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Title:

The Efficiency Claim of Public-Private Partnerships: A Look into Project Operations and Maintenance Costs.
Cover of The Efficiency Claim of Public-Private Partnerships: A Look into Project Operations and Maintenance Costs.

Accession Number:

01557085

Record Type:

Component

Availability:

Transportation Research Board Business Office

500 Fifth Street, NW
Washington, DC 20001 United States

Abstract:

While the literature on public-private partnerships (PPPs) argues that the private sector’s life- cycle approach to design and construction results in operational cost efficiencies, empirical support is missing. This study explored that issue conducting a four-prong investigation: First, a literature review searched for evidence of such efficiencies and methodologies to evaluate them: it found no empirical evidence of superior operations and maintenance (O&M) cost-efficiency in PPPs. Second, a simple methodology is proposed to evaluate life-cycle cost-efficiency, but adequate data and assumptions about O&M costs are needed. Third, since PPP projects in the U.S. are recent and currently subject to routine O&M, indicators to compare those costs were proposed. Fourth, a case study compared the routine O&M costs of a PPP to those of a system of traditionally delivered toll roads. The results showed that the PPP was more cost-efficient in operating expenditures (OPEX) per mile (-60%) and per lane-mile (-53%). The traditional system was more cost-efficient in OPEX per vehicle miles travelled (97%), toll transactions (332%), and toll revenue (20%). However, those three indicators depend on traffic volumes, which were overwhelmingly greater on the traditional system. While the case study showed cost- efficiency differences between public and private sectors, additional research is needed to empirically test the hypothesis of the private sector’s higher efficiency. Understanding the differences in cost-efficiency between publicly and privately managed roads will help decision- makers to minimize the life-cycle cost of their investments.

Supplemental Notes:

This paper was sponsored by TRB committee AHD10 Maintenance and Operations Management.

Monograph Accession #:

01550057

Report/Paper Numbers:

15-5792

Language:

English

Corporate Authors:

Transportation Research Board

500 Fifth Street, NW
Washington, DC 20001 United States

Authors:

Martinez, Sergio E
Walton, C Michael

Pagination:

21p

Publication Date:

2015

Conference:

Transportation Research Board 94th Annual Meeting

Location: Washington DC, United States
Date: 2015-1-11 to 2015-1-15
Sponsors: Transportation Research Board

Media Type:

Digital/other

Features:

Figures; References; Tables

Subject Areas:

Administration and Management; Highways; Maintenance and Preservation; Policy; I10: Economics and Administration; I60: Maintenance

Source Data:

Transportation Research Board Annual Meeting 2015 Paper #15-5792

Files:

PRP, TRIS, TRB, ATRI

Created Date:

Dec 30 2014 1:56PM