MDOT P3 Frequently Asked Questions

Public Private Partnerships (P3s) are contractual agreements between a public agency and a private entity that allow for greater private participation in an innovative delivery of projects.

MDOT utilizes P3s to leverage private sector expertise and mitigate risk for the state on large infrastructure projects. P3s offer an opportunity to tap new financing sources, and a new means to procure infrastructure, by partnering with a private entity to perform a variety of functions to deliver the project, such as design, build, finance, operate and maintain the transportation facility.

Maryland’s P3 law signed in 2013 provided the private sector with a stronger, more predictable process, with the ability to complete the project in an accelerated schedule, and guaranteed levels of performance.

A P3 is a method for delivering public infrastructure assets, such as highway improvements, with an agreement between the State and a private entity. The private entity would perform functions normally undertaken by the State which may include designing, building, financing, operating, and maintaining a transportation facility.

Entering a P3 agreement would reduce or eliminate upfront design and construction costs to the State as the P3 developer would provide capital and financing. A P3 agreement would also allow the private sector to bring innovation to the design, construction, operation, and maintenance in the most cost-efficient manner.

No. The State retains ownership throughout the life of an P3 agreement.

No. P3s are a financing tool, not a funding tool. Money for construction can come from:

  1. TIFIA loan or line of credit
  2. Private Activity Bonds (PABS)
  3. GARVEE Bonds
  4. Taxable bonds
  5. Bank loans
  6. Private equity
  7. Milestone payments paid by public sector

Loans and debt are repaid by:

  1. Availability payments paid by the public sector
  2. Facility revenue (such as fees or tolls)

The upfront development costs for a P3 agreement are funded by the State through traditional funding sources.

  1. MDOT receives the P3 Concept through an internal or unsolicited proposal
  2. High Level Screening (such as; appropriate, viable, effective)
  3. Detailed Level Screening (such as; analysis, VfM, due diligence, resources)
  4. Presolicitation Report (relevant tasks, industry outreach, risk allocation)
  5. BPW Designation
  6. Request for Qualifications
  7. Request for Proposals
  8. Commercial Close
  9. Financial Close

The purpose of an RFI is to explore interest and seek feedback from the private sector on the viability of project through a P3 agreement. It is simply a way to gauge interest and does not commit that a project or projects are forthcoming.

No. A response to an RFI is not required to respond to any future Request for Qualifications or Request for Proposals that may be issued that may develop from this RFI.

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