USDOT promotes P3s, including potential Pennsylvania toll lanes, in grant awards

The U.S. Department of Transportation has awarded nearly $50 million to 45 governments to explore public-private partnership opportunities, including a grant to Pennsylvania to consider adding toll lanes to one of its busy interstates.

The DOT's Build America Bureau, which oversees transportation P3s, announced the $46.97 million of grants across 27 states as part of its Innovative Finance and Asset Concession Grant Program, a closely watched program in the P3 space established in the 2021 Infrastructure Investment and Jobs Act.

The grants encourage local and state governments to consider P3s and asset recycling and creates a potential pipeline of future projects.

The bureau sent $50 million to 45 governments in 2024 under its first round of funding. Monday's awards mark the second and possibly final round unless the program is replenished. There were 107 applications requesting more than $108 million for the second round, the bureau said in a press release.

"Funding from the IFAC program will help recipients look beyond traditional project funding and delivery methods to generate value and complete critical infrastructure upgrades faster and at lower cost to taxpayers," said the bureau's executive director Morteza Farajian in a statement.

"This novel program, combined with other capacity building grants such as Regional Infrastructure Accelerators, is not only helping our state and local partners identify opportunities, but also enabling them to connect with private developers and investors and their innovative ideas and capital. As a result, communities will receive transportation benefits from projects that would otherwise stall."

The Pennsylvania Department of Transportation won $1.25 million to explore a P3 to convert existing high-occupancy vehicle lanes on Interstate 279/579 into toll lanes to improve traffic flow into downtown Pittsburgh. The Pennsylvania P3 office is already in the midst of a detailed analysis of the project.

The West Virginia Department of Transportation won just under $1 million to conduct an asset scan to determine improvement needs for state-owned bridges and explore P3 project delivery opportunities. South Carolina — which just passed a transportation P3 law — won a grant for a statewide asset scan focused on its major corridors, including I-77, I-85, I-385, US 278, and I-73.

Oklahoma won $1.25 million to "develop a program of alternative delivery methods and innovative financing to expedite completion of state infrastructure projects."

The grants are relatively small, with the first $1 million needing no matching funds. The program offers two types of grants: technical assistance grants to develop, review, or enter into asset concessions and expert services grants for project development of assets, including hiring professional services to explore opportunities for leverage.