Pittsburg-Gazette 4-part series on P3s

Link to article here.

The 'P3' dilemma: How effective are public-private partnerships?
By Len Boselovic / Pittsburgh Post-Gazette
August 10, 2014
The first of a four-part series.

Cash-strapped governments around the country that are reluctant to raise taxes are increasingly plunging forward with bold experiments: enlisting investment banks, pension funds and other eager investors to fund billions of dollars of highway, bridge and other infrastructure projects.

In Chicago, then-Mayor Richard M. Daley plugged a short-term budget gap in 2009 by turning over 36,000 metered parking spaces for 75 years to a private venture organized by Morgan Stanley. With little information and little time to analyze the transaction, Chicago’‍s city council overwhelmingly embraced the deal and its upfront payment of $1.2 billion.

At about the same time, Pittsburgh Mayor Luke Ravenstahl had considered a $452 million plan to rehabilitate his city’‍s woefully underfunded pension plans by privatizing parking. City council members rejected it.

Canadians see problems with P3s

Link to article here.

P3 partnerships not always wise
Thu Aug 07 2014
Toronto Star

RE: Deadbeat, U.S.A., Editorial Aug. 5

There is no doubt that this bridge is needed. But just how much is it going to cost taxpayers and who will it enrich? And will we ever know?

The Windsor-Detroit Bridge Authority (“WDBA”) will manage the procurement process through a public-private partnership (“P3”), select the P3 concessionaire, be responsible for project oversight and will set and collect all tolls. Chairman of the WDBA board, Mark McQueen, is also president and CEO of Wellington Financial, a venture capital firm. Director Caroline Mulroney Lapham (Brian’s daughter) also works for Wellington Financial, as VP of corporate development.

Ontario has a long history of failed P3s – 407 ETR, ORNGE, Ontario Power Authority gas plants, the Brampton and Ottawa hospitals. So do other provinces.

Based on a study of 28 Ontario P3 projects, worth more than $7 billion, University of Toronto assistant professor Matti Siemiatycki and researcher Naeem Farooqi found that public-private partnerships cost an average of 16 per cent more than conventional tendered contracts. Government prefer P3s to fund public projects, not to ensure the cost-efficient delivery of a public service, but to get costs off the government books. This keeps taxes low and reduces public debt.

But as Ontarians have experienced, taxpayers are often required to put up additional funds when something goes wrong. Or, as in the case of the Highway 407, the government cannot control the tolls charged for the use of a public highway. P3s reward powerful and well-connected contractors and financial institutions whose goal is devalue public services in order to maximize profits.

Municipalities have recently been told that any federal project worth more than $100 million must now be approved by a Crown corporation called P3 Canada, which will make binding decisions on whether the infrastructure must be a P3. In other words, those seeking federal funds for public projects must use a P3 unless P3 Canada says otherwise. This has serious implications for sensitive projects such as water and sewage plants, transit etc.

There are some public services which may be best undertaken by the private sector. If so, let them assume all the risk and ensure that the public receives value. But most necessary public services can be delivered most effectively and efficiently by the government. Most of us cannot afford to pay for private services that replace those that we lose through the public sector. No one begrudges tax dollars being put to good use providing desired public projects or services.

P3s are a shell game intended to bamboozle the public into privatizing profits while socializing risk. We rob future generations of public services that our taxes have paid for, but which we do not receive, because we cannot hold governments to account. How long are we going to allow ourselves to be duped by the promise of low taxes and lower debt while we are being robbed by P3s?

Pat McGrail, Brampton

The simple solution to the deadbeat Yankees who refuse to pay any part of the new bridge connecting Detroit and Windsor: U.S.-plated vehicles pay triple the toll of Canadian-plated vehicles until the bridge is fully paid off. Our bridge, your tolls. Ba-da-boom.

Edward A. Collis, Burlington

Virginia requesting public input on public-private partnerships

Link to article here.

Virginia requesting public input on public-private partnerships
By Keith Goble, Land Line state legislative editor
August 7, 2014

Truckers and other drivers can make their voices heard on Virginia’s pursuit of public-private partnerships, or P3s.

