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A recent series of events, notably an invitational conference on Public-Private Partnerships convened by the National Conference of State Legislatures (NCSL), has focused attention on the role of public-private partnerships (PPPs) in transportation, and underscored once again the need to more clearly define  the proper federal role in PPP oversight.
The NCSL Conference on Public-Private Partnerships. For the past 18 months, a working group of the National Conference of State Legislatures has been studying domestic and international experience with public-private partnerships. The group’s objective has been to provide state legislators with an informed and objective appraisal of PPPs– something that the NCSL believes has been missing from the public dialogue. “Boosters and detractors of PPPs have dominated public debate,” states NCSL, “while reasoned voices have been hard to discern.”
To share its findings with the transportation community and seek its input, the NCSL invited an influential group of state legislators and leading members of the transportation community to a meting on March 26 to consider the next steps. Opening speakers featured Jane Garvey chairman of the investment fund Meridiam Infrastructure (North America) and the recently appointed board chairman of the Bipartisan Policy Center; former Secretary of Transportation Mary Peters; and U.S. DOT’s Regina McElroy, Director of the Office of Innovative Program Delivery. Co-sponsoring the meeting was UK Trade and Investment (UKTI), the economic  development arm of the British Government. The NCSL program was designed as a US-UK government-to-government dialogue.
The formal presentations and subsequent breakout group discussions evidenced strong support for the use of PPPs as a method of financing transportation infrastructure. However, support for PPPs was conditioned on the need to protect the public interest in PPP transactions.  A key theme running through the discussions was the appropriate state and federal role in protecting that interest.  The tenor of the day-long discussions could be summarized as follows:
The discussions proceeded from the assumption that state legislatures are primarily responsible for deciding whether and on what terms states can enter into public-private partnerships. Currently, 28 states have PPP enabling statutes. These statutes are designed  to guide PPP implementation and ensure through  groundrules for the contracting process and bidding procedures that the public interest is properly protected. State legislation also provides for legislative oversight–typically on a program rather than project basis, although eight states require individual PPP proposals to be approved by the state legislature. State executive agencies are responsible for negotiating specific contracts with the private parties. Key provisions that protect the public interest in PPP contracts include length of concession, bidding procedures, performance standards, toll policies, labor protections, revenue sharing, risk allocation, use of toll proceeds, transparency, and public participation.
The federal role in PPP oversight is less clear. As a financial partner in PPPs (through TIFIA, Private Activity Bonds, TIGER grant program and other financial mechanisms) the federal government  has a legitimate interest in and shares the responsibility for protecting the public interest. But a highly regulated oversight of PPPs at the federal level would preempt state authority and could have, in the words of more than one speaker, a “chilling effect” on private sector participation in infrastructure investment.
The proposed federal Office of Public Benefit (OPB), which would have the authority to approve or disapprove all tolling and PPP projects on a case-by-case basis, came in for special criticism. OPB represents “regulatory overreach” that could stifle partnership initiatives and  discourage private investment in infrastructure,  many participants asserted. Private investors, it was alleged, may be reluctant to develop costly project proposals if there is a risk that federal approval will be withheld even though the project conforms to all state legislative requirements and has been selected and approved by the governor and the state DOT.
Striking the proper balance between the federal interest in protecting the public interest and the states’ right to determine the appropriate level of private sector participation and to exercise oversight over the contractual PPP process will be a critical challenge in designing future federal legislation. The prevailing sentiment among the conference participants was that the proper federal role should be one of encouraging rather than inhibiting public-private partnerships. The responsibility to regulate PPPs and ensure that they protect the public interest should be reserved to the states.

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With an agreement announced today at the New York International Auto Show, Ford and Microsoft will, according to the Associated Press, “work together on a computerized link between houses, electric cars and utility companies to help manage energy use.” The system would start with the all-electric Ford Focus compact car that is scheduled to go on sale late in 2011. Called “Microsoft Hohm,” it will allow utilities to vary electric rates based on the time of day. A computer would determine the best time to recharge the car at the lowest cost and the least burden on the utility’s generating system. With this deal, the two companies are taking a major step toward addressing how to blend technology, vehicle advancements Read More ›

Source: Amtrak Cascades What began as a short term pilot project to increase daily Amtrak service between Seattle and Vancouver through the 2010 Winter Olympic and Paralympic games, has been extended for almost another six months. If it goes through September, as now scheduled, regional transportation leaders will have just over one year of ridership and other numbers to analyze for the service. The inaugural second train first ran on August 19, 2009. Cascadia Center of Discovery Institute has long led and supported the effort to increase passenger service not only between the two major Northwest cities, but along the entire Cascadia Corridor. Though it wasn’t the entire focus of the agenda, last May, as part of its Cascadia Rail Read More ›

