Knowledge Resources

Forming public-private partnerships can be a cost effective and efficient way to obtain and deploy ITS resources. When seeking to implement an advanced traveler information system (ATIS) in the Miami tri-county region, the Florida Department of Transportation (FDOT) chose to use a public-private partnership approach, drawing upon private sector funding and experience. The intent of this approach was to select a private partner who would be able to provide ATIS services, supplement the ITS infrastructure being deployed by the state, and, over time, develop a self sustaining ATIS business model. The benefits that the FDOT sought in selecting a public-private partnership to deploy ATIS services included:

• Quick results – deployment of service in 12-18 months, a significantly shorter time period than relying on public agencies alone to deploy services.
• Availability of initial capital – sharing costs between the public and private sectors should reduce required up-front public sector funding as well as deployment costs.
• Obtaining operations and maintenance expertise – the private partner would be expected to maintain and operate the ATIS system, thus alleviating the public sector’s need to obtain personnel and necessary expertise.
• Revenue generating – a private partner may be able to develop its own scalable information package using raw data in the public domain to off-set capital and operating costs. Florida law prohibits the generation of revenues from publicly funded projects, but a public-private partnership may be able to satisfy legal requirements and generate revenues for the private partner.

The evaluation of the public-private partnership identified a number of key lessons stemming from issues that impacted both the project and the partnership.

• Clearly define project goals and expectations in the contractual agreement. When deploying a public-private joint ITS resource, it is crucial to the success of the project that concrete expectations are provided to each and every partner up-front. Both the FDOT and SRS agreed that the contractual agreement developed for the ATIS project was in need of improvement due to the following reasons:
  • The contract contained somewhat vague language on what services were to be provided. For example, a number of project deliverables were described as "desired" or "recommended". This created significant misunderstandings between the public and private partners over what services were contractually agreed to, and what services were to be provided by SRS.
  • The contract did not contain a fixed schedule with clearly identified deliverables covering when specific services were to be made available.
  • The contract did not include a clearly defined dispute resolution process. While all partners agreed that the Steering Committee established to provide project related oversight was the appropriate body for resolving disputes, how this process should work was not addressed in the contract.
• Design partnerships to accommodate changes in the market, with an ability to add and subtract partners and services. This enables private parties to respond to market conditions and discontinue or reduce unprofitable services. Both SRS and FDOT felt that the SunGuide model was weak in this regard. The scope of services for the project included language actively encouraging the ISP to develop revenue sources from the sale of advertising and customized information. A process was established for accommodating changes in the market. When a particular service proved unprofitable (cable TV), no process existed for changing the scope of services to be provided by the ISP. Additionally, there was no clearly defined process on how decisions to change service deliveries should be agreed upon and implemented.
• Maintain the ability to cope with unforeseen impediments to the project. Unanticipated events occur throughout most ITS projects, making it necessary for project stakeholders to be able to quickly adjust to such changes.
  • Both FDOT and SRS changed project managers within the first year of the project, leading to a lack of continuity in project management and direction. These changes also hampered the ability for PARTNERS to resolve implementation issues.
  • During the project, Westwood One, a nation-wide provider of traffic information services, purchased SRS. The change in ownership resulted in a change in corporate philosophy. Westwood One became concerned about continued investment and participation in non-profitable business areas, and recommended significant changes in the business model initially proposed for the Miami Regional ATIS Project, specifically regarding a proposal that the ATIS be a fee-for-service operation. These changes resulted from the fact that private sector revenue sources needed to sustain the project were not developed, nor did there appear to be a viable market for ATIS services in the Miami Region at the time of the evaluation. This represents a significant philosophical change for the project.
• Address the differences between the public and private sector when establishing such partnerships. In the case of the Miami tri-county ATIS project, the public agency activities were geared towards traffic management with a corridor-based approach, while the private sector required a larger market with broader sources of information. When seeking private funds, these differences needed to be addressed, to make projects attractive for private sector investment. The contract agreement established a framework for the private partner to establish non-traffic management business areas and revenue sources other than public funding.

Obtaining, developing, and deploying ITS infrastructure, using only public expertise and funding, can be a difficult and time-consuming process. Forming public-private partnerships is one way to help alleviate these constraints. Public-private partnerships provide agencies the opportunity to draw upon private sector expertise and funding opportunities. However, agencies forming such partnerships must be aware of measures that can be taken to ensure success of both the project and the partnership. These measures include: anticipating unforeseen events, allowing flexibility on part of the contractor, and clearly defining the roles of the public and private sector agencies.