pacific nw transportation consortium region 10 Pactrans

Blockchain-based Smart Contracts for Transportation Infrastructure Project Funding

PI: Joe Louis (OSU), Joseph.Louis@oregonstate.edu, ORCID: 0000-0002-2957-9146

Co PIs: none

AMOUNT & MATCH: $60,000 from PacTrans; $60,000 Match

PERFORMANCE PERIOD: 3/16/2022 – 3/15/2023

STATUS: Completed

CATEGORIES: Blockchain, Infrastructure Projects, Funding

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DESCRIPTION: PPP (private-public partnerships) has been touted as an effective means of sharing project risk across public and private entities for capital transportation projects, critics have noted that it suffers from certain disadvantages including the following: (1) Project procurement is much more complicated due to the need for banding together companies and organizations that have not worked as a team previously. (2) Potential for significant cost and time overruns. (3) Long-term nature of PPP agreements can fail to account for uncertain events and thus increases the budget allotment for contingency planning. These disadvantages specifically relate to the financial methods for funding and recovering cost from transportation infrastructure projects – causing huge delays and cost overruns during project execution.

The goal of this proposal is to investigate the use of decentralized financing methods enabled by blockchain technology to provide efficient and effective financial control for capital transportation infrastructure projects. Specifically, this project will result in the creation of a prototype framework for the issuance of a ‘transportation infrastructure token’ cryptocurrency that is issued by project owners (typically government agencies) for specific capital transportation assets. This cryptocurrency is expected to provide a transparent and efficient means of funding and recovering cost from transportation infrastructure projects using smart contracts for toll collection from the traveling public and issuing dividends to owners. The resulting prototype can serve as a template for its use across multiple capital projects. It will also allow non-traditional methods of financing such projects by making investment available to a wider and more diverse range of investors and enabling crowd-funding – thereby also increasing the equity of transportation funding mechanisms.