Protecting Public Interests in Public-Private-Partnership Arrangements for Highway Improvement Projects.

摘要

Engaging private investors and entrepreneurs through public-private partnership (PPP) in constructing and operating transportation facilities has emerged as one of the viable options to meet the challenges of funding the development and maintenance of transportation systems. PPP developments lead to additional capacities without (directly) using public funding, faster delivery of projects, risk sharing with the private sector and more efficient operations and management of facilities. However, the profit-maximizing private sector may compromise public interests by, e.g., imposing higher toll rates or failing to offer high quality of service. A rigorous up-front analysis is needed to better protect public interests prior to entering into a PPP arrangement. This report considers the problem of selecting highway projects for the PPP development with the objective of improving the social benefit while ensuring the marketability of those selected. The problem has a structure of a tri-level leader-follower game and is formulated as a mixed integer program with equilibrium constraints. Without solving the associated problem, we show that optimal tolls and travel times on selected PPP highway projects can be determined from their attributes under mild assumptions. This leads to an efficient heuristic algorithm for solving the project selection problem.