Relative Performance of Public-Private Partnerships and Conventional Project Delivery During Crises

As the COVID-19 pandemic is demonstrating, crises can dramatically alter the conditions under which transportation infrastructure projects develop and operate. In particular, crises can modify economic markets by reducing transportation user demand, limiting government budgets, and constraining private investors. Because Public-Private-Partnership (P3) and conventionally delivered projects typically employ differing funding and financing strategies, crisis may influence these two project categories differently. P3 projects typically involve partnerships between private concessionaires (private sector) and federal, state, or local governments (public sector). Unlike conventional projects that are typically constructed using general obligation funds, dedicated tax revenues, and/or government debt, P3 projects typically receive the bulk of their upfront financial resources via private equity and private/public debt. As a result, P3 approaches can shift financial risks from the public to the private sector. Given the risky nature of large-scale transportation infrastructure development, such risk transfer potential supplies a key motivation behind many governments’ use of P3 delivery approaches. Since P3 and conventionally delivered transportation projects can demonstrate widely divergent public-private risk transfer profiles, their financial indicators may also differ, especially during times of crisis. Consequently, this research aims to evaluate whether the financial health of P3 and conventional projects differ during times of crisis. Whether public-sector risk-taking reduces a project’s cost of capital remains subject to debate. From the investor’s perspective, projects backed by the public sector’s full-faith and credit, taxing power, and revenue pledges might present less risk during crisis compared to projects financed solely by the private investment market. The difference between a P3 project and a conventionally financed project during a crisis would provide a market-based indicator of the value of the risks retained by the public sector. Such retained risks are often not explicitly considered in the discussion of delivery options. As a result, the proposed research will pursue three objectives: (1) Describe how crises have influenced transportation infrastructure projects in modern U.S. history. (2) Track dynamic changes in financial markets for P3 and conventional debt during times of crisis. For the purposes of this research, a crisis must apply either nationally or globally. Regional crises like weather events require a different, more localized response, and hence are excluded from this research scope. (3) Draw conclusions about the relative impact of conventional and P3 projects under crisis conditions. The research findings will inform policymakers how project delivery approaches affect risk allocation during crises.


    • English


    • Status: Active
    • Funding: $177376
    • Contract Numbers:


    • Sponsor Organizations:

      Office of the Assistant Secretary for Research and Technology

      University Transportation Centers Program
      Department of Transportation
      Washington, DC  United States  20590
    • Managing Organizations:

      Center for Integrated Asset Management for Multimodal Transportation Infrastructure Systems (CIAMTIS)

      Pennsylvania State University
      University Park, PA  United States  16802
    • Project Managers:

      Donnell, Eric

    • Performing Organizations:

      George Mason University

      School of Engineering
      CEIE Dept., MSN-6C1
      Faifax, VA  United States  22030
    • Principal Investigators:

      Gifford, Jonathan

      Casady, Carter

    • Start Date: 20211028
    • Expected Completion Date: 20230428
    • Actual Completion Date: 0
    • USDOT Program: University Transportation Centers

    Subject/Index Terms

    Filing Info

    • Accession Number: 01848090
    • Record Type: Research project
    • Source Agency: Center for Integrated Asset Management for Multimodal Transportation Infrastructure Systems (CIAMTIS)
    • Contract Numbers: 69A3551847103
    • Files: UTC, RIP
    • Created Date: Jun 6 2022 5:38PM