Category

Public Private Partnerships

Transportation Public-Private Partnerships Will Weather The Storm

But Lessons Learned Will Bring Changes
Andrew Bary’s recent piece “The Long and Binding Road,” in Barron’s  has been widely noticed. “The credit market collapse and political opposition have all but killed the U.S. highway privatization trend,” the respected commentator opined in his article.  What is more, Bary wrote, the Indiana Toll Road deal “was one of the most illogical prices paid for any major piece of transportation infrastructure during the bubble period of 2005 to 2007,”  suggesting that Macquarie made a huge miscalculation.  Gov. Mitch Daniel’s comment  (“It was the best deal since Manhattan was sold for beads…”) did not help, implying that the State got the better of the naive Macquarie. The article concluded, “for toll road investors, what had promised to be a pleasant ride has turned into a painful trip,” citing Macquarie’s shares tumbling 50% in the past year.

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Steve Heminger, Robert Poole: Context Trumps Ideology On Transportation Public-Private Partnerships

The National Journal’s transportation blog asks what’s the proper role, if any, for public-private partnerships? Among the replies from their expert panel, two stand out. Steve Heminger, executive director of the nine-county (Bay Area) Metropolitan Transportation Commission, writes: The debate about the wisdom of greater private investment in our surface transportation system is almost always contested on theoretical or ideological grounds, and that may be enjoyable for the debaters but it is completely unenlightening for the rest of us. I suggest instead that we try to answer the following practical question: what part of our investment shortfall are PPPs most likely to address? It is probably not deferred maintenance (about 50% of our total shortfall), because there’s not much money Read More ›


More Public-Private Partnerships Needed For U.S. Transport Finance

(Article as published at Crosscut) When California recently resolved its mammoth budget deficit, it presciently moved to ease restrictions on transportation public-private partnerships, which over the long run could help control costs to taxpayers of improving overloaded roads, rails and freight facilities. P3s, as the arrangements are called, draw from among construction, engineering, highway management firms – plus infrastructure investment groups often funded partly by public employee and building trades union pension funds – to form consortiums that get important transportation projects built more efficiently, and sooner versus later or never. A P3 consortium may provide consolidated services such as designing and building a toll bridge or highway section, and can also provide upfront capital if public funds are constricted, Read More ›


Chicago’s New Parking Deal Accents Tricky Terrain For P3s

Transportation public-private partnerships should not be used to plug holes in a government budget. The proceeds should be directed to transportation capital investments. But the Chicago Tribune reports that under a new agreement starting January 1, the City of Chicago will lease for 75 years its 36,161 metered parking spaces to a Morgan Stanley partnership for $1.1 billion, with the proceeds going, variously: to patch the city budget through 2012; to a special fund to offset city revenue shortfalls tied to the economic downturn; to a special reserve fund; and to city programs for low-income individuals. I won’t say this sort of, ah, creative attempt to breach city fiscal gaps smells exactly like the thousands of dead alewives that used Read More ›


There’s No Free Ride Anymore

I had a telling conversation with an old friend several months ago, a devoted environmentalist who’s a community college biology teacher living south of San Francisco in a pleasant small town abutting the Pacific. I don’t recall how it came up, but she declared, “We’ve just got to get more people out of their cars.” Then came a pregnant pause, followed by her admission that of course, because of where they lived and worked and their packed daily schedules, she and her husband drove themselves and their children everywhere. I’ve been thinking about this lately because, well, the roads are still chock full of cars and trucks, and despite an uptick in transit and bicycle use, traffic is still congested Read More ›


Beyond The Gas Tax

“We must respond to the reality that the gas tax, the traditional source of revenue for transportation investments at both the state and federal level, is not expected to keep pace with transportation needs in the future.”  With these words, New York Transportation Commissioner Astrid C. Glynn ( pictured below, right) welcomed participants to a  New York State DOT-sponsored symposium, “Beyond the Gas Tax: Funding Future Transportation Needs.” We moderated a panel on “Options Beyond the Gas Tax.” An edited text of our remarks follows.  * * *       A modest boost in the federal gas tax – and only a modest increase has a chance of passing muster with the congressional tax writing committees and obtaining a filibuster-proof majority support in the Senate – Read More ›


Washington State Investment Board Eyes Infrastructure Projects

The need for public-private partnerships to help rebuild the nation’s overburdened and underfunded surface transportation network is growing. Even before gas prices spiked and gas tax hike prospects dived, the Washington State Transportation Commission was calling for P3s. They did so in this January 2007 report, and then again here. The January, 2007 report states that P3s should be closely examined as a potential strategy for completing planned major projects including the SR 520 floating bridge replacement, I-5 Columbia River Crossing, the State Route 167 extension to the Port of Tacoma, I-90 Snoqualmie Pass improvements, the State Route 704 Cross-base Highway in Pierce County, improvements to the state ferry system’s busiest dock, in downtown Seattle, Colman Dock, and for other Read More ›


“A Coalition Of Change Agents At The State Level” Will Boost P3s

Funding infrastructure with private capital, a practice widely used abroad, has had its tentative beginnings here at home, but its domestic long-term future is still clouded. We interviewed a diverse group of individuals of varying political persuasion, on public-private partnerships in U.S. surface transportation. They included state legislators, congressional staffers, senior U.S. DOT officials, state and local transportation officials, members of the two congressionally-chartered transportation commissions,  executives of trade and professional associations, and analysts on Wall Street, in think tanks, academia and private consulting firms.   Support for Public-Private Partnerships is Growing Total reliance on public resources and the fuel tax to fund future investments in transportation infrastructure is no longer a realistic option. Such, in essence, is the considered judgment of a great majority of participants in our survey. State officials Read More ›


Transportation Transformation Group Challenges Status Quo

There’s been growing concern about the state of the nation’s transportation infrastructure, as evidenced by a proliferation of private sector initiatives to influence policy. This includes the U.S. Chamber of Commerce’s “Let’s Rebuild America” campaign; the Rockefeller Foundation-supported Building America’s Future coalition founded by Gov. Edward Rendell (D-PA), Gov. Arnold Schwarzenegger (R-CA) and New York Mayor Michael Bloomberg; the Bipartisan Policy Center’s National Transportation Policy Project led by Emil Frankel; the “Critical Commerce Corridors” proposal to establish a distinct and separately funded national freight transportation program; and the America Moving Forward coalition, whose goal is to champion the principle of public-private transportation partnerships and oppose legislative and regulatory moves to restrict their utilization. Running through these initiatives is a common Read More ›


Sexy, Sexy Infrastructure

Okay – so you already knew that pink was the new black and real estate was the new sex. Now infrastructure is sexy. So say Forbes, The Guardian, and the Wall Street Journal. We’re not talking about your grandfather’s municipal bonds either. Operating costs and necessary maintenance and improvements are something every homeowner understands – all too well. You may be able to meet all these needs without assuming debt beyond your mortgage. Or you might just have to endure an avocado-hued fridge, pastel yellow formica counter, midget sink, pinched shower stall and shaky deck for far longer than you’d like. Cue the violins. Life is hard. But suppose you owned a worn-down state ferry fleet or highway system and Read More ›