The recent trend in the lack of funding for capital investment projects has been a common problem for many road authorities. Most road authorities are lacking a road fund or earmarked funds and are dependent upon the typical year to year budget fluctuations. This is especially true for construction of large road projects. In Finland, The Finnish Road Administration (Finnra) has tendered the E-18 Muurla - Lohja road project using the publicprivate partnerships (PPP) model. The use of the PPP model effectively means the design build finance operate (DBFO) approach and this is the terminology used in this text when referring to PPP. Finnra has typically procured capital investment projects via traditional methods and more recently the design-build model, which has become the preferred model of choice in Finland. Finnra has investigated and studied some of the new developments with the PPP model in several countries. Recently, Finnra has partnered with the Delft University in Holland to perform an international study, which partially includes the evaluation, performance, and lessons learned fromPPP type projects. This joint study includes the practices of over 10 different countries. Some of the essential issues such as, private financing,risk sharing and allocation, tendering arrangements, newer payment mechanisms, seeking to address road user concerns and customer services, are very important aspect of the PPP model. The aim of this paper is to share some of the real and practical issues and concerns that affect tendering and contracting aspects. These issues include payment mechanisms, tendering issues, advantages and disadvantages, potential pitfalls, and the choices when considering the use of the PPP model. The method used to reinforce suchideas and practices are derived from much literature research, information from the feasibility study, and most importantly by interviews with knowledgeable experts that have actually participated in PPP type projects andresearch. This method also includes the authors own history of researching, interviews, and expertise. Some of the results from the study will be discussed and presented. For the covering abstract see ITRD E139491.
Abstract