On September 10, 2014, the Federal Highway Administration (“FHWA”) published its final Model Public – Private Partnerships Core Toll Concessions Contract Guide (“Guide”) presenting key concepts for the structuring and development of legal contracts for highway transportation public – private partnerships (“P3”) in the United States. The development of the Guide stems from the Moving Ahead for Progress in the 21st Century Act, which requires the development of standard model contracts for the most common types of P3 transactions. The focus of the Guide is on P3 transactions that involve long-term concessions for designing, building, financing, operating and maintaining highway projects.

Through this Guide the FHWA seeks to create a better understanding of P3 market terms and possible contract structures for use in the consideration and development of P3 transactions. The Guide is part of FHWA’s broader effort to promote understanding of P3 transactions by issuing educational publications regarding industry-standard concepts, relevant common tools and mechanisms, and examples applicable to P3 transactions. The FHWA will also publish a parallel document on availability of payment contracts used in P3 transactions and additional draft guides for other contract models in the future.

The purpose of the Guide is to assist in educating public agencies and stakeholders on key issues in highway projects procured as P3 transactions by focusing on the toll road concession model. The Guide is designed to be an informational tool for State and local governments to refer to when considering a P3 project and as a resource for public entities when developing concession agreements in connection with a P3 transaction. Each chapter includes high level introductions to key topics, example definitions and provisions as well as guidance on contract structuring in respect to the key topics. The key topics discussed include tolling regulations, financial modeling and structuring regarding benefit-sharing within the P3 model, methods for addressing supervening events, changes in equity interests during P3 transactions, considerations due to unforeseeable changes in law, and handback requirements at the end of a project, among others. The FHWA also plans to publish an addendum to the Guide that will offer discussions on additional topics related to toll road concession agreements, including performance standards, contract length, consumer protections, and federal requirements.

P3 transactions are being undertaken by transportation agencies with increasing frequency and this Guide is intended to contribute to a better understanding of P3s and for structuring a highway project procured as a P3 transaction. The FHWA designed the Guide as a resource for public agencies in their implementation of successful P3 transactions that promote better and more efficient highway projects.