Road Network Operations
& Intelligent Transport Systems
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Public Private Partnerships

The involvement of private stakeholders has been increasing in both network operations and ITS service provision. This highlights the need for the public sector to work in partnership with commercial and private stakeholders - and to interface with them in a way that is even-handed in all parts of the life-cycle of a service, from idea, through development, to large-scale deployment. There are several mechanisms and solutions that provide appropriate contractual and operational partnerships. (See Finance and Contracts)

Working with the Private Sector

Traditionally, road network operators have provided all infrastructure systems as part of their network responsibilities. These have included systems such as traffic signals, dynamic message signs, and toll collection. Telecommunications and broadcast radio providers have similarly been responsible for the systems and networks that their services use. The automobile industry has produced systems for in-vehicle use - including a range of radio and mobile communication equipment.

Private sector involvement, often in some form of public/private partnership, poses new issues in relation to financing and procurement that are often unprecedented, complex - and not yet completely resolved. Private financing has been proposed for ITS projects because of the potential to combine public benefits with commercial opportunities.

Europe, Japan, and North America provide an increasing number of examples of private sector involvement in ITS. Private sector participation presents both new opportunities and challenges for transport professionals in both the public and private sectors. Public agencies are looking to the private sector - both for the investment in ITS infrastructure and for ITS operations and delivery of ITS Services. The reasons for this are many, but in general there are four principal motivations:

  • ITS can create markets for new products and services
  • ITS demand large financial investments
  • ITS depend on access to state-owned or controlled transport infrastructure - and so also, the active cooperation of the public authorities (highways and police)
  • ITS services blur the lines between public and private functions

As we have seen, the ITS world is distinguished by the high investment that is often needed to achieve acceptable results. Investment cycles differ for public investment and commercial business - and the opportunity cost of private sector capital is much higher than for the public sector. Financial incentives that are underwritten by the public authorities may be appropriate where the socio-economic benefits are likely to be very high. As with other major infrastructure investments, the return on investment may be long-term, whereas private sector finance normally requires a short or medium payback period. This phenomenon may be an inhibiting factor in projects where the private and public sectors must cooperate.

Opportunities for private sector participation may be hampered by other factors, such as:

  • A lack of commercial viability: market failure and/or unrealistic perceptions of the size of the market
  • Different approaches to risk between the public and private sectors - notably private sector sensitivity to market risks
  • Bureaucratic complexity and confusion of responsibilities between public agencies and government departments dealing with the private sector
  • Poor coordination of cross-cutting issues affecting transport, telecommunications, commerce, and industry
  • Unforeseen legal liabilities affecting the viability of the project
  • Information ownership and intellectual property rights issues

Notwithstanding these difficulties, public/private partnerships have the potential for creative synergy between the public sector organisational culture and the entrepreneurial approach. Both parties in the partnership can bring their own skills and expertise to the combined operations (see figure below). Specific private sector strengths are:

  • the entrepreneurial culture
  • easier access to personnel with “high-tech” expertise
  • greater flexibility and diversity in organising the delivery of services for different market segments - and using different technologies

The private sector can also bring a strong profit motive and access to market funding - without the need to take into account the restrictions posed by public sector interagency demarcations. This is particularly important when trying to start up a new ITS operation that spans the responsibilities of different public agencies.

Conditions for a successful public/private partnership

The public sector strengths are very different:

  • there is a deeply rooted public service culture - and traditionally, all highway and traffic skills resided in the local roads and highways authorities
  • these skills complement the “high-tech” skills of the private sector
  • the public sector can provide a stable regulatory framework covering safety, technical standards and open systems, system effectiveness, and environmental impact
  • public authorities are more sensitive to equity issues (social cost-benefit) than to market and profitability forecasts.

There are major cultural differences to be bridged - notably the requirement for commercial secrecy regarding costs, revenue and profit, which runs counter to the public agency’s need for transparency and open accounting as a deterrent to the misuse or misappropriation of public funds. These differences need to be acknowledged and taken into account in partnership plans.

Creating the Conditions for Private Sector Investment

Building partnerships requires trust, understanding, commitment, and communication. When any of these ingredients is missing problems will arise, and when all of them are compromised, severe difficulties are inevitable. Without trust, achieving consensus on project direction and resolving technical issues becomes very difficult. Trust is built by working together toward common objectives and ensuring that the team members live up to their commitments. Understanding of the roles and responsibilities, and commitment to mutual goals, keeps the project moving towards deployment.

Setting a framework of rules and guidance, and removing institutional barriers to new and high priority ITS are some of the critical roles for which public authorities must assume responsibility. These institutional arrangements flow from the Framework Plan. Typically, in the area of commercial traffic and traveller information services, the private sector asks the public agencies to authorise some or all of the following:

  • A level playing field for all service operators to access publicly funded data - no discrimination in the price or quality of data and information (coverage, reliability, and speed of delivery)
  • Guaranteed reliable access to traffic data collected by public authorities, including reliable forecasts of any charges that the authority might introduce
  • Agreed rights to operate dynamic information services and broadcast information to subscribers without multiple permissions from different authorities
  • Opportunities to install and maintain their own traffic monitoring equipment to augment public authority sources in order to achieve data quality, reliability, and full network coverage
  • Clear guidance, through a code of practice or regulations, on those aspects of design of in-vehicle equipment which are safety-critical - principally the design of human-machine interfaces (screen displays, manual touch pads and switches, voice instructions)

The handling of many of these requirements will be specified in regional or national legislation and regulations - as well as different guidelines and recommendations, such as the European Directives on the open public data and the European Statement of Principles for HMI. (See Human Factors)



The UK requires operators of certain kinds of dynamic route guidance systems to be licensed by the government (real-time driver information, route guidance and navigation services) with powers to impose conditions on their operation. The conditions permit the installation of roadside equipment on the highway and can control which routes can be used (in the interests of orderly traffic management and road safety) and to assess the extent to which any in-vehicle displays have the potential to distract the driver. As the objective is to encourage competition in the provision of services, the presumption is against the granting of exclusive licences.


Reference sources

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