Skip to main content

O’Hare Express Train Showcases the Viability of P3s for Mass Transit

Eric Singer

Yesterday, the City of Chicago selected two finalists in its procurement process for the planned O’Hare Express, a mass transit system that will connect downtown Chicago to O’Hare International Airport within 20 minutes–substantially faster than either existing mass transit service on the Blue Line or vehicular alternatives.  The two finalists are Elon Musk’s firm, The Boring Co., and a P3 consortium including experienced firms in the P3 market such as Meridiam Infrastructure and Mott MacDonald.

Whichever firm ultimately prevails in the competition, O’Hare Express is likely to jump-start the market for mass transit P3s in the United States.  Significantly, O’Hare Express is conceived as a revenue P3, which means that  the private developer and operator of the system will be repaid by the revenues (e.g., fares) that it collects from users of the system.  Although revenue P3s are common for toll roads, because mass transit is generally viewed as unprofitable, they are often dismissed as an option. Recent mass transit P3s, such as the Purple Line and the LAX Automated People Mover, are both delivered with availability models, under which the grantor has agreed to make performance-based periodic payments to the project developers during the projects’ operating phases. What O’Hare Express shows, however, is that a mass transit system can be funded by revenues so long as the technology is appropriately matched to the anticipated ridership and the selected route has sufficient riders, as appears to be the case with the planned O’Hare-to-downtown connection.  There are likely to be many other opportunities for revenue P3s for mass transit both throughout the United States and in South Florida in the coming years, including as part of Miami-Dade County’s SMART Plan.

YOU MIGHT ALSO LIKE
Blog August 10, 2021
Today, the Senate passed the bipartisan $1.2 trillion infrastructure bill. The Infrastructure Investment and Jobs Act would provide funding towards roads and bridges, passenger and freight rail, upgrades to the electric grid, expanded internet access, water infrastructure, and modernization of trans...
Government Procurement and P3 Insights Blog May 26, 2020
Eric Singer authored the Law360 article "COVID-19 Relief: The Time is Now for a Federal Infrastructure Bill", on why an infrastructure investment program would kick-start the economy.
New Miami Blog May 06, 2020
Recently, in our P3 Focus Blog, we pointed out that now is the perfect time for a federal infrastructure bill. Such a bill would jump-start the economy, begin to close the infrastructure gap that currently exists, and do it all at a time where these projects could be expedited because of low usage r...
VIEW MORE