The HIRE Act (Hiring Incentives to Restore Employment Act, H.R. 2847, P.L 111-147), signed by the President on March 18, has placed the federal surface transportation program on a firm footing and taken the pressure off the lawmakers and the White House to come up with a more permanent solution — at least for a while. While efforts to develop a long-term transportation strategy are expected to continue for the remainder of this year, Congress and the White House are likely to take their time enacting a multi-year legislation. This is the near-unanimous judgment of informed congressional observers and Washington insiders.
In addition to extending the authorization of the surface transportation program through December 31, 2010, the HIRE Act transfers $19.5 billion from the General Fund into the Highway Trust Fund (to reimburse the Fund for interest payments not received since 1998); restores an earlier $8.7 billion rescission of contract authority; and allows the Highway Trust Fund in the future to collect interest on its deposits. The General Fund transfer, when added to the projected revenue stream from the gas tax, is expected to support highway and transit programs at the levels authorized for Fiscal Year 2009 through the end of Fiscal Year 2012 and into FY 2013, according to the Congressional Budget Office. Our interpretation of CBO’s latest projections (Highway Trust Fund Projections, March 19, 2010) suggests that both the Highway Account and the Transit Account of the Trust Fund could remain solvent as long as the second or third quarter of Fiscal Year 2013 (i.e. mid-2013). 
Lack of Adequate Long-Term Funding. The main obstacle standing in the way of enacting a multi-year bill continues to be the inability to come up with adequate funding. To close the gap between the projected revenue into the Highway Trust Fund (estimated by CBO to be $234 billion from 2010 through 2015 ) and the program needs, as estimated by Chairman James Oberstar (D-Minn.), ($450 billion for highways and transit) would require an extra $216 billion over the life of the next authorization. (One-hundred and forty-five billion if only to cover outlays, according to the estimates of House Transportation and Infrastructure Committee staff.) Adding a proposed $50 billion for the high-speed rail program would raise the total unfunded six-year shortfall to over $200 billion. Where is this money to come from? No one has yet found an answer.
Gas Tax Increase No Longer Considered. The most obvious option–to increase the gas tax–has been taken off the table for the immediate future. The Administration’s unwillingness to consider this option was forcefully reaffirmed by Transportation Secretary LaHood at the recent AASHTO Briefing. “It’s easy for people who are not elected to talk about raising the gas tax,” the Secretary observed. “They don’t have to face the voters.” He left no doubt that the Administration remains unalterably and unequivocally opposed to this option–at least as long as the country finds itself in an economic recession.

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Photo Source: The Independent Andrew Adonis, Britain’s Secretary of State for Transport, penned today in The Times a forceful argument in favor of what he describes as a “21st-century transport revolution — high-speed rail.” Read it for yourself, but his article presents strong arguments countering what some in Britain see as insurmountable obstacles to developing a more robust high-speed rail network for the country, including cost, the relative proximity of major cities, and the question of the practicality of long-term planning amidst the recession. As the United States for the first time in decades seems to be seriously wrestling with the idea of how, when and to what extent to further invest in rail, it’s instructive to see a comparative Read More ›

House approval of the Jobs Bill (H.R. 2847) on March 4 by a vote of 217-201 has put an end to the series of temporary month-to-month extensions and placed the federal surface transportation program on a solid financial footing for the rest of the year. The bill, which extends the federal transportation program through December 31, 2010, transfers $19.5 billion from the General Fund into the Highway Trust Fund and restores an earlier $8.7 billion rescission of contract authority. These resources, when added to the expected revenue stream from the gas tax, should allow the Trust Fund to support highway and transit programs at the levels authorized for Fiscal Year 2009 through the end of 2010 and into 2011. Because the House altered the measure somewhat, the bill has been returned to the Senate for another vote before it is sent to the President for signature.

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Reposted from Discovery News Congratulations, Canada! BY Bruce Chapman Reserve used to be a characteristic trait of Canadians. Not patriotic. Defined by what they weren’t–that is, not Americans. No more. Canadians these days can’t stop singing, “O, Canada” and painting their faces red and white. They shout and carry on like, well, I can’t help noting, Americans. Tonight they deserve congratulations and thanks. They have staged a magnificent Winter Olympics in the fabulous world city of Vancouver and the superb modern resort of Whistler-Blackcomb. They could have been stumped by the unseasonably warm weather, but they weren’t. They could have been undone by the pressure of media and transportation. They weren’t. Their guests are flying out of town feeling happy Read More ›

Reposted From Discovery News From Philly to Seattle: America’s Waterfronts are Urban Development Issue of Decade BY Bruce Chapman Call it “On the Waterfront” Meets “Philadelphia Story.” The remake of the famous harbor of Philadelphia is the major development issue of that big city today. Three thousand miles away, the impending replacement of the Alaska Way Viaduct in Seattle has opened the opportunity and necessity of redesigning the waterfront there. Many other cities have similar issues in front of them as industrial era usages in central locations are being replaced by new interests in recreation and tourism and less unsightly transportation. In a recent visit to Seattle, Harris Steinberg of PennPraxis at the University of Pennsylvania, explained to a Seattle Read More ›

A winter storm pounds the SR 520 Bridge, driving waves over the roadway. Photo Source: Washington State Department of Transportation In what has been reported by The Seattle P-I as “an unusually high-profile political move,” Microsoft Corp., yesterday told regional leaders that it’s time to take action on replacing the 520 bridge over Lake Washington. With a full-page advertisement placed in The Seattle Times, the software giant dove into local political waters, creating waves almost as choppy as the real ones sometimes whipped up alongside the 47-year-old bridge. From the advertisement: While there are still some final design issues that need to be resolved with the City of Seattle, we should not let last-minute objections undermine the hard-won agreements already Read More ›

Today marks the beginning of the 2010 Winter Olympics. These Olympic games, although taking place north of the U.S. border in Canada, are in many ways a regional event.
The magazine, BC Business, reported an extensive feature article, which included an interview with Bruce Agnew, director of Discovery Institute’s Cascadia Center, on the Cascadia region and how the Winter Olympic Games plays into the fabric of this unique corner of the world. It’s worth a read.

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