Tennessee Transportation Department unveils $4B public-private partnership for I-24 expansion

On May 8, 2025, the Tennessee Transportation Financing Authority Board convened to discuss significant advancements in the state's transportation infrastructure, particularly focusing on a new public-private partnership (P3) model aimed at financing major projects. This meeting highlighted the state's strategic shift towards leveraging private sector investment to enhance transportation capabilities, a move that has not been seen in Tennessee for many years.

The primary topic of discussion was the introduction of "Choice Lanes," a concept designed to provide additional express lanes on highways, allowing users the option to pay a fee for faster travel. Unlike other states that may repurpose existing infrastructure, Tennessee plans to construct entirely new lanes, ensuring that current general-purpose lanes remain unaffected. This initiative is expected to improve traffic flow significantly, particularly on I-24, where the project will add two new lanes in each direction over a stretch of approximately 20 miles.

The financial framework for this ambitious project is noteworthy. The estimated cost ranges between $3 billion and $4 billion, with a 50-year revenue risk concession model. This means that the private partner will be responsible for the design, construction, financing, operation, and maintenance of the new lanes. The financing strategy includes a mix of public contributions, TIFIA loans, private activity bonds, and crucially, private equity at risk. This last element ensures that if the project does not meet financial projections, the private equity investors will absorb the initial losses, thereby protecting public funds.

The board emphasized that the general fund of the state will not be at risk for the debt service or principal associated with the bonds issued for this project. This assurance is critical as it reflects a commitment to fiscal responsibility while pursuing innovative funding solutions.

In conclusion, the discussions at the Tennessee Transportation Financing Authority Board meeting underscore a pivotal moment for the state's transportation infrastructure. By embracing public-private partnerships and innovative financing mechanisms, Tennessee aims to tackle its transportation challenges head-on, setting a precedent for future projects. As the board moves forward, the successful implementation of the Choice Lanes initiative could serve as a model for other states looking to enhance their transportation systems without overburdening public resources.