Qingbin Cui

Public-Private Partnerships in U.S. Transportation: Research Overview and a Path Forward

Public-private partnerships (PPPs) are contractual relationships between government and industry to deliver facilities or service for public benefit. In the United States, existing transportation infrastructure is aging and new infrastructure is underfunded. PPPs are considered one way to help meet this looming need. Although PPPs have a long history, interest in modern PPPs is renewed. The current debate over PPPs lacks theory and research to support the various views of PPPs. Promoters say they bring needed financing, technology, management, and risk sharing to infrastructure development. Detractors say government agencies are better positioned to finance and own infrastructure and protect the public interest. The unique contribution of this paper is to provide the results of a national survey on the state-of-practice of PPPs in transportation in the United States, and to provide a comprehensive overview of research on U.S. transportation PPPs in the areas of economics, law, and public opinion. Additionally, a path forward is offered to help organize and guide research in U.S. transportation PPPs in the future.

Balancing Private and Public Interests in Public-Private Partnership Contracts Through Optimization of Equity Capital Structure

Capital structure and revenue-sharing agreements lie in the essence of balancing public and private interests in public–private partnership (PPP) contracts. In the United States, many PPP projects may not be fully self-financed through tolls or other user fees because of insufficient revenue streams. With a limited debt capacity secured by toll revenues, most PPP projects must be supported by both private equity investments and public funds. The equity structure is critical in a PPP contract because it implies risk and profit sharing and therefore provides a mechanism for private incentive and protection of the public interest. This paper presents a structured approach to determining the debt–equity investment in PPP projects. Scenarios are generated by using linear programming and probability programming models to reach the optimal equity structure under risk and uncertainty. The I-10 connector project is used as a case study to demonstrate the optimization process. The model is especially useful for public agencies to (a) estimate the range of private equity investment, (b) determine the target equity structure, and (c) document the benefits and costs of private financing for a successful PPP contract.

Turning Green to Gold in the Construction Industry: Fable or Fact?

AbstractGreen principles have been increasingly incorporated into planning, design, construction, and maintenance processes in the engineering and construction industry. Along with the growth of the green initiative, going green not only demonstrates corporate social responsibility, but may yield significant economic benefits. This study compares financial performance between green and conventional firms in the engineering and construction industry. A total of 22 sample companies used in this empirical analysis are categorized into two groups—green versus conventional firms—in accordance with Engineering News Record and Newsweek green company lists. Two groups are compared in terms of short-term financial performance, long-term economic value, and market value. The analysis shows that green firms outperform conventional firms on return on equity (17.4 versus 8.2%) and economic value added margin (0.35 versus −1.43%). However, the green strategy has not yet been factored into corporate market value. The fi...

Green Contracting in Highway Construction: State of the Practice

Growing public awareness of climate change requires transportation professionals to integrate green concepts into the transportation planning, design, construction, and operation processes. For the past decade, although many studies have been done on carbon emission reduction strategies for on-road and off-road operations, few studies have dealt with emission reduction issues in highway project delivery. This paper, based on a survey of 39 state departments of transportation, reports the green contracting practice for delivering highway projects in the United States. Four levels of green contracting strategies and their application procedures are identified. Organizational reasons for successful implementation of green contracting are presented and discussed. More important, the study discovers there is a substantial lack of consistent methodology and processes for implementing green contracting. Nor is there a common vocabulary in this field. In an effort to promote green contracting in highway construction, the study suggests that state highway agencies (a) establish organizationwide green initiatives, (b) develop green specifications and standards, and (c) encourage broader industry participation.

Design of Concession and Annual Payments for Availability Payment Public Private Partnership (PPP) Projects

Public Private Partnerships (PPPs) have emerged as an important project delivery method in the United States, where funding agencies are finding it difficult to support the increasing demand of highway projects. The United States has witnessed several types of PPPs during the past two decades, and a recent trend shows that newer designs of PPPs are being adopted for upcoming projects. Availability Payment, an extensively used PPP in the United Kingdom and Canada, is the newest performancebased PPP implemented in California and Florida. Extensive use of these PPPs in other countries strongly supports the belief of their widespread acceptance in the United States. The literature review indicates that concession term and availability payments are the most important parameters of this PPP. However, the public agencies do not have any solid tool that can design these parameters and have to largely depend on traditional methods. This research work introduces a hybrid model that will allow the public sector to determine the upper limit of availability payments and concession duration. The hybrid model has been developed by combining the stochastic dynamic programming model with multi-objective optimization principles. The model allows using private sector’s financial condition, uncertainty of private sector’s performance and the remaining life cycle costs of the asset. The use of this model ensures cost savings for the public sector and financial stability for the private sector simultaneously. This research includes an analysis of the CALTRANS’ Presidio Parkway Project as a case study to demonstrate the use of the model.

