How is WSDOT’s new PPP program different from the prior program (1992 – 2004)?
The old Public/Private Initiatives in Transportation (PPIT) program (1992-2004) was phased out with the passage of the new law in 2005. See PPP History in Washington.
The new PPP law (“Transportation Innovative Partnerships Act of 2005” codified as Chapter 47.29 RCW) is different in several respects. Some key differences:
- Allows transportation-related projects and programs of all modes to be eligible for development as a public-private partnership under the Transportation Innovative Partnership Program (TIPP);
- Requires WSDOT to assess potential projects and, for those that demonstrate basic feasibility, publish a registry of projects that the state intends to develop as public/private partnerships;
- For transportation projects funded with toll revenues, any bonded indebtedness must be state-issued debt;
- Citizen advisory committees must be convened for projects that cost in excess of $300 million.
A more complete description of the effects of the new PPP law can be found in the final bill report for SHB 1541.
Are PPP’s the primary method for developing toll projects in Washington State?
No. Although the state’s public/private partnership law, RCW 47.29, would allow PPP’s for toll projects, this is not the primary or preferred method for advancing toll projects in the state. In fact, the current PPP law restricts the manner in which toll revenues could be used to finance construction of a transportation project.
When the Legislature enacted a new public/private partnership law in 2005, it also directed the Transportation Commission to conduct a Statewide Tolling Study aimed at addressing the question of when it’s appropriate to impose tolls on public highways. That study effort was broken into two distinct phases and ultimately resulted in recommended policies for when tolls should be used on state highways. In 2008, the Legislature codified most of these statewide tolling policies by passing E2SHB 1773.
WSDOT has organized both its toll planning and toll operations activities to reflect the policies enacted in the 2008 Statewide Tolling policy legislation and in the 2005 Public/Private Partnership law. Decisions about when, where and under what conditions tolls will be imposed on highway facilities are ultimately legislative decisions. Toll rate setting is governed by the Washington State Transportation Commission. Toll facility planning, construction, operations and maintenance are the responsibility of WSDOT. The use of highway toll revenues for financing construction is ultimately determined by the state legislature, with WSDOT providing analysis and the State Treasurer’s Office optimizing the financial structure of publicly-issued debt.
Public/private partnerships can play an important role in project procurement and delivery. Design/build contracting methods are one such example. Also, with ever-changing market conditions affecting the financing capabilities of both private banks and government, alternative methods of financing transportation projects must be continually examined. If alternative financing techniques presents an opportunity to stretch the public’s dollars, that case can be made to legislative and executive branch officials. Analysis and assessment of PPP financing options is one of the Transportation Partnerships Office’s primary responsibilities.
What is a “commercially confidential” meeting?
The Transportation Partnerships Office routinely meets with both public and private sector individuals to exchange ideas and information about how a partnership might advance important transportation projects. To better understand the business needs of potential partners, we encourage information-sharing and, in return, ensure that any proprietary information discussed will not be shared or disclosed without prior approval or permission.
During these commercially confidential meetings, please make sure that any written materials shared are clearly marked “proprietary” or “confidential” if they are to remain restricted.
Proposals that are formally submitted to the Transportation Commission under the TIP Program are subject to the public disclosure laws that apply to that program and to state government generally. This is true for both solicited proposals (where the state has invited the submission of proposals under an RFP or RFQ process) and unsolicited proposals that are initiated by a prospective partner.
Must all PPP projects be developed under the TIP program?
Not all transportation partnership projects must be developed under the TIP Program. In some instances, WSDOT has legal authority to enter into agreements with other public or private partners to develop transportation projects. Recent examples of public/private partnerships developed under other statutory powers include land leases with cellular phone companies, management of for-pay parking facilities, and retail restaurant and other commercial enterprises at ferry terminals. Whether a public/private partnership project is best developed under the TIP Program or under other statutory authority depends on the specifics of the project (size, nature, scope, etc.) and other laws, rules, and executive orders that could affect the project.