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Seven Questions to Help Identify Your Operation Model

By Michael Davis, PE, DBIA

June 16, 2015


The concept of operations is the most critical document for tolling facilities - it defines the who, what, and how. Basically, all of the pieces needed to operate your roadway. It not only drives the design and technical requirements, but also provides direction on procurement method. But how do you begin to develop a concept of operations?

Questions to ask yourself:

  • Why are we building this project?
  • Who are the stakeholders?
  • What are our key business rules?
  • How will we reconcile transactions and collect revenue?
  • Can revenue be used for additional roadway projects?
  • What are our key performance indicators for operations?
  • Who are our customers?

With the answers to the above questions, the concept of operations should capture the fundamentals of how you want to operate your road by identifying some key facets of operations typically driven by policy, risk and funding/revenue. This leads to choosing the best procurement option.

It's important to note that there is no cookie-cutter solution here - that would be too easy. A few examples of the customary methods:

  • Throughput is King (Policy): If the project is built for congestion management alone, and the agency wants to be heavily involved in how traffic is being managed, the agency likely wants to operate the roadway. So, it will need to be involved in the end-to-end implementation to ensure the system is built to support their model. This points towards publicly financed project.
  • Hands-off (Risk): If a state or agency wants to shift the risk of funding and building a project, the agency may consider allowing a third-party to design, build, and finance the project, as well as operate and maintain the project according to clear performance requirements and stakeholder agreements. This supports a public-private partnership, which allows the road to be partially privately financed in exchange for revenue collection.
  • Half-and-Half (Funding/Revenue): If funding to build the project cannot be obtained by the state, and as a result the state needs revenue generation for additional projects, roadway improvements, or just maintenance, private equity can be used to implement the project, which is then handed over to the state to collect the revenue. What may work is a public-private partnership for the design-build portion of the project and an agency-operated and maintained facility.

In the end, there are many hybrid models that can be pursued from the generic examples above. And looking at the rules to operate the road are a good starting point to decide how.

Topics: Insights, Transportation, Tolls & Managed Lanes, Transportation Industry News

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About the Author

Mike serves as the Tolls Service Group Leader for RS&H and has more than 22 years of experience in the transportation industry, including 15 years dedicated to managed lanes and tolling. During his diverse career, he has helped manage the development of managed lanes systems throughout the United States, including Florida, Georgia, Virginia, and California.

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