The Virginia Office of Transportation Public-Private Partnerships is asking for feedback on how to increase transparency, competition and public involvement for projects that are developed under the P3 model.

Transportation Secretary Aubrey Layne said the request for comments is intended to improve the P3 process. He said the method should be “a tool to deliver projects that leverage private sector equity, minimize risk for taxpayers, and maximize benefits for the traveling public.”



The Owner-Operator Independent Drivers Association has submitted comments. The Association sent a letter to Gov. Terry McAuliffe and members of the House and Senate transportation committees on the behalf of professional truckers.



OOIDA Director of State Legislative Affairs Mike Matousek said the Association’s communication with elected officials is intended to influence how P3 agreements in the state are structured.



He said OOIDA is generally opposed to P3s, “in particular those that put a private entity in charge of operating a toll on a road or bridge. However, these types of agreements will continue to be used so it’s important that we influence how they are structured.”



The Association also sent a Call to Action to Virginia truckers asking them to provide comment.

Public comments on the P3 manual will be accepted through Aug. 19. The request for comments and the current P3 manual are available here.



Responses can be submitted by email. Responses should include respondent’s name and address and the title “P3 Manual” in the subject line.

Written responses can also be submitted to: Ms. Jackie Cromwell, Office of Transportation Public-Private Partnerships, 600 E. Main St., Suite 2120, Richmond, Va., 23219.

Another opportunity to provide feedback and suggestions will be made available to the public in October.

Copyright © OOIDA

Poll: Highway funding a rocky road

Link to article here.

Finally some honest polling - Americans do not support the privatization of our public roads by a two-to-one margin!

Poll: Highway funding a rocky road
August 5, 2014
By Joan Lowy and Jennifer Agiesta
Associated Press
UNION BULLETIN

 WASHINGTON — Small wonder Congress has kept federal highway and transit programs teetering on the edge of insolvency for years, unable to find a politically acceptable long-term source of funds.

The public can’t make up its mind on how to pay for them either.

Six in 10 Americans think the economic benefits of good highways, railroads and airports outweigh the cost to taxpayers.

Yet there is scant support for some of the most frequently discussed options for paying for construction of new roads or the upkeep of existing ones, according to a new Associated Press-GfK poll.

Among those who drive places multiple times per week, 62 percent say the benefits outweigh the costs.

Among those who drive less than once a week or not at all, 55 percent say the costs of road improvement are worthwhile.

Yet a majority of all Americans — 58 percent — oppose raising federal gasoline taxes to fund transportation projects such as the repair, replacement or expansion of roads and bridges. Only 14 percent support an increase.

And by a better than 2-to-1 margin, Americans oppose having private companies pay for construction of new roads and bridges in exchange for the right to charge tolls.

Moving to a usage tax based on how many miles a vehicle drives also draws more opposition than support — 40 percent oppose it, while 20 percent support it.

Support for shifting more responsibility for paying for such projects to state and local government is a tepid 30 percent.
“Congress is actually reflecting what people want,” said Joshua Schank, president and CEO of the Eno Center for Transportation, a transportation think tank.

“People want to have a federal (transportation) program and they don’t want to pay for it.”

Last week, Congress cobbled together $10.8 billion to keep transportation aid flowing to states by changing how employers fund worker pension programs, extending customs user fees and transferring money from a fund to repair leaking underground fuel storage tanks.

The money was needed to make up a shortfall between aid promised to states and revenue raised by the federal 18.4 cents-per-gallon gas tax and the 24.4 cents-per-gallon diesel tax, which haven’t been increased in more than 20 years.

It’s the fifth time in the last six years that Congress has patched a hole in the federal Highway Trust Fund that pays for highway and transit aid.

Each time it gets more difficult for lawmakers to find the money without increasing the federal budget deficit.
Critics described the pension funding changes used this time as budget gimmicks that would cost the government more in the long run and undermine employee pension programs.

The current fix is only expected to cover the revenue gap through next May, when Congress will be back where it started unless lawmakers act sooner.

The most direct solution would be to raise fuel taxes. That’s what three blue-ribbon federal commissions have recommended.
But opposition to a gas tax increase cuts across party lines, although Republicans are more apt to oppose an increase, 70 percent, than Democrats, 52 percent.

