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Keep NEVADA Moving - The Pioneer Program

Public-Private Partnerships

A public-private partnership, also known as a PPP or P3, is a contractual agreement between a government agency and a private entity that allows for greater private sector participation in the design, construction, operations, maintenance, and/or financing of transportation projects.

These partnerships often include a greater assumption of risk by the private partner, rather than taxpayers, along with specific performance and quality assurances to the taxpayer.

Public-private partnerships can range from projects in which NDOT works with a private developer to enhance roadway safety, access, and mobility with a new interchange, rest area, maintenance/communications center, roadway lighting or other road improvement to agreements in which the private partner designs, constructs, finances, operates, and maintains a publicly-owned facility for a period of years.

 

An Alternative Funding Source

In the traditional model of building and improving transportation facilities, projects can only be constructed as state or federal revenue becomes available (often called “pay as you go”). These needed projects are often phased over time, resulting in additional costs, delayed construction, extended traffic congestion inconveniences, and slower delivery of beneficial projects to the public.

Public-private partnerships, and in particular toll facilities, provide an opportunity to improve Nevada transportation and commerce NOW by using private sector capital to leverage limited public funds. The timely and efficient delivery built into such partnerships can significantly reduce the time and cost to provide the road improvements Nevada citizens need.

 

Benefits of Public-Private Partnerships

Enhanced Mobility / New Reliable Travel Choices

By providing needed transportation options such as new or expanded lanes, roads or interchanges, public-private partnerships can give drivers more options for reliable, safe travel they can trust to safely get them where they are going with greater certainty. These expanded travel options can lessen traffic demands on existing roadways; thus helping move Nevada.

New Funding Source

Public-private partnerships utilize private capital to help deliver needed transportation improvements that may not otherwise be funded.

Project Cost and Time Savings

With accelerated funding from private partners, projects can be put in place years ahead of when they might otherwise be, providing needed transportation improvements sooner and reducing inflationary costs.

Public-private partnership agreements often require construction be completed within defined timeframes and costs, helping shield taxpayers from cost overruns and delays.

Whole-Life Efficient and Cost-Effective Transportation Facilities

The private partner can be responsible for the financing, design, construction, operation, and/or maintenance of the project in accordance with state standards, incentivizing them to build and operate the most efficient, cost-effective facility. Strict requirements ensure proper stewardship of the public facility so it is returned to the state in good condition when the partnership ends.

Reduced Public Risk and Responsibility

The private partner takes primary responsibility for timely delivery, operations, and maintenance of a quality project and assumes greater financial risks, thus lifting some of these potential burdens from taxpayers.

Public-private partnerships can also often offer access to innovation, economies of scale, specialized expertise and technology not otherwise readily available to public agencies.

Users Pay

For toll facilities, those who use a new road, lanes or transportation facility help pay for its construction and upkeep. Non-users also benefit through reduced traffic on non-tolled facilities. In situations where excess revenue exists, revenue sharing with the private sector can be implemented with the state’s share available to build other much-needed transportation facilities.

Job Creation and Economic Boost

The U.S. Department of Transportation reports that every $1 billion invested in transportation infrastructure creates or sustains more than 34,000 jobs. Independent studies in Nevada show an economic gain of approximately $1.50 for every $1 invested in transportation. Access to private capital not only helps build needed public roads, it supports jobs and economic growth.

 

 

Why Public-Private Partnerships?

Every year, approximately 2 billion miles are traveled in Nevada amid an irregular, slow traffic flow or gridlock.

For many years, Nevada’s population skyrocketed as the fastest-growing state in the nation.  The effects of previous population growth and the economic downturn have created a multibillion-dollar transportation funding deficit. In addition, state gasoline taxes are not keeping pace with road construction, maintenance, and operations needs. Given the ongoing federal highway trust fund insufficiencies and the federal deficit, the lack of federal transportation funds is also expected to be a long term reality.