The untapped value of transportation assets.

• Author: Rawlins, Scott
• Position: Commentary

Transportation department own a lot of infrastructure. They could be doing more to derive revenue from it.

Under relentless fiscal pressure, transportation agencies are struggling to maintain the quality of their assets--their roads and highways, airports, bridges, ports, and real estate as well as buses, trains, ferries, and fleets of cars and trucks. That is why many are looking to leading management and funding practices.

Leaders of state and regional transportation departments seeking efficiencies should start by taking a broader view of what their agencies own. The sheer scale and diversity of public-asset portfolios can make it hard to gauge their efficiency. Most states, for example, keep separate inventories of transportation assets. By integrating all the inventories across a state, management can gain a better top-level view of how these assets are being used and maintained, giving them a greater ability to detect duplication and waste and to identify opportunities to enhance the assets' value.

Avoiding the temptation to forego maintenance when money is tight is difficult. Rather than cutting maintenance, agencies should strive for more efficient management and timely maintenance to improve safety, reduce the cost of repairs, and enhance asset lifespans. ISO 5500x, the revised global standards for infrastructure asset management, provides an excellent framework for delivering the most value from public-asset portfolios.

Procurement also offers great potential for savings, as agencies introduce common standards and negotiate volume discounts. P3s and outsourcing are growing in popularity, encompassing fleet contracts; concessions for operating and maintaining roadways; back-office services such as human resources, finance and IT; and larger capital projects such as road and bridge building. For example, through well-defined performance-based contracts using multiple contractors, the Florida Department of Transportation is saving an estimated 17 percent per year in maintenance costs across a range of administrative and maintenance activities.

Even when infrastructure is well maintained, however, many transportation agencies continue to view their assets as merely a drain on their budgets. But in recent years some agencies have gotten more creative. Rest areas and welcome/visitor centers on highways may present a good opportunity for selling food, goods and services through specialized outsourced service providers as well as for...