This article was first published on IPFA.org
I recently participated in an IPFA panel discussion, which brought together leaders from across the transportation infrastructure ecosystem to explore the evolving landscape of public-private partnerships (P3s) toll roads and managed lanes.
Duane Callender, Director of the Credit Programs Office at USDOT’s Build America Bureau (BAB) provided a virtual keynote focusing on the vital role of TIFIA in supporting the toll road and managed lane sector. Director Callender emphasized how the BAB is responding to this ever-evolving sector so to as to meet the needs of TIFIA applicants. The director noted that BAB’s application and due diligence procedures are adjusted and revised as the projects it finances change and evolve.
Key takeaways from the panelists included:
1. Managed lanes are maturing
Managed lanes are no longer niche or experimental. The US market has seen strong performance across many operational managed lanes projects, with revenue consistently outperforming even aggressive projections, demonstrating user acceptance, traffic durability, and long-term financial viability. These assets are now seen as dependable infrastructure investments—validated by positive credit ratings, secondary market refinancings, and growing investor interest.
2. Delivery is evolving from projects to programs
State DOTs are increasingly shifting from isolated one-off projects to comprehensive system-wide programs. This strategic shift allows for more integrated planning, and the ability to cross-support segments to create regional congestion relief and improve mobility. For developers and investors, the ability to plan for a pipeline of projects strengthens long-term business cases.
3. Risk allocation is becoming more nuanced and collaborative
We have seen a market recalibration regarding how risk is allocated, especially construction and performance-related risks. The panelists emphasized the growing importance of balanced risk-sharing, including:
- Inflation protections during long construction periods, particularly in a high-cost environment
- Environmental permitting and utility relocation coordination, which can significantly impact delivery timelines
- Guaranteed access to rights-of-way before notice to proceed, helping reduce schedule risk
- Realistic expectations around traffic management and lane closures on active corridors, which affect both construction efficiency and user experience
The panelists also emphasized the importance of operational flexibility to ensure toll facilities can maintain performance metrics, such as minimum speed thresholds and travel-time guarantees.
4. Tolling technology and customer experience are now central to success
Modern managed lanes are built around variable tolling, seamless digital payments, and real-time traffic management. Where early skepticism from the lending market once saw variable tolling as a risk, it is now embraced as a strength, allowing operators to maintain minimum speed guarantees, optimize capacity, and provide tangible value to users.
Importantly, owners and developers are embracing flexible payment platforms (apps, license plate billing, etc.) to meet the public where they are. Projects are evolving beyond infrastructure and into customer-centric mobility services.
5. Data is transforming forecasting, design, and operations
A major inflection point for the managed lane asset class has been the significant increase in empirical, observed user behavior data from operational facilities. Unlike the early days, when revenue forecasts relied heavily on assumptions about rational commuter behavior and time-value tradeoffs, today’s forecasting is increasingly rooted in real-world practice and experience.
Surprisingly, data shows high willingness to pay even at off-peak hours (e.g., 2:00 am), with users valuing reliability and convenience over just time savings. Real-world insights such as these are better shaping project design, pricing regimes, and long-term revenue modeling.
6. The forecasting model itself is being reimagined
Panelists highlighted a clear shift from static peak-hour-based modelling to more dynamic, empirically driven approaches. Lenders and rating agencies are becoming more comfortable with these improved forecasting methods, especially when supported by robust comparative data from similar assets.
7. Public support hinges on early messaging and transparency
Community and political opposition remains a real issue, especially where tolling is poorly explained or introduced late. Successful states have learned from past missteps and are now embracing early outreach, transparent pricing expectations, and branding strategies (e.g., Tennessee’s “choice lanes”).
Panelists noted the success of localized discount programs, clear explanations of “user-pays” principles, and ongoing community engagement as essential tools in building durable public trust.
8. TIFIA and PABs are still foundational
Despite a more diversified funding environment, TIFIA loans and Private Activity Bonds (PABs) remain essential to the sector. Multiple projects have successfully refinanced out of TIFIA, demonstrating asset maturity and private market confidence. However, panelists flagged that the $30B PABs cap is nearly exhausted, and advocated for raising the cap in the next federal reauthorization.
9. Technology uncertainty must be addressed with flexible contracts
Autonomous vehicles (AVs), AI-based tolling, and vehicle-to-infrastructure (V2I) technologies are no longer distant possibilities—they’re entering real-world operations. Several panelists noted AI is already being used in real-time toll rate optimization.
However, the long-term implications of emerging technologies on usage patterns, pricing strategies, revenues, and user value remain unclear. Panelists urged that long-term P3 contracts must build in optionality and innovation pathways, allowing public agencies and developers/operators to adapt together as technology evolves.
10. Capacity constraints are real, but surmountable
As project pipelines grow (with $20 Billion in the pipeline) questions of market capacity are becoming more relevant. Panelists noted several potential challenges:
- A limited pool of qualified developers and contractors
- Competition from other global infrastructure projects
- Strain on engineering and skilled labor resources
- Pressure on public-sector bandwidth for procurement and oversight
While most agreed the financial markets (including PABs, bank debt, and private placements/44A markets) can handle the volume, strong programs with steady pipelines, early market engagement, and dependable procurement schedules were highlighted as models for managing capacity risk.
Conclusion: From roads to smart corridors—Managed lanes comes of age
The panelists highlighted that we are at a turning point for managed lanes and toll road P3s in the US. These projects are no longer viewed simply as infrastructure; they are mobility platforms—and increasingly, technology platforms—designed to provide a differentiated, customer-focused travel options.
Across the panel, there was clear recognition that success going forward requires more than just concrete and capital. It demands thoughtful program structuring, public outreach and communication, proactive political messaging, adaptive contract terms, and a strong focus on the users. Technology will only hasten this evolution. Getting there will take political will, public support, capacity, and sustained partnership.
The takeaway from the panel is clear: the tools are here, the track record is building, and, with the right public-private collaboration, the next decade could see managed lanes not only scale up, but help redefine how we plan, finance, and deliver mobility in the US.