Tennessee's governor, Bill Haslam, has signed into law the Senate Bill 2093, a bill that will allow state agencies to pursue transportation projects through the public private partnership (PPP) model.

The law has been amended to exclude highways, bridges and tunnels. It will only authorize the development of mass transit projects such as a light rail line.

More concretely, the Senate Bill 2093 will authorize local and state governments to look for PPPs and give partners the power to seek loans, purchase rights of way and collect fees. It will also permit developers to submit unsolicited proposals but it will include a 90-day period during which other firms could submit their proposals.

Additionally, the private developer will have to hire an independent consultant to carry out an audit of all cost for a project whose cost are estimated at more than US$50 million. The audit, which has to be public, will also include a risk analysis.

According to sources, Bill Ketron a member of the Tennessee Senate, said:

“With long-term funding sources for transportation being uncertain, the ability to enter into private-public partnerships will allow us to finance projects that we might not otherwise be able to even consider. This legislation is the result of months of collaboration by many groups that understand the necessity for forging ahead to find solutions to the challenges we face to meet growing transportation demands in Tennessee.”

In mid-February, we reported that the states of Tennessee and Kentucky were about to implement legislation bills that could allow governments in both states to begin developing transportation projects through PPP.

At that time we reported that Kentucky was also considering two identical bills that would permit state and local governments to use P3s develop capital projects. However, projects worth more than $25 million would require the General Assembly’s approval.