Harnessing AI to Navigate Public-Private Partnership Contract Renegotiations During COVID-19

By: Ines Aviles-Spadoni, M.S.

Dr. Gabriel Castelblanco

At the height of the COVID-19 pandemic, large-scale infrastructure projects, including toll road Public-Private Partnerships (PPP), faced many challenges and uncertainties. These challenges triggered renegotiations of the terms and conditions of PPPs.  Project budgets, timelines, and other aspects crucial to the project’s long-term survival had to be modified, resulting in detrimental consequences for the public due to cost- and time overruns.

A recent study presented at the University of Illinois at Chicago by Dr. Gabriel Castelblanco, an assistant professor in the M.E. Rinker, Sr. School of Construction Management at the University of Florida, explored the impact of the pandemic on renegotiations related to toll road PPPs. Dr. Castelblanco’s presentation was titled “Navigating PPP Renegotiations in the Wake of COVID-19: Insights from a Toll Road Program.” The study offers a look into how Artificial Intelligence (AI) is helping to manage complex contractual projects. 

“Reviewing renegotiations and contract documents can be a time-consuming process, influenced by the personal perspectives of various analysts,” he said. “However, using tools like Natural Language Processing, AI can efficiently understand contractual clauses and provide detailed analyses on contract management and renegotiations.”

Natural Language Processing (NLP) is a subfield of artificial intelligence to convert natural, human language text into structured data. NLP enhances the interactions between human language and machine learning, allowing researchers to understand the meanings of contractual clauses more comprehensively, which helps understand PPP contracts more effectively.

Using NLP and SNA (a network representation technique), the team is working to create an AI-assisted system to help public authorities make their contracts work better. They want to help PPPs make their massive road megaprojects run smoothly in the face of change or disruption, such as during the COVID-19 pandemic.

Utilizing AI techniques can lead to seamless, data-driven, and efficient PPP transportation project renegotiations with benefits to all parties involved in the contracting process.

“The proposed AI-based methodology has the potential to benefit decision-makers involved in transportation megaprojects,” Dr. Castelblanco said. “It will create flexible contracts in how projects adjust their spending, especially when they are in the initial stages.

“So, for example, if there is less traffic than expected or another strike due to force majeure, the project can still be completed by allowing flexibility on the scope during the operation phase and maintenance investments. This is akin to a safety net for the project’s outcomes aiming for preventing detrimental consequences for the public.”

Dr. Castelblanco’s research utilizing AI can potentially transform how transportation and other mega-road projects are managed, especially during unprecedented disruptions. By harnessing the power of AI, project managers, government officials, and local agencies will be able to navigate the complexities of renegotiations effectively. This research offers the potential to ensure the long-term success of transportation projects, those that are vital to our everyday lives.