What is a Public-Private Partnership (P3)?
A public-private partnership project is a contractual agreement between a public entity and a private entity (or another public entity) in which the public entity transfers the responsibility for engineering, construction, operation, financing, and/or maintenance (or any combination) of a transportation project or facility to the private sector for a defined period of time.
Kinds of Public-Private Partnerships
Pennsylvania's P3 Office pursues two broad categories of projects:
- New Build Facilities are those that add capacity to our transportation system, or
- Existing Facilities are projects that improve capacity or performance of our current system.
Benefits of Public-Private Partnerships
If the P3 board determines a state operation or project would be more cost-effectively administered or delivered by a private company, the department or appropriate transportation agency can advertise a competitive Request for Proposal (RFP). PennDOT enters into a contract with a company to completely or partially deliver the transportation-related service or project.
In addition to cost savings, P3 projects have other advantages over traditional procurement such as:
- Risk-sharing protecting project sponsors from the cost and consequences of negative events
- Accelerated project delivery compared to traditional public-sector project scheduling and delivery methods
- Improved quality and system performance from the use of innovative materials and management techniques that may result in higher initial quality to minimize long-term maintenance and operations costs
- Ability to apply special incentives to improve project performance and operating efficiencies
- A more optimal distribution of risks, that is allocating certain project risks to the private sector (e.g., financing, schedule, long-term operations, and maintenance) and retaining others with the public agency (e.g., program management, environmental clearance, permitting, and right-of-way acquisition)
- Use of private financial resources and personnel
- Access to new sources of private capital, while leveraging scarce public resources and conserving public-sector debt capacity
What does the P3 Office do?
The Pennsylvania Department of Transportation P3 Office is responsible for overseeing all aspects of the P3 program:
- Identifying, screening, and prioritizing unsolicited proposals and candidate projects
- Presenting proposals to the P3 Board for review and approval at board meetings
- Managing the successful implementation of PennDOT projects from development to procurement and deployment;
- Assisting and providing counsel to other public entities.
P3 Office Staff
James D. Ritzman
Deputy Secretary for Planning
Joseph L. Gurinko
Transportation Partnership Board
Leslie S. Richards, Chair
Secretary of Transportation
Secretary of the Budget
Vice President, NFP Lincoln Benefits Group
Past Chairman of the Board and Chief Executive Officer (CEO), Gannett Fleming, Inc.
Business Manager, International Union of Operating Engineers, Local 66
John J. Martino
President, Martino Enterprises
Hon. William Keller
PA House of Representatives