Skip to main content

Untangling Tolls and P3s

Albert E. Dotson, Jr. & Eric Singer

The Alabama Department of Transportation recently released a “Myth Busters” communication in response to recent criticism of the agency’s plans to deliver a new bridge and byway project as a public-private partnership. ALDOT’s response focuses on common misconceptions about how the tolls will be imposed and why tolls are necessary for this particular project (which is, in fact, being delivered as a toll-revenue P3). However, in light of the recent pushback against tolls in a variety of jurisdictions, including South Florida, it is worth clarifying the relationship between tolls and public/private partnerships.

In brief, tolls and P3s are independent concepts. In fact, most toll roads are not public-private partnerships—in such situations, the government sets and collects tolls itself as a means to pay for the asset. In addition, most recent P3s do not involve tolls—the private developer of an asset is often repaid by the government directly, through annual availability payments, with no tolls imposed on users of the asset. The recent PortMiami Tunnel is an example of a recent P3 that does not involve tolling. It is also worth considering that even if a P3 asset has tolls, the private developer is not necessarily the party receiving the toll revenue–the government may choose to collect tolls on a P3, but keep the toll revenue itself and instead pay the developer an established annual availability payment. A P3 may also be structured in a manner where the private partner bears the type of risks associate with tolls, but no tolls are actually collected from the public—instead, the government will pay the developer a “shadow toll” for each user. The bottom line is that there are many ways to structure a P3 to accomplish the government’s objectives, and that tolls need not be part of the equation.

YOU MIGHT ALSO LIKE
Speaking Engagement July 17, 2025
Tom Mullin serves as a panelist on the Keeping Your Eye on the Ball: Scoping the Appropriate Environmental Due Diligence for the Project panelat the 39th Annual Environmental Permitting Summer School. The panel discusses effective strategies for scoping environmental due diligence, evaluating histor...
Speaking Engagement July 16, 2025
Howard E. Nelson speaks at the 39th Annual Environmental Permitting Summer School as a panelist on Land and Golf Course Redevelopment: Opportunities and Challenges. This panel explores the redevelopment of closed golf courses and former agricultural lands, with a focus on the environmental, regulato...
Client Alert July 10, 2025
The enactment of the One Big Beautiful Bill Act (“OBBBA”) on July 4, 2025 is the first key piece of tax legislation passed during President Trump’s second administration. While preserving much of the structure established under the Tax Cuts and Jobs Act (“TCJA”) enacted...
VIEW MORE