Tennessee to use public-private partnerships on choice lane highway projects

March 28, 2024

The Tennessee Department of Transportation is set to begin partnering with private entities on highway expansion projects designed to mitigate traffic congestion in some of the state’s most congested corridors.

The Volunteer State is the latest to plan to use “choice lanes” — a highway model that involves building variably priced paid lanes while keeping existing free lanes — as a solution to improving transit times during peak traffic hours. With choice lanes, drivers can choose whether they want to pay a toll to access the new lanes or use the existing free lanes.

Under the public-private partnership (P3), private-sector partners will design, build, finance, operate and maintain the new lanes. What’s in it for them is that they get to recoup their costs through user fees. The model reduces public cost because any debt associated with the project is privately financed with no obligations to the state.

While several states in the southern U.S. — including Texas, Georgia, Florida and North Carolina — have used P3s to build more than 70 choice lanes in 12 metro areas around the country, the strategy is brand new for TDOT.

The project structure was made possible with the 2023 passage of the state’s Transportation Modernization Act (TMA), which gives TDOT the ability to enter into P3s as well as establishes parity between electric vehicles and traditional vehicles within TDOT’s funding structure.

P3s are already used in several public sectors in Tennessee, including campus infrastructure, social programs and airport expansion.

“These mega-projects would have been very difficult to construct given the current funding framework,” Bryan Ledford, executive director of P3s for TDOT, told Government Market News. “The TMA enables TDOT to bring together private financing, equity investment, and optional user fees to make these projects possible.”

The first project involves adding choice lanes to the 24-mile Interstate 24 corridor between Nashville and Murfreesboro — one of the most congested portions of highway in the state.

Choice lanes would move faster, improving speeds during rush hour to 50 mph in those lanes, and would have a trickle-down effect that improves speeds in the free lanes as well, TDOT has said.

The ability to enter into P3s is a game changer, Ledford said. Tennessee is one of a very small number of “pay as you go” states – meaning they do not use debt to finance their program and are therefore limited in what improvements they can make.

Typical road construction in Tennessee is funded through state gas tax collections.

“Our 10-year project plan is fiscally constrained by its available funding stream,” Ledford said. “Partnering with the private sector on Choice Lanes will help address urban congestion, freeing up additional dollars for rural projects. We have an opportunity to let urban congestion pay for urban congestion.”

The I-24 project is in the environmental, preliminary design and program development activities in preparation for the procurement phase that will kick off with a Request for Qualifications in the fall of this year.

Choice lane studies are also being conducted on other corridors in the Knoxville, Chattanooga and Nashville urban areas.

The cost estimate for the project was not yet available, Ledford said.

“The procurement process will refine the scope and allow private partners to develop the cost of the project,” he explained.

Photo by SounderBruce

Miles Smith

Miles Smith has more than two decades of communications experience in the public and private sectors, including several years of covering local governments for various daily and weekly print publications. His scope of work includes handling public relations for large private-sector corporations and managing public-facing communications for local governments.

Smith has recently joined the team as a content writer for SPI’s news publications, which include Texas Government Insider, Government Contracting Pipeline and its newest digital product, Government Market News, which launched in September 2023. He graduated from Texas A&M University with a bachelor’s in journalism.

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