Protecting the Public Interest in Long-Term Concession Agreements for Transportation Infrastructure

Abstract

Lack of cash has led virtually every U.S. state to explore innovative finance techniques that allow important improvement projects to move forward. Recent long-term concession agreements have inspired a debate over the merits and pitfalls of public—private partnerships (PPPs), particularly whether decision makers are considering and protecting the public interests. The concession approach has many advantages over traditional methods, but there are also many concerns. Very few people have a complete picture of the future implications of concessions. The public concerns include use of up-front payments, concession length, and noncompete clauses, among others. Many of these concerns are legacies from the past that have been rectified as both the public and private sectors have learned and adapted. This article summarizes public concerns related to concessions, describes how PPP procurements have evolved to respond to public reaction, and suggests key issues that need to be considered in the future.