Government agencies are recognizing the need to leverage new technologies for electronic toll collection and parking systems. However, there is an ever increasing divide between these public infrastructure needs and available funding. The investment is significant, financing terms may be unacceptable and the risk of success is uncertain given the complexities of design, construction and operation.
In such a fiscally-constrained environment there is a better way to offload this cost and risk. Transportation Funding Consultants (TFC) can provide, in a PPP arrangement, an alternative to the typical government financing avenue of raising taxes or bond issuance.
Benefit from Private Sector Expertise
The public sector typically engages in infrastructure projects for parking or tolling as one-off initiatives so an agency never develops sufficient in house expertise, while continuing to retain costly consultants.
A public private partnership with TFC provides many benefits to government agencies, such as
- Shorter project development timelines
- Private sector expertise
- Strong finance background
- Industry expertise managing construction firms, equipment providers, management and maintenance firms under contract with TFC.
The revenue stream created from these systems offset government project costs with a portion going to ongoing management under TFC.
Typical TFC Funding Agreement
In a typical funding scenario, TFC provides an upfront investment ($5M – $25M) towards the design, building and maintenance of an electronic toll road project and then leases it back to the government agency at a nominal rate. In our turnkey approach TFC also manages the enforcement, monitoring and collection of fines from violators such as speeders and toll runners. The fees collected from these fines are used to offset project cost. TFC brings years of experience to “plate based” toll and citation processing to generate violator revenue.
We establish a revenue sharing agreement with violator citation fines that TFC is required to collect and financially guarantee. This guarantee turns the typical downside of electronic tolling (leakage from violators who do not pay tolls) into an immediate upside for the agency.This violator revenue can also be used against the lease payment and system upgrades can be paid for without spending toll revenue.
The same model can hold true for the design, construction and maintenance of a parking garage or the setup of a complete municipal on-street parking program. TFC offers the financing expertise, management systems and the incentive to succeed, reducing agency risk, upgrading systems faster and increasing toll revenue.