The Arizona Department of Transportation (ADOT) and Infrastructure Corporation of America (ICA) have entered into a concession agreement under which ICA will operate and maintain ADOT’s 14 highway rest areas. The concession agreement is the first agreement ADOT has executed under its public-private partnership (P3) statute, which has been in place since 2009, and is one of several P3 opportunities ADOT is pursuing.
ADOT’s concession agreement with ICA went into effect on October 1st and has an initial term of five years. ADOT may, at its discretion, extend the term of the agreement for an additional five years. Up until now, ADOT managed the rest areas under separate contracts. By consolidating the rest areas under a single contract, ADOT will be able to more efficiently manage these facilities. In addition, under the concession agreement, ICA will implement an advertising and sponsorship program and will be able to provide new services, such as WiFi access, to create a better experience for travelers. ADOT is guaranteed a share of the advertising and sponsorship revenues generated by ICA and will use those revenues to fund other transportation projects.
Possibly the most interesting thing about ADOT’s rest area concession agreement is that it will allow ADOT to not only keep its rest areas open, but improve its service to the traveling public. Budget cuts have forced several other Departments of Transportation around the nation to close rest areas. Looking at these two realities side-by-side helps bring into focus the benefits of P3s when properly applied.
ADOT’s press release regarding the rest area P3 agreement can be found on the ADOT website.
Nossaman LLP’s 30-plus infrastructure attorneys offer clients, colleagues, strategic partners, and industry media a wealth of practical experience, insider insight, and thoughtful analysis here on Infra Insight. We blog about what we know best, from industry-leading procurements to local and national policy developments that affect the market and our clients.