“Every time we turn around there’s another tax, and our gas taxes are so high now,” said James Lane, 52, of Henry County in rural south-central Virginia, who described himself as leaning toward the GOP.

But Michael Murphy, 63, a data services contractor who lives near San Antonio, Texas, where a high-speed public-private toll road is scheduled to open this fall, said he’d rather see gas taxes increased than tolls imposed on drivers. Roads benefit everyone, even if indirectly, so it’s only fair that everyone who drives pays something toward their cost, he said.

A majority of those surveyed, 56 percent, say traffic in the area where they live has gotten worse in the last five years. Only 6 percent say traffic has improved in their area, and 33 percent that it’s stayed about the same.

Another taxpayer bailout of SH 130 truck toll rates

Link to article here.

This is a taxpayer funded BAILOUT of the SH 130 foreign-owned toll road. The state of Texas needs to terminate this contract immediately and take this highway back. It's an absolute OUTRAGE that TxDOT is using tax money to give truckers discount toll rates while autos pay the sticker price. Of course, the state can artificially make the traffic appear higher than it would be otherwise with this not so veiled bailout. This sort of manipulation to prop-up a failure only prolongs the inevitable, which is bankruptcy. Terminate it and get this road back for the taxpayers.

TxDOT works to bring toll discounts back to truckers on SH 130
By Amanda Brandeis
August 1, 2014
KXAN-TV, Austin

AUSTIN (KXAN) — Interstate 35 is a major artery in our city, but is often clogged with traffic. The Texas Department of Transportation says it has a solution.

The department again wants to lower tolls for big rigs on the SH 130 toll road, hoping to push truckers off the interstate. The stretch of I-35 that runs through downtown from U.S. 183 down to SH 71 is the most congested stretch of roadway in Texas, according to TxDOT.

During a pilot program in 2013, the number of trucks on SH 130 rose 44 percent. But the program ended when the funds dried up.

P3 toll roads: short-term gain, long-term pain

Link to article here.

Toll roads, P3s and creative financing will bring short-term gain, long-term disaster for the road building industry
By Tom Jackson
Equipment World
August 1, 2014

For the last half-century gas and diesel taxes collected at the pump have been the primary source of funding for almost all our highway infrastructure. But Congress hasn’t  increased the gas tax or adjusted it for inflation since 1992.

Anti-tax advocates claim this as a victory, but it’s not. With the highway trust fund running dry, the government has been borrowing money from the general fund to pay for a minimum of maintenance and few improvements. Instead of paying at the pump, we’re paying through a combination of income and business taxes and deficit financing.

Brits don't like tolls either

Link to article here. http://home.bt.com/lifestyle/motoring/motoringnews/most-drivers-say-no-to-toll-roads-11363923615098

The Brits don’t like tolls either!

Most drivers say no to toll roads
The Government is considering handing over the running of some roads to private companies as part of the Infrastructure Bill.
July 31, 2014
BT.com

Radical Government proposals to privatise some roads in the UK and for companies to charge a toll have been rejected by drivers. Seventy-seven per cent of drivers say they would avoid toll roads and use another route to avoid paying to drive on a road.

The Government is considering handing over the running of some roads to private companies as part of the Infrastructure Bill as recommended in the Cook Report. This could affect major roads in England such as the M25 and A1.

A survey by the Association of British Drivers also found that 64% of drivers believe tolls roads on routes that are currently free to use would adversely affect their standard of living. The same number also expressed concerns about their journeys being monitored by road management companies.

More than half (53%) of drivers in the UK say they do not want the Government to offload the responsibility of maintaining and running vital road routes to private companies.

ABD spokesman Nigel Humphries said: "It would be politically unacceptable for the Government to privatise our roads and bring in a national road pricing scheme in one go. Nonetheless the Government has overwhelmingly accepted the Cook Report on changes to the way our main roads are run, including sweating the maximum return out of them and consideration of road tolls. It is now planning to replace the Highways Agency, the Government department in charge of these roads, with a company, at first state-owned.

"Many drivers are unaware of the new Infrastructure Bill, now being debated in Parliament. This could see the roads carved up to a number of outsourcing companies, who will be out to make a profit. The Bill worryingly sets up powers to apply a toll."

