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Previous Section | Table of Contents | Next Section I.Introduction to Public/Private Partnerships in Transportation"You got to be very careful if you don't know where you're going, because you might not get there." - Yogi Berra (1925- ), American Baseball Player Introduction Partnerships involving different mixes of U.S. public and private participants have existed for many years, yet are still nascent concepts on the research and development (R&D) landscape - a work in progress. To some extent, the public/private partnership (PPP) concept is a solution in search of a problem. Reflecting this unease, Steve Lockwood of the Federal Highway Administration (FHWA) and Parsons Brinckerhoff Quade & Douglas once titled a paper by asking, "Public/private partnerships are the answer; what is the question?"5 Judging by the sheer volume and diversity of partnership arrangements, a little bit more is known about the question, yet ironically one is less sure about the answer. In particular, what exactly is meant by the term partnership? From the findings of the May 2001 Symposium on PPPs held at the Volpe National Transportation Systems Center (Volpe Center), it is clear, as Volpe Center Director Dr. Richard John stated, "that partnerships mean all things to all people." Overview Largely based on analysis and summary of the presentations made at the Symposium, this report examines the philosophy of PPPs in light of the transportation system. It reviews earlier work, presents examples of successful arrangements, explores institutional and financial barriers and their role in the innovation process, and sizes up future prospects and opportunities. PPPs in U.S. History Although PPPs often assume a kind of cachet in the present, their history as noted by one of the Symposium speakers, Richard Norment, is as old as capitalism in the United States. For example, in 1736, Benjamin Franklin formed a partnership that began the nation's first volunteer fire department and the first fire insurance company. Under its terms, the fire department would respond to a fire in any house that had a fire insurance policy in good standing, thus promoting insurance sales while building fire-fighting capacity in the city of Philadelphia. The Erie Canal, a partnership that changed the economic course of New York, was a partnership between state government and local immigrant workers; remarkably, there was no Federal involvement during the construction of this canal. Findings of Earlier PPP Reports In keeping with their closely aligned relationship to the science and technology initiatives of the Department of Transportation, the first two editions of the PPP report presented a decided bias toward research and development projects. Findings of Public/Private Partnerships: Implications for Innovation in Transportation The report provided an assessment of PPPs, the challenges they face, and their potential within the nation's transportation system. PPPs in transportation have had modest success as compared to other public policy agendas. Some factors that act to impede success are divergent motivations, limited resources, evolving legal constraints, and changing agendas among participants. The report recommends preventive strategies to minimize the impact of these challenges. In order for transportation-related partnerships to achieve a fuller potential, additional efforts are needed to leverage existing R&D investments and build new ones, possibly as part of the overall R&D investment environment. The first report discussed three innovative partnerships that stand out as collaborative examples. For surface transportation, there is a Partnership for a New Generation of Vehicles (PNGV). PNGV addresses governmental concerns with ensuring a cleaner environment and maintaining natural resources. A prominent example on the aviation side is the Advanced General Aviation Transport Experiments (AGATE) Consortium, which addresses government concerns over industrial revitalization and air passenger safety.6 The Fuel Cell Technology Development for Marine Applications initiative demonstrates the Federal Government's support for alternative energy technologies. These three examples have produced innovations that benefit a broad spectrum of clearly established Federal interests. Findings of Public/Private Partnerships II: Engines for Innovation in Transportation This was the second in a series of studies of the potential for PPPs to stimulate the development and deployment of advanced transportation-related technologies. As in the first report, descriptions and assessments of four actual partnership examples illuminate important factors such as the motivations and agendas, resources, and legal and institutional frameworks of the participants. The first case study describes an initiative of the National Highway Traffic Safety Administration (NHTSA) and the Crash Injury Research and Engineering Network (CIREN). The CIREN partnership aims to undertake basic medical research to benefit transportation safety. The second example is the Clean Cities Initiative, a Department of Energy program that seeks to stimulate the voluntary deployment of alternative fuel vehicles in response to legislative mandates. Third, the Next Generation High-Speed Rail Program (NGHSR) represents a series of partnerships between government and industry to promote commercial high-speed intercity passenger rail service in the United States. The fourth case study concerned the Fraunhofer Society in America, an example of how another developed nation, in this case Germany, manages PPPs for technological