1. Highway Users Perspectives on Public-Private Partnerships Gregory Cohen, P.E. American Highway Users Alliance for AASHTO Annual Meeting Palm Desert, CA October 24, 2009 gregcohen@highways.org www.highways.org

2. Background  Highway Users include  AAA clubs  Trucking associations & companies  Motorcyclists and Recreational Users  Bus Companies  Businesses with Private Fleets  Rural Orgs / Farmers  Businesses who rely on hwy customers  All of these groups are represented by us on PPP and tolling issues

3. Diversity of PPPs  Parallel toll roads to relieve congested, untolled roads (SR91, SR73 - California)  New capacity to developing areas (Dulles Greenway, VA)  Leases (Chicago & Indiana)  HOT lane conversions (I-95/395 in Northern Virginia)  “Public-Public Partnerships” (I-80 in Pennsylvania & New Jersey Tpke proposals)  Shadow tolling, privatized transit, etc.

4. Highway Users’ Interests  Fair user fees  Congestion relief / System Reliability  Excellent safety  Confidence in bridge/pavement quality  Real-Time Traveler Information  Being treated like a valued customer  Streamlined project delivery

5. Different PPPs Reflect Different Attention to Public Interests  Hwy Users Involvement in PPP Negotiations  #1 PPP/tolling priority for AAA  Toll/pricing schedule and fairness  Market-based, capped, public rate-setting  Local vs. Through Traffic  Who benefits: tolled-users or others?  Level-Of-Service Guarantee  Maintenance Guarantee

6. Public Interests (continued)  Safety on facility and nearby routes  Non-compete agreements  Public use of revenues from PPP agreement  To improve the tolled facility?  To improve the corridor?  To improve State roads?  To use for other government needs  Length of lease, renegotiation and oversight  Revenue Sharing from Tolling  Effects on Disadvantaged Population  Impact on Interstate Hwy Sys and NHS

7. Recent History  Chicago Skyway & Indiana Toll Road PPPs surprise many – debate over “leasing” PPPs begins  Peters’ US DOT: Fully embrace PPPs & tolls  Model leg. lacked public interest protection  Discretionary Funding  “Support for all PPPs”  Seen as an alternative to federal funding  Congressional Backlash  Most extreme: Threat to “undo” PPPs  More likely: Scaling back of tolling pilots and federal oversight and disapproval authority

8. Commissions  National Surface Transportation Policy and Revenue Commission:  Supports PPPs & a larger federal program  Opposes Leasing existing capacity  Supports PPPs on new capacity  National Transportation Infrastructure Finance Commission  VMT tax to ultimately replace gas tax  Detailed chapter on tolls and PPPs with strong support for tolling except on rural interstates  Support for PPPs but detailed discussion on public interest protection needs.

9. STAA 2009  Establishes Office of Public Benefit  Director appointed by the Secretary will provide leadership and technical assistance to protect the public interest on toll and PPP projects  Administer toll agreements under 23 USC 129  Restricts use of tolls on federal-aid highways  Bans non-compete clauses  Requires public comment periods  Monitor compliance of agreements  Report to Congress

10. Points of Broad Agreement  States need more money to improve safety and deal with aging and inadequate roads and bridges  Motorists/truckers are willing to pay more for better systems  With tight funds, it is extremely difficult in many States to build major new roads without innovative financing  Developed carefully, the interests of your customers can be well served by PPPs and tolling  Developed poorly, the interests of your customers can be ignored or harmed by PPPs and tolling

11. Public Interest Questions 1.What is the primary purpose of the PPP?  To build new capacity or to monetize an existing road to raise money quickly. 2.If the goal is to raise money, how will it be spent?  To benefit the users of the tolled road or to divert to others? 3.Is the toll rate plan fair to all payers? Who decides?  Impacts on local vs. long distance users  Impacts by mode and vehicle type

12. Public Interest Questions (continued) 4.What is the effect of on highway safety?  Impacts on the private road or lanes vs. area roads 5.Is the National Highway System enhanced or will the plan create barriers to interstate commerce & tourism? 6.What is a reasonable long-term return for private investors?  Factors include length of lease, toll plan, and profit caps

13. What Do Hwy Users Need in the authorization bill?  Independent review of PPP / tolling plans developed by state or local elected officials and private investors  Clear checklist of dos and don’ts needed to keep private sector interested  Public involvement from toll payers in PPP development and negotiations.  Local AAAs / truckers / highway user groups  National AAAs / truckers / highway user groups  An assurance that the primary purpose is to maximize public benefits and make roads more safe, efficient, and productive  An assurance that the primary purpose is NOT to take financial advantage of captive road users, coerce their behaviors, or divert their user fees.

14. Final Thoughts  Our View: PPPs that add new capacity can potentially be a great benefit to highway users  But many opportunities for abuse exist. All levels-of-government have a responsibility to keep the public interest protected  2006-2008 US DOT over-reached by promoting all PPPs.  A congressional backlash could also go too far by preventing good PPPs that serve the public interest  Balance needed. Independent federal oversight needed.  Involvement from highway users is critical to long-term success.

15. Questions? Gregory Cohen, P.E. American Highway Users Alliance AASHTO Annual Meeting Palm Desert, CA October 24, 2009 gregcohen@highways.org www.highways.org