NATIONAL COUNCIL FOR PUBLIC-PRIVATE PARTNERSHIPS (NCPPP) STATEMENT OF REAUTHORIZATION PRINCIPLES July 28, 2008

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The NCPPP is a national organization composed of public entities, local government and private companies dedicated to advancing the utilization of public-private partnerships (PPPs) in transportation, water resources and many other areas. With the reauthorization of SAFETEA-LU due by September 30, 2009, we offer these four (4) principles for consideration by the Executive and Legislative branches of our government in their deliberations on this important legislation. We do want to emphasize our support of a federal role in the highway and transit transportation areas, and believe that the federal highway and transit trust funds should be given the resources necessary to meet the basic needs of those respective systems. However, we strongly believe that public-private partnerships are a valuable option for consideration to provide the resources needed to meet the funding and development needs of the highway and transit systems of the future.

We therefore offer the following principles which we feel should be incorporated in the reauthorization:

1. The legislation should permit States to enter into PPP without Federal limitations.

States have been careful and prudent in their analysis, negotiation and oversight to ensure adequate protections of the public interest. To address our national transportation needs and bring PPP's into the main stream, the federalism concept must continue to recognize the states' role as a primary steward of the national transportation network, providing the states with the flexibility required to complement the traditional financing and delivery methods, by pursuing innovative financing and project delivery methods with the private sector.

2. The protection and expansion of alternative public sector financing mechanisms.

The NCPPP supports the protection and expansion of existing innovative financing mechanisms, to include: increasing the $15 billion limit on the amount of tax-exempt private activity bonds that may be issued for highway and freight transfer facility projects; increasing the annual subsidy amount available under the Transportation Infrastructure Finance and Innovation Act (TIFIA) credit assistance program; and expanding the State Infrastructure Bank (SIB) program, permitting all states to enter into cooperative agreements with the U.S. Department of Transportation to establish SIBs. Furthermore, the NCPPP supports the expansion of federal funding for capitalization of infrastructure projects.

3. The encouragement of innovations, at all levels of government, that will leverage private capital to meet our infrastructure needs.

America’s infrastructure needs far exceed the public resources available. Hundred of billions of dollars of private capital have been invested around the world in infrastructure projects, providing an important blueprint to meet our needs. Unleashing these resources will give us the tools we need to ensure we have the infrastructure to compete in the global economy.

4. The formation of mechanisms to encourage innovative project delivery.

A primary reason for a public agency to enter into a public-private partnership (PPP) is to expedite project completion, reduce costs and improve project quality by packaging and procuring services in new ways. Since 1990, the Federal government has allowed the State DOTs to evaluate non-traditional contracting techniques. Originally, the contracting practices approved for evaluation were: cost-plus-time bidding; lane rental; design-build contracting; and warranty clauses. After a period of evaluation, the FHWA decided that all four practices were suitable for operational use. The NCPPP recommends modifications to the Special Experimental Projects (SEP-14 and SEP-15) and the Design-Build Final Rule that will help expedite the federal approval processes; adequately recognize risk allocation and risk sharing among the public and private sectors; and reward public and private sector performance for those States and local governments that seek to use innovative contracting and project delivery methods.

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