McAuliffe promotes tolls on I-66

Link to article here.

Another governor, this time a Democrat, drinks the P3 toll Kool-Aid pretending it’s going to relieve congestion. It won’t, none of these managed lane projects have worked across the country. People try to avoid paying the extra toll tax, so gridlock remains on the free lanes and, in turn, diverts traffic from highways onto city streets. Not a good move. Meanwhile billions in taxpayer money get wasted on a underutilized facility useless to the majority of drivers.

Express Lanes, Rapid-Bus Transit Planned for 1-66
Improvements will be made from Capital Beltway to Haymarket.
By Janelle Germanos
Wednesday, July 23, 2014

Express lanes and rapid-bus transit could be coming to Interstate 66, Virginia Governor Terry McAuliffe announced on July 17.

“Interstate 66 is broken. Commuters are stuck in traffic, limited in the travel choices they can make and unable to predict how long their trip will take on any given day,” McAuliffe said. “Giving Virginians more choices and a better, safer travel experience on I-66 is one of my top priorities, and today I am proud to announce the beginning of that effort.”

The plan, which includes three regular and two express lanes in each direction, bus service, and improved commuter parking, would be implemented from the Capital Beltway to Haymarket.

This map demonstrates the area where express lanes and other improvements will be made along Interstate 66.

“Today’s announcement that we could be starting construction by 2017 on Express lanes like solution to I-66 congestion is outstanding news. I-66 is our most congested corridor and this gives me great hope that we can improve the quality of life for all Northern Virginians,” said Supervisor Pat Herrity (R-Springfield.)

The project, which spans 25 miles, will cost an estimated two to three billion dollars. The express lanes would operate similar to those on Interstate 495 and those being constructed on Interstate 95, which base the cost of the toll on time of day and congestion.

“I have been a longtime advocate for an ‘Express Lanes’ like solution for I-66 which would open this corridor up to reliable time advantaged mass transit and carpooling, extend a growing network of lanes dedicated to mass transit and carpools, and ease congestion on I-66 and surrounding roads like Route 50, Route 29 and Braddock Road,” Herrity said. “I want to thank Transportation Secretary Layne for continuing to keep this project a priority for the Commonwealth of Virginia.”

Officials announced the plan at a meeting at VDOT’s Fairfax office on July 17.

“Over the last couple of months the Virginia Department of Transportation has worked closely with the Department of Rail and Public Transportation, the Office of Transportation Public-Private Partnerships and Fairfax and Prince William counties to devise a plan that will reduce congestion on I-66 by increasing capacity and giving travelers more choices. Today we kick off 17 months of rigorous environmental study and robust community involvement. By the end of 2016 our plan is to complete environmental work, identify funding sources, receive federal approval, and move forward on a plan to turn I-66 into the efficient, multi-modal corridor that Virginia’s economy needs,” said Virginia Secretary of Transportation Aubrey Layne.

Express lanes on Interstate 95, which will run from Stafford County near Garrisonville Road up to 395 near Edsall Road, are expected to open in early 2015. All drivers will be required to purchase E-ZPass or E-ZPass Flex in order to use the lanes, and only vehicles with three or more passengers can ride toll free.

Colorado DOT meets public resistance to tolls on I-70, too

Link to article here.

Note secrecy and non-compete clauses are the name of the game with P3s.

Critics say CDOT making same U.S. 36 mistakes on I-70
By Monte Whaley
The Denver Post
July 27, 2014

State highway officials promoting a $1.8 billion remake of Interstate 70 in northeast Denver are threatening to stumble into the same public relations mess that mired the U.S. 36 project earlier this year.

Or so say state Sen. Matt Jones and critics of the plan to add two toll lanes in each direction on I-70 from I-25 to Tower Road and remove a worn viaduct between Brighton Boulevard and Colorado Boulevard.

"After all the fallout over the handling of the U.S. 36 project," said Jones, a Louisville Democrat, "it appears things have not changed much."

Jones and others claim the Colorado Department of Transportation recently rammed through a recommendation to turn the retooling of I-70 into a public-private partnership, similar to the 50-year agreement CDOT sealed for U.S. 36 between Boulder and Denver.