National-Level Infrastructure Risk Evaluation Framework and Best Practices

The national infrastructure is the most essential society component serving for civil activities, economic prosperity, and public safety every day. Its absence or failure will result in tremendous devastation to nation’s growth and competitiveness. Nevertheless we can’t manage and drive the infrastructure to a right direction unless the infrastructure conditions and risks are properly evaluated. And current researches mainly focus on single or multiple projects, seldom study the risk evaluation from the overall national level. This paper first constructs a national-level risk evaluation framework from four levels: ultimate outcome, immediate determinants, underlying determinants, basic determinants; then assesses the infrastructure condition based on ASCE quadrennial infrastructure report card case. Various methodologies, assessment objectives, evaluation breakdown structure, gauging criteria and data sources are discussed though the case. The result of this research can be used for investigating national infrastructure risks systematically, supporting the national infrastructure funding allocation, and assisting to policy decisions making.

Sustainability Rating System For Construction Corporations: A Best Practice Review

The incorporation of sustainability principles into project design and operation processes has been profoundly changing the construction industry. This change has caused an increasing number of projects to pursue a green certification, such as the Leadership in Energy & Environmental Design (LEED) and Green Globes certifications for building projects or the Green Leadership In Transportation Environmental Sustainability (GreenLITES) and Illinois-Livable and Sustainable Transportation (I-LAST) certifications for transportation and highways projects. While a great body of knowledge has been established at the construction project level, little is known regarding social and environmental responsibility at the construction corporation level. As many modern construction projects have started to favor green contractors and encourage green processes, such ignorance is cause for concern. Therefore, based on the extensive review of sustainable rating practices in other industries, such as financial services, retail industries, universities, and standardization organizations, this paper proposes a framework for a Sustainability Rating System for Construction Corporations (SRSCC) and 77 key sustainability indicators covering three dimensions of sustainability (social, environmental, and economic) and four elements of construction corporation (service/product, operation process, administration, stakeholder). With comparing this framework to existing sustainable rating systems in the construction industry, this paper delivers four insightful results, which could be used to improve the sustainable performance measurement both for the entitle construction industry and the individual

Model for Schedule Risk Evaluation in Subsurface Explorations

Subsurface explorations are performed to provide necessary information on soil characteristics and properties. Timely completion of the subsurface explorations is important for successful project development and design. Failure to deliver geotechnical information may cause project delay and damage project performance. Previous literature has seldom examined schedule performance and delay of subsurface exploration. This study aimed to evaluate the operational performance of subsurface exploration by analyzing empirical data on 77 subsurface exploration projects collected between October 2009 and June 2011. The delay analysis identified the primary effects on operational performance of subsurface exploration, namely, unclear data requirements, scope change, permitting, and unexpected conditions. A forecasting model to predict project duration from variables such as number of borings, boring types, early performance warnings, driller issues, and risk events is proposed, and a series of preliminary recommendations to mitigate delay risk is suggested.

A Multi-Objective Decision Support System for Ppp Funding Decisions

PPP is an innovative delivery method used as an option to leverage public funds by attracting private investment into public projects to make the delivery of previously impossible projects possible. Leveraging resources to build more infrastructure increases the output (quantity) of funds; however, besides leveraging resources, the public agency should also increase the outcome (benefits) of those projects by utilizing more efficient funding strategies. Currently, some project level evaluation methods such as VfM and BCA are being practiced to evaluate PPPs; however, those methods fail to consider the overall benefits and costs of PPPs for multiple stakeholders, and they do not provide much assistance in terms of comparison between different projects in portfolio level. This study introduces a MultiObjective Decision Support System (MODSS) which integrates quantitative and qualitative aspects of PPPs and calculates the utility function based on different interests of multiple stockholders. The ROR on private investment, the regional economic benefits for local people, and long term national level benefits are considered as the main attributes to address different objectives of different stakeholders. This two level MODSS model assists public agencies such as FHWA to better spend their resources in special programs such as TIFIA by optimizing their funding portfolio and allocating the available funds into the optimal portfolio of PPP projects.

A Decision Model for Technology Selection in Renovation Project Planning

As infrastructure ages, a significant portion of US capital expenditure is incurred for the renovation and retrofit of existing facilities. Renovation projects are complex, high risk, and involve extensive coordination and planning, primarily due to uncertain site conditions and continuing operation requirements of existing facilities. Early studies have identified innovative and emerging technologies that facilitate site investigation and align renovation and maintenance activities with business production and operation schedules. However, the selection of appropriate technologies in specific project and business environments remains a challenge. Particularly, there is no guidance for project teams who must incorporate the selected new technologies into scope management and project planning. This paper establishes a framework to guide project teams towards appropriate technology selection in renovation project planning. A decision model is developed to integrate the technology selection process into a widely used scope management tool, Project Definition Rating Index (PDRI). The model is specially designed and flexible enough to allow project teams to decide appropriate technologies according to various criteria, including cost, application area, and risk mitigation.