Toll-Lane P3s Show Contractors a Path to Decades-Long Revenue
Two toll-lane megaprojects are giving contractors a new way to think about infrastructure work: not as a one-time build, but as a decades-long revenue stream. Construction Dive spoke with J.P. Villamizar, head of advisory at GISI Consulting Group, about why the $9.2 billion Interstate 24 Southeast Choice Lanes project in Tennessee and the $4.6 billion State Route 400 Express Lanes in Georgia are drawing industry attention as models for public-private partnership (P3) concessions.
Background
Both projects rely on a concession structure in which a consortium designs, builds, operates and maintains a roadway in exchange for the right to collect future use fees, such as tolls, according to Construction Dive. In Georgia, the consortium, Peach Partners, made up of Acciona Concessions, ACS Infrastructure and Meridiam, will deliver and maintain the SR 400 express lanes under a 56-year P3. Peach Partners is providing a $3.8 billion concession fee to the Georgia Department of Transportation to help fund other roadway projects, per the U.S. DOT figures cited in the article.
Villamizar told Construction Dive that these deals don’t change how construction actually gets sequenced or phased on site. What’s different is the entity delivering the work: a single consortium that bundles legal, finance, design and construction functions together as a long-term investor in the asset, rather than a contractor working off a fixed government contract.
Analysis
The significance here isn’t the toll lanes themselves, it’s the financing model and what it signals about where state DOTs are headed. Villamizar frames these two projects as test cases the “entire industry is looking at” to gauge whether the concession model can scale down from mega-projects into medium and smaller programs. If Tennessee and Georgia prove the model works, expect more state transportation agencies to shift project funding away from straight capital budgets and toward concession fees paid by consortiums, particularly for corridors with strong population growth and mobility demand, the traits Villamizar cites as making the Tennessee corridor attractive.
That shift matters because it changes who a subcontractor answers to and how long that relationship lasts. Under a traditional DOT contract, a subcontractor’s exposure ends when the project is substantially complete. Under a 30- to 50-year concession, as Villamizar describes it, the consortium stays on the hook for operations and maintenance for decades, which means there’s a built-in appetite for long-term service and maintenance subcontracts that doesn’t exist in a standard design-bid-build job.
The catch, according to Villamizar, is capital scale. He’s blunt that no single small or mid-sized firm can match the execution scalability or capital investment required for a multibillion-dollar concession like SR 400 or I-24. That’s why these deals get built as consortiums in the first place, pairing infrastructure investors like Meridiam with construction and engineering firms like ACS and Acciona. Villamizar also flags that consortium investors typically aren’t construction experts themselves, meaning they lean on technical advisors to vet constructability and budget risk before committing capital, a detail that underscores where a firm’s technical credibility becomes a bargaining chip for getting into the consortium in the first place.
Villamizar’s other flagged risk area is worth taking seriously: monetizing risk. He argues that successful concessions depend on the agency and consortium having a transparent, upfront conversation about the cost of risks tied to permitting, utilities, right-of-way and long-lead items. For subcontractors, that means the risk-allocation conversation happening at the consortium level before groundbreaking will shape how change orders, delays and scope risk get priced all the way down the subcontract chain.
Villamizar also points to aviation as a growing target for this model, saying GISI is currently advising a client on a terminal expansion structured similarly, and floats rail and highway expansions as other candidates.
What It Means for Subcontractors
- Mid-sized civil, paving, and highway-electrical firms should look at teaming up with technical advisors or engineering partners now, since Villamizar says consortium investors specifically hire outside technical experts to vet constructability, an entry point for firms that can prove that expertise.
- Firms with O&M capabilities (traffic systems, ITS, guardrail and barrier maintenance, drainage, resurfacing) should position for the 30- to 50-year maintenance tail Villamizar describes on deals like the 56-year Georgia SR 400 concession, not just the initial build.
- Watch for smaller-scale concession deals in aviation, rail, and highway expansion, which Villamizar says the industry and states are evaluating as a way to bring this financing model to projects below the multibillion-dollar tier.
- Before joining a consortium bid, subcontractors should push for clear, documented risk allocation on permitting, utilities, right-of-way, and long-lead items, since Villamizar identifies vague risk-sharing terms as a primary threat to project success.
- Firms without the balance sheet to invest capital directly can still capture work by contracting under a consortium’s technical or construction arm, since Villamizar confirms consortiums assemble legal, finance, design, and construction partners rather than requiring one firm to carry the whole investment.
