United States Department of Transportation
i
Blockchain-Based Smart Contracts for Transportation Infrastructure Project Funding
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2023-08-15
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[PDF-665.24 KB]
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Edition:Final Report
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Abstract:The USDOT Strategic Plan highlights the importance of improving the mobility of people and goods through its focus on infrastructure. However, a significant portion of the transportation infrastructure in the United States–up to 173,000 miles and 45,000 bridges—is in poor condition, which causes a variety of mobility-related traffic concerns that are estimated to cost the taxpayer over $160 billion dollars per year. Much of the major transportation infrastructure projects that are funded with federal monies are typically executed through public-private partnerships (PPPs) in which a consortium of private contractors in partnership with relevant public agencies form a special-purpose project company. While PPPs are an effective means of sharing project risk across public and private entities for capital transportation projects, critics have noted that they suffer from disadvantages related to the complexity of project procurement and administration, susceptibility to cost and time overruns, and failure to account for uncertain events due to the long-term nature of the projects. This project investigated the use of decentralized financing methods enabled by blockchain technology to provide efficient and effective financial control for capital transportation infrastructure projects. This project created a prototype framework for the issuance of a “transportation infrastructure token” cryptocurrency to be issued by project owners (typically government agencies) for specific capital transportation assets. This cryptocurrency would provide a transparent and efficient means of funding and recovering costs from transportation infrastructure projects by using smart contracts for collecting tolls from the traveling public and issuing dividends to owners. The resulting prototype can serve as a template for use across multiple capital projects. It will also support non-traditional methods of financing such projects by making investments available to a wider and more diverse range of investors and enabling crowd-funding—thereby also increasing the equity of transportation funding mechanisms.
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