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Bad privatization deals don't just stop with road deals, there's plenty of concern on other deals, too, like this airport P3 in Indiana.
Forum examines pitfalls of privatization
Story Posted:03/22/2014
The Gary Crusader
The pitfalls of privatization were discussed at a forum sponsored by the Northwest Indiana Federation of Interfaith Organizations, Tuesday, March 18 at Trinity United Church of Christ.
A panel consisting of Don Cohen, Executive Director of In The Public Interest; Hobart Pastor Charles Strietelmeir; Dr. Ruth Needleman; Rev. Dwight Gardner; Atty. Renee Hatcher and Rev. John Jackson focused on how privatization benefits corporations at the expense of the public. The speakers discussed the fight for community benefits agreement for jobs training on Regional Development projects, along with an analysis of the Public-private partnership (P3) Gary-Chicago International Airport agreement.
“Privatization means that private investors will gain and the public will lose. We cannot advance socially or economically if all the decision-making is in the hands of people whose motivation is profit,” said Federation president the Rev. Dwight Gardner.
According to Cohen, who heads a Washington, D.C.-based resource center on privatization, committed to educating citizens, public officials and advocacy groups said, “privatization of public services and assets has been touted as being better, cheaper and faster. The reality is much different. When done poorly, which happens too often, government contracting can be a bad deal.”
The federation has been engaged in a two-year campaign to get the RDA to sign on to it Community Benefits Agreement on all RDA funded projects. The main focus of the Federation’s campaign has been to get local hiring on the Gary-Chicago International Airport runway expansion project.
The City of Gary has entered into a public-private partnership at the airport. Needleman, a former IUN professor said that the according to the contract between the city and the contractors a private corporation will run the airport for 40 years. The airport contract has a nasty wrinkle when it comes to privatization. It’s called a P3, which means a public-private partnership.
The corporation gets to run the airport as its own, until either it fails, pulls out, or drops the bag,” said Needleman. “If it were a regular privatization, the company would be stuck with that bag of debt. But in a 3P the city inherits and owns what’s left, including its debt,’ stated Needleman.
Among the other concerns with the contract is a clause regarding payment of consultant fees. Needleman said the fees are supposed be paid by the private company. She said there are three demands that the interfaith should make. Set aside a percentage of the jobs for residents of the poorest communities. Provide for authentic community participation and insert a clause charging the $2 million consultant to the private company.