Interchange Lighting System Design, Construction, and Maintenance: Is Privatization a Viable Option?

Imbalance between the available resources and the number of center-lane miles that warrants lighting has limited the agencies from installing lighting system throughout the roadway network. Further, resource limitations have led public agencies to explore public private partnerships (PPP) or hire private firms to work on projects and meet their desired goals. State departments of transportation (DOTs) such as North Carolina Department of Transportation (NCDOT) currently design and maintain the interchange lighting system while construction is done by a private firm or contractor. Privatizing design and/or maintenance in addition to construction of the interchange lighting system may be an equally viable (economical) option. The focus of this paper is to research, explore options and evaluate if privatizing design, construction and maintenance of the interchange lighting system will result in monetary benefits (economically viable option). Results obtained indicate that the current practice (base case) of interchange lighting system design and maintenance by NCDOT and construction by a private firm is an equally viable option as maintenance by NCDOT and interchange lighting system design and construction by a private firm. Interchange lighting system design by NCDOT and construction and maintenance by a private firm is as economical as privatizing design, construction and maintenance of the interchange lighting system. Adopting any of these above two scenarios would result in a marginal increase in costs to NCDOT. The results from sensitivity analysis (10% increase or decrease in costs) support those obtained from the economic analysis. A 10% decrease in NCDOT construction cost (if the private firm construction cost remains constant) may bring down the total cost to lower than the base case. The benefits, however, in this case are marginal. On the other hand, obtaining competitive bids and lowering private firm construction cost will lower the overall cost and maximize benefits to NCDOT.