development and deployment, and of how this model is exported to another country. Background Conditions and Characteristics of Transportation Partnerships True partnerships - as distinct from simple grants, contracts, or even subsidies - represent a way for the Department of Transportation (DOT) and other agencies to achieve strategic goals while avoiding possible duplication of R&D efforts. They also economize resources, speed up the innovation process, and establish a culture of cooperation that can have long-lasting benefits to the agencies and to society. Partnerships of both public and private sector participants are instruments that help ensure that higher-risk, higher-payoff projects are properly cultivated in the planning and budgeting process. DOT actively supports and initiates partnerships and collaborations among its operating administrations and other government agencies, businesses, and universities to leverage resources and broaden the range of transportation expertise. R&D Partnership Activity in the Department of Transportation Toward the late 1990s, DOT and other Federal agencies with transportation interests collaborated to form a national, transportation science and technology strategy. Affirming that the United States can best profit from its investments in research through the exchange of people and ideas among governments, industry, and academia, the group identified 13 technology partnerships.7
These partnerships address national priorities, and typically involve technologies that are mature enough to allow development of implementation partnerships among elements of the public and private sectors. Since state and local governments and industry provide most transportation systems and services, the appropriate Federal role to bring them into service is to establish partnerships with appropriate organizations. This enables the participants to focus their collective resources and capabilities on addressing the long-term needs of the transportation system with the new technology options. Rather than encompass formal research programs, the technology partnerships represent broad-based collaborative efforts in key technology areas. These partnerships vary in terms of their maturity, with some representing well-established R&D activities and others requiring further definition and interagency coordination. Yet, all of the partnerships focus on the innovation process: getting technology into the marketplace cheaper, faster, safer, and in an environmentally friendly way. The Department's role in these efforts includes strategic planning; reducing barriers; promoting national technical standards, fostering private sector investments, and stimulating creative financing for technology deployment. Reasons for Partnerships At their best, partnerships economize resources, speed up the innovation process, and establish a culture of cooperation that can have long-lasting benefits to the agencies and to society. Private-public partnerships are instruments that help ensure that higher-risk, higher-payoff projects are properly cultivated in the planning and budget process. Still, these should balance against potential risks, including loss of control, possible increased costs, political accountability, and vulnerability, and issues of standards and quality and customer dissatisfaction. For example, in a 1998 presentation at the Volpe Center Symposium on Advanced Multimodal Transportation Weather Services, Maria Pirone stressed the need for a coordinated effort to partner public programs and initiatives with private sector capabilities in order to advance the weather industry to the next level.8 According to Ms. Pirone, both surface and air transportation systems will depend on this fusion of capabilities to reach their pinnacle, early in the next century. Good progress has occurred toward that pinnacle, but reaching the true summit remains a challenge. Some of these challenges and barriers are financial in nature; others are institutional, and technological. Others concern the delicate interplay between the respective roles of public and private sector participants and the imprecision of current boundaries and responsibilities between public good versus private gain. Partnership Models Several partnership models exist with varying degrees of formality, scale, and end use. They include transportation projects involving themes of construction, technology, operations, research, and education. No single model fits all situations. Partnerships help ensure that higher-risk, higher-payoff projects are encouraged, but they also carry potential risks. These risks or barriers to success may be financial, institutional, and technological. Other risks concern the roles of public and private sector participants, and the imprecision of current boundaries and responsibilities between public good versus private gain. Partnership arrangements have branched off into a broad collection of partnership models with varying degrees of formality and scale (see Box 1). End use is one way to classify PPPs. Partnerships created to develop large infrastructure projects (e.g., the Route 125 project in San Diego County) may run into the hundreds of millions of dollars. On the other hand, R&D partnerships (e.g., development of new algorithms or models) or education partnerships (e.g., training programs) may involve relatively modest sums, despite their intrinsic potential payoffs. Technology partnerships (e.g., intelligent vehicles) and operations-oriented partnerships (e.g., traveler information systems) may differ widely in both funding and scope.
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