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COTA eyes public-private tie-up for transpo projects
With the Commonwealth Office of Transit Authority’s application for federal grants not panning out, it is now looking at other options on how to get its public transportation projects off the ground.
Tom Camacho, special assistant for public transportation, said Wednesday that their alternative plan is to consider the possibility of a public-private partnership, P3.
“However, COTA needs legal authority through legislation to engage in this type of agreement, which is different from the traditional procurement process,” Camacho said.
A P3 is a common-grounds partnership between a public agency and a private company. Through a P3 arrangement, the skills and assets of each sector are shared in delivering a service or facility for the use of the general public. In addition to that, each party shares in the risks and rewards potential in the delivery of the service and facility.
Projects with higher chances of success are high priority projects that are defined and have demonstrated public sector commitment.
“Projects delivered through a P3 must allocate the risks fairly between the parties, with each sector assuming the risks that they are best able to manage,” Camacho said.
The public agency assumes the initial risk by undertaking the environmental clearance effort, assessing financial feasibility, and gaining stakeholder and political commitment.
Meanwhile, the private agency can assume the financial risk, such as project funding, construction and perhaps facility management.
“We are looking at P3s as a means to accelerate delivery of our much-needed transportation projects. If we can use up-front private investment to finance some of the projects, we will likely see construction cost savings due to a favorable bidding,” Camacho said.
