By David Tanner, March 5, 2014
Some public-private partnerships involving toll roads are only a few
years into long-term contracts but are already falling short on traffic
and revenue. Members of a U.S. House panel questioned the length of the
contracts and urged accountability for so-called PPPs during a hearing
Wednesday, March 5, on Capitol Hill.
The House Panel on
Public-Private Partnerships, created by the Transportation and
Infrastructure Committee and chaired by Rep. John. J. Duncan Jr.,
R-Tenn., discussed an overview of public-private partnerships and their
effects on highway and transit projects.
generally supportive of private-sector involvement in transportation,
said he was concerned about the length of some of the contracts.
“One of the main concerns about PPPs is where we leave taxpayers 30 years down the road paying for it,” Duncan said.
The ranking Democrat on the panel, Rep. Michael Capuano of
Massachusetts cut right to the chase on some PPP contracts that last 75
or even 99 years.
“I’m concerned about spending tomorrow’s
money today,” he said during a discussion of the Indiana Toll Road. Back
in 2006, then Gov. Mitch Daniels leased the toll road for 75 years,
allowing a private firm from Spain and Australia to keep the toll
revenue until 2081 in exchange for operation and maintenance of the
Truckers have seen tolls on the Indiana Toll Road more
than double since 2006 to help the private investors recoup the $3.85
billion they spent to control the roadway.
partnerships for new construction can generally speed up project
delivery, according to a representative from the Congressional Budget
Office who testified during the hearing.
“PPPs have built roads slightly less expensively, and slightly more quickly, than traditional methods,” CBO’s John Kile said.
Capuano later turned the topic back to spending tomorrow’s money today to complete a project.
“You move up a project 17 years, and that’s great,” he said during one
exchange. “What happens when the next guy 17 years from now needs to
build a road or a bridge? We’ve spent his money. I’m not interested in a
drunken night out spending the family jewels.”
panel will have a few more hearings before making recommendations to
the full Transportation and Infrastructure Committee. The full committee
will use the recommendations as it decides what to put into the next
surface transportation authorization bill concerning PPPs.
OOIDA has had a position on public-private partnerships for years. The
Association does not support the lease or sale of public roadways to the
private sector, and does not support efforts to toll existing toll-free
infrastructure paid for with federal tax dollars.
this claim that lifecycle costs are where they’re going to find savings
for transportation projects, but over time, the truth is that the money
used to pay private investors for these projects is gone very quickly,
leaving the taxpayer holding the bag,” said OOIDA Assistant Director of
Legislative Affairs Ben Siegrist, who attended the hearing.
found this interesting. As they were closing out the hearing, they
talked about the reason states and municipalities reach out and go for
these public-private partnerships, but it’s because they have to,”
Siegrist said. “And it’s because Congress lacks the backbone to use
Highway Trust Fund dollars the way they’re supposed to be used.”