U.S. Department of Transportation
Office of the Secretaryof Transportation
Office of Inspector General
INFORMATION: Financial Analysis of Transportation-Related Public Private PartnershipsFederal Highway AdministrationReport No. CR-2011-147
July 28, 2011
Mitchell BehmAssistant Inspector General for Rail, Maritime andEconomic Analysis
Reply toAttn. of:
Federal Highway Administrator Between 2004 and 2006, two toll roads built in the 1950's—a 157-mile road inIndiana and a shorter road in Illinois known as the Chicago Skyway—were leasedto Cintra/Macquaire, a private consortium. These leases were established throughunique financing mechanisms known as Public Private Partnerships (PPPs).Under these agreements, Cintra/Macquarie made multibillion dollar payments tothe State of Indiana and the City of Chicago, and obtained control of the IndianaToll Road and the Chicago Skyway for 75 and 99 years, respectively.In general, PPPs create contractual arrangements between public agencies and private companies, and lead to greater private-sector participation in the financingand delivery of public projects than traditional public financing arrangements.These arrangements have spurred debate among stakeholders. Some questionwhether PPPs serve the public interest, while others point to PPPs as a means toaddress the nation's infrastructure funding problems. In February 2009, the National Surface Transportation Infrastructure Financing Commission reportedthat the nation’s surface transportation system is in “physical and financial crisis”due to shortfalls in Government infrastructure spending, and estimated that theannual average shortfall, or funding gap, from 2008-2035 would be approximately$138 billion.
This represents the total funding necessary to both maintain and improve the highway and transit systems, expressedin 2008 dollars, under the Commission's baseline revenue forecast.