The agency also touted an online poll, conducted among 1,643 visitors on CDOT's website from June 24 to July 9, that showed more than 50 percent of respondents want some sort of tolling and public-private partnerships to pay for new roads and maintenance. Nearly 37 percent said they wanted to increase the state gas tax or sales tax to pay for more free lanes, the poll said.

Thaddeus Tecza, a senior instructor emeritus of political science at the University of Colorado, said from an academic perspective the poll "was a joke. It was one of the most biased polls I've ever seen."

CDOT officials, however, say the poll merely gauged public appetite for private firms to help oversee and construct state road projects. It won't be used to fuel policies.

"The poll was not necessarily valid research," said CDOT spokeswoman Amy Ford. "We just wanted to take a pulse of where people are on this issue."

The original recommendation from CDOT planners to the Colorado Transportation Commission on July 17 to pursue public-private partnerships over other arrangements for I-70 improvements has also been altered.

The new recommendation says that any decision by the High Performance Transportation Enterprise — the CDOT arm that oversees highway tolling — can be modified by the transportation commission to include other alternatives.

"We want to provide different options so the public can be educated in a very open process," said Ford.

In fact, CDOT says, it is just getting started in involving the public in paring down the alternatives for I-70, including public-private partnerships.

But Jones said that so far, CDOT's handling of the I-70 debate mirrors what happened before the agency's pact with Plenary Roads Denver was sealed for U.S. 36.

In that case, critics said details of the contract — which allowed Plenary to manage and collect tolls on U.S. 36 for 50 years — were kept hidden for too long.

Jones sponsored a bill in the last legislative session that would have required legislative approval of a variety of provisions of future public-private deals, including contract terms of more than 35 years and noncompete clauses.

Gov. John Hickenlooper vetoed Senate Bill 197, saying it would have discouraged private firms from investing in any future road bills. Hickenlooper, however, issued an executive order mandating more legislative and public review of any future public-private partnership.

That doesn't satisfy Jones. "There is a predisposition to a private, long-term deal," he said. "Even the staffing is all ready to go."

CDOT, he added, doesn't necessarily have to rely on private firms to help maintain and finance the I-70 redo. It has shown it can handle large road projects, including fixing Colorado roads damaged by September flooding.

"I have more confidence in them than they do themselves," Jones said.

Ford said Jones' assessment of CDOT is "flattering." But private contractors have long played key roles in road contracts, including during flood recovery, she said.

CDOT also doesn't intend to enter into a 50-year term for I-70, said Mike Cheroutes, director of the HPTE.

Tecza and a persistent group of urban planners, architects and others have blasted the CDOT plan for I-70, including the lowering of the highway between the Swansea and Elyria neighborhoods and adding an 800-foot cover along a stretch of I-70.

They prefer closing I-70 between Wadsworth Boulevard and Central Park Boulevard and diverting traffic north onto I-76 and I-270. A reconstructed Brighton Boulevard would then funnel traffic from DIA, Green Valley Ranch and Montbello into downtown Denver.

Their alternative is quickly gaining steam due, in part, to suspicions surrounding the earlier deal for U.S. 36, Tecza said.

"We've heard from plenty of people who had a bad reaction to what happened with U.S. 36," Tecza said.

But, Ford said, things will be different this time.

"We intend to get the public engagement piece kicked off earlier than we did for U.S. 36," she said.

Federal highway program gridlock: Bills push tolls and P3s as quick fix

Link to article here.

Federal highway program gridlock: Bills push tolls and P3s as quick fix
By Terri Hall
July 28, 2014
Examiner.com

The Federal Highway Trust Fund is going broke. The 18.4 cents a gallon in gasoline tax levied by the federal government is no longer sufficient to fund the highway program. The current federal highway bill, MAP-21, expires next month. The House passed a short term extension bill that puts off the pain until after the mid-term elections in November, and it remains to be seen what short-term fix the Senate will pass, but we’ll be right back where we started next May.

Rather than discipline the use of the fund to restrict it to highways only, the feds continue to divert significant gas tax revenue to transit programs that auto users do not benefit from. If ending transit diversions still isn’t sufficient to fund the program, then indexing the gas tax to inflation (with a cap to protect against runaway inflation) is preferable to a massive increase in tolling and selling off our public highways to private, even foreign, corporations in public private partnerships known as P3s.

Toll special interests hijack highway bill

Link to article here.

Tolling lobbyists attempt to hijack highway funding discussion
By David Tanner,
Land Line Magazine
July 23, 2014

A pro-tolling lobby group attempted to steer the discussion about highway and bridge funding this week toward interstate tolls. Fortunately, an alliance that supports toll-free interstates is in place to counter their arguments.



The plot thickened this week when U.S. Transportation Secretary Anthony Foxx and 11 former transportation secretaries including Ray LaHood joined together in a letter to Congress to urge long-term solutions to road, bridge and transit funding.

The letter did not even sniff the issue of tolling, but that didn’t stop the pro-tolling group, the International Bridge, Tunnel and Turnpike Association, from glomming on in an attempt to make the discussion about tolls.



Critics raise concerns on information collected by toll cameras

Link to story here.

Critics raise concerns on information collected by toll cameras
By Scott Wickersham
WSOC-TV
July 25, 2014

CHARLOTTE, N.C. — Critics raise privacy concerns over your personal information and toll cameras that track where you go and when.


The North Carolina Department of Transportation explained Friday why their contract with Cintra talks about driver's medical records.
 
The NCDOT contract with Cintra  stated the Spanish company must not make public driver's Social Security number, medical and criminal records.
 
NCDOT said that's not something Cintra will even collect.



The North Carolina Turnpike Authority will handle toll collections and they won’t ask for any of that.
 
The DOT needed to have protective language in the contract if that information ended up in Cintra's hands.
 
What's more disturbing to some drivers is that toll road sensors and license plate cameras will track their every move.
 
In the past, courts and law enforcement have used that data for criminal cases and even civil matters like divorce.
 
For years, the North Carolina ACLU has been trying to pass legislation to limit law enforcements' use of this data.

They said there's no law that says police need a warrant to get it or who they can share it with.
 
“These are things that are perfectly legal. But none of the government's business,” said Mike Meno with North Carolina ACLU. “Whoever is controlling these cameras, can paint a vivid picture of your life and where you go. Even folks who have nothing to hide are entitled to their privacy.”
 
Terri and Jim O'Connor said it took months to clear their son of a car crash he wasn't involved in.


The license plate camera evidence implied he was at fault.
 
“The DMV sent him a letter saying he owed money because he ran a light and hit a car and criminal history and a civil rights group is raising concerns about a different type of history,” they said.
 
Another concern with tolls is the Turnpike Authority website has a warning right now about a phishing scam.
 
Some of its users are getting fake emails asking them to pay an overdue bill.



If you click the link, it downloads a virus that could steal your financial data.­­­

PA's billion dollar bridge boondoggle

Link to article here.

Pa.'s $1 billion bridge 'boondoggle': Is private funding cheaper?
By Joseph DiStefano
Philly.com
July 22, 2014

MONDAY 7/28: PennDOT officials say the bridge funding program will rely on tax-exempt federal Private Activity Bonds (PABs), which are typically less expensive than private funding, though more expensive than direct state general-obligation bonds. PennDOT hopes for other savings, including volume discount. More in my column in the July 28 Philadelphia Inquirer here.

TUESDAY 7/22: A highway contractor active in Pennsylvania gives me this view of the "public-private partnerships" that President Obama and Gov. Corbett (with his Rapid Bridge Replacement Program) assure us will change the way our governments fund highway and bridge repairs: "As a highway bill, this is a boondoggle. I can assure you that the money involved will be far in excess of what would have been spent utilizing PennDOT’s current procurement process."

But won't PennDOT's scheme get 560 much-needed bridges (most far from Philly) repaired and maintained more quickly? I asked. Maybe, maybe not, the contractor said. But this isn't really about completion dates, he added: "It is the difference of paying as you go with current taxes and fees or having the private sector provide the up-front money and then take 'availability payments' over 30-35 years once the work has been completed."

So how big are those payments, and how much will private highway financing cost, compared to government bonds? That's the question Obama didn't address and his Transportation and Treasury secretaries refuse to address, and PennDOT won't know until the bids are in. But you don't need the details to see that "P3’s are financed at (high) rates that cannot be gotten anywhere but hedge funds. 12-15% are typical. When the cost of this work, plus the financing of same, is removed from Pennsylvania’s highway fund, the drain on resources will be extensive and continue for a long time.

"Everybody that’s trying to get elected likes the plan. But where’s the money to pay for it? There are four teams bidding for the bridges. I see the financiers getting 12-15%. The big construction companies that don't build bridges, which are part of each team, will likely pull in a 'management fee' that's at least as large. Then the rest of the cost is building. So I don’t see any way on earth you will save money.

Bad for taxpayers, good for Wall Street lenders? "Right. Perhaps the Commonwealth’s two large underfunded Pension Funds should invest in this process to beef up their returns?"

"And why replace PennDOT's procurement system? The way they are set up, before this came along, you’re getting 6, 8, 10, 12 bidders on every job. They go to the low bidder. There’s no B.S., no negotiating, the prices are locked. It’s pretty straightforward. These big companies don’t do little bridges. Some of them don't do any bridges unless they're across like the Bering Strait (Alaska-Siberia). So who's building these (Pa.) bridges? The way I see it, they're hoping everybody on the losing teams becomes a free agent, and all the mom and pop companies, they'll all go together to the winner and get some work there."

Which they would anyway, without the high-priced middlemen, if PennDOT bid the jobs directly.

How does this fit with the new gas tax and highway bill passed by the General Assembly and signed by Gov. Corbett? "There is so much work coming from PennDOT, a transformative change in PennDOT’s roadbuilding and bridgebuilding.

They're finally going to do jobs like the Route 1 and 95 intersection. And all that is completely different from this bridge thing. I wonder how many of these contractors out there will even offer to do bridges (once the master bridge contract is awarded?) If you’re any good you have work already lined up. You're not waiting around."

He's also concerned about putting private contractors to work on many bridges simultaneously. Not so much in the Philadelphia area -- few of the targeted bridges are there -- but in the southeastern Poconos alone "they're starting 10 in the first year. Whose job is to coordinate construction when you have 10 private contracted bridges instead of one PennDOT? Just imagine what happens when the Pocono 500 NASCAR (race) is running."

The traffic jams "will be epic."

PennDOT has said, no tolls.

So "the money will have to come from the highway fund. Will that get in the way of the other projects? Sure. Once they start making these 'availability payments,' it will be taken right off the new highway fund. For 30, 40 years. You will be down to where New Jersey is. In the hole, with no reserves."

Just like with state pensions, Harrisburg appears to be kicking the can down the road: running up expenses now, for others to pay, with interest, when the current lawmakers are gone to their rewards.

No wonder Moody's, citing the state's 'imbalanced' election-year budget, on Monday cut Pa.'s bond rating so it now ranks third-worst in the U.S. -- only New Jersey and Illinois are lower.
PennDOT is also prepping a "P3" project fixing up 11 railroad stations on the Amtrak line from Ardmore to Harrisburg, with procurement solicitations to include "hotels, train stations, (Americans with Disability Act) improvements, urban renewal, parking garages, etc. Who knows how this cost will be covered? But rest assured it will be paid out by future generations, lest we tax current voters."

Sounds almost as good as the Amtrak station built in Hershey a few years back. Amtrak trains don't actually go to Hershey. But the scheme got the town business interests what they wanted: a big, federally-taxpayer-funded parking garage.

Back to the bridges: PennDOT is supposed to award a contract "by Halloween," a week before voters decide Corbett's future.

"It's supposed to come in around $1 billion," which would be the biggest public project in Pennsylvania history, bigger than the $800 million Pennsylvania Convention Center or the $400 million new prison at Graterford. But the contractor is concerned bidders won't find that price attractive. So "I think it will come in higher," and jobs will be dropped off the list to get it to budget.

"If this was a way to get something done that needed done -- a ton of bridges -- and then kick the can down the road, that’s the plan."

Blogger calls TX toll road capital USA

Link to article here.

Watchdog: Drive a highway, pay a fee in Toll Road Capital, USA
By Dave