The bill refers to Public Private Partnerships as a contractual agreement(s) formed between a public agency and private entity that allows for greater private sector participation in the delivery of transportation projects. There are critical needs in Pennsylvania’s transportation infrastructure in order to reduce congestion, increase capacity, improve safety and enhance economic efficiency of transportation facilities. The development of P3s will provide a tool for alternative funding mechanisms and strategies to address the needs of the public.

The bill authorizes a transportation entity to enter into agreements with private enterprises for any portion of their operations or facilities with additional requirements for lease or sale agreements where state funded properties are involved. In the case of a lease/sale agreement involving state funded properties the approval of the State Transportation Commission STC) is required. The STC will be able to solicit specific proposals and to receive and consider unsolicited proposals. Authorized project activities include planning, design, development, construction, reconstruction, improvement, extension, expansion, operation, repair, maintenance, management, revenue collection or financing of a transportation facility. Prior to the Commonwealth seeking a lease or sale of a public asset the governing body of the asset must approve the action being sought. The lease or sale of the Pennsylvania Turnpike is restricted.

Funds derived as a result of a PPP agreement shall be used exclusively for transportation purposes and shall only with a 2/3 vote of the General Assembly be used elsewhere.
In order to protect these funds, it may be necessary to pass a constitutional amendment.

Affected counties and municipalities will receive notice of PPP projects. For design build projects, the Separations Act shall not apply.

Approximately 19 states have authorized the use of Public Private Partnerships to address capacity and maintenance shortfalls in their transportation network. The basic principal behind a PPP is to attract through a variety of enticements, private capital or private management expertise to specific transportation projects. A PPP can be used in the case of an unfunded capacity improvement such as interstate express lanes by offering the opportunity to a private operator to fund a project with the promise of charging a toll for the expansion. There are multiple P3 arrangements ranging in degree from a franchise type agreement for a specific operations management task all the way to a payment for the lease of an existing public asset.

A PPP can be used to expedite completion of a project, to provide cost savings to a government entity and to access new sources of private capital.