By: Jason C. Tomasulo
Governor Corbett recently signed legislation to encourage the financing and investment by private industry aimed at addressing Pennsylvania’s aging infrastructure needs, lack of adequate funding, and anticipated growing funding gap. Pennsylvania has over 5,000 structurally deficient bridges (the most in the nation) and thousands of miles of roads in poor condition.
House Bill No. 3, as amended by the Senate, and signed by the Governor enables the Commonwealth of Pennsylvania and local government entities to enter into public private partnerships (P3) for transportation projects, called “PPTPs” (public-private transportation partnerships). Some of the key aspects are as follows:
- The law only applies to transportation projects, but all modes of transportation are considered for P3 projects. One exception is that the Turnpike Commission is prohibited from entering into a P3 agreement that would give “substantial oversight and control” over the mainline of the Pennsylvania Turnpike to a developer without specific authority granted by the General Assembly;
- The law creates a new Public-Private Transportation Board with authority to evaluate and approve or deny requests for P3 projects;
- The legislation allows for both solicited and unsolicited proposals. Permitting unsolicited proposals allows private industry additional flexibility and innovation to address state and local government transportation and infrastructure needs;
- Various project delivery methods are permissible, including design-build, operate and maintain, a concession providing for the developer to design, build, operate, maintain, manage or lease a transportation facility, and any other method that the public entity determines will address its needs and serve the public interest. But, the government entities will maintain ownership of the transportation facilities (roads, bridges, tunnels, etc.);
- P3 projects are subject to competition through a request for proposals process and are awarded based on the best value to, and in the best interest of, the government entity; and
- The General Assembly can block approvals by the Public-Private Transportation Board, but only for state transportation facilities.
We will continue to monitor the implementation and effect of PPTPs as they impact the construction industry and the Commonwealth.
Jason C. Tomasulo is Senior Counsel at Cohen Seglias Pallas Greenhall & Furman PC. He focuses his practice on construction law and represents owners, general contractors, subcontractors, suppliers and sureties.
Matthew Tom, a summer associate with Cohen Seglias, contributed to this post.