comparative Evaluation of Public-Private Partnerships in Roadway Preservation Model Results • Significant Factors Affecting Cost Savings Likelihoods and Amounts: • Contract duration • Contract length • In-house cost • Activities: • Bridge-Tunnel • Culvert-Gutters-Drainage • Pavement repair • Crack sealing • Pothole repair • Shoulder repair • Guardrail repair • Illumination/Electrical system maintenance • Landscape or vegetation/ control • Litter removal • Rest areas maintenance • Mowing • Emergency facilities maint. 97th Annual Purdue Road School, March 8-10, 2011, West Lafayette, Indiana

  13. Comparative Evaluation of Public-Private Partnerships in Roadway Preservation Paradigms 97th Annual Purdue Road School, March 8-10, 2011, West Lafayette, Indiana

  14. Comparative Evaluation of Public-Private Partnerships in Roadway Preservation Paradigms(cont.) 97th Annual Purdue Road School, March 8-10, 2011, West Lafayette, Indiana

  15. Comparative Evaluation of Public-Private Partnerships in Roadway Preservation Paradigms(cont.) 97th Annual Purdue Road School, March 8-10, 2011, West Lafayette, Indiana

  16. Framework for PPP implementation Comparative Evaluation of Public-Private Partnerships in Roadway Preservation 97th Annual Purdue Road School, March 8-10, 2011, West Lafayette, Indiana

  17. Framework for PPP implementation (cont.) Comparative Evaluation of Public-Private Partnerships in Roadway Preservation 97th Annual Purdue Road School, March 8-10, 2011, West Lafayette, Indiana

  18. Conclusions and Future Work Important to have a plan when going for a PPP Cost Savings can be achieved by some PPP approaches under certain conditions Need for better explanation of the factors affecting the likelihood and amount of PPP cost savings Need to study the level of service under different PPP approaches Comparative Evaluation of Public-Private Partnerships in Roadway Preservation 97th Annual Purdue Road School, March 8-10, 2011, West Lafayette, Indiana

  19. Thank You! COMPARATIVE EVALUATION OF PUBLIC-PRIVATE PARTNERSHIPS IN ROADWAY PRESERVATIONPanagiotis Ch. Anastasopoulos, Ph.D.Mouyid Bin Islam, Ph.D. CandidateMatthew Volovski, Ph.D. CandidateJarrett Powell, MSCESamuel Labi, Ph.D.97th Annual Purdue Road School March 8-10, 2011, West Lafayette, Indiana ACKNOWLEDGEMENTS This work was supported by the Joint Transportation Research Program administered by the Indiana Department of Transportation (DOT) and Purdue University, and the Nextrans Center. The authors thank the following executives for providing contract data and for useful information: Mike Bowman, Scott Trammel, John Burkhardt, Todd Shields, Scott Newbolds, Joe Lewien, Mark Miller, John Morton, Bill Tompkins and Dennis Belter of INDOT, Frank T. Richards of Alaska DOT, Susan J. Berndt, Hope Jensen, Nancy Worline and Steven Lund of Minnesota DOT, Lance Davis, Audry Reeves and Steve Foskey of Polk County, Florida, Larry Buttler, Tammy Booker Sims, Bob Blackwell and Kerry Hardy of Texas DOT, Diane L. Mitchell, Dick Kiefer, Roy A. Thacker and Robert Prezioso of Virginia DOT, Gary Stebbins from E+B Paving Inc., Ted Lucas from Milestone, Stove Koble from Brooks Construction Co., and Keith Rose from Rieth-Riley. The authors also thank Kumares C. Sinha, Fred L. Mannering, SrinivasPeeta, Bob G. McCullouch, Gunter Zietlow, and PekkaPakkala for their helpful suggestions and comments. The contents of this paper reflect the views of the authors, who are responsible for the facts and the accuracy of the data presented herein, and do not necessarily constitute a standard, specification, or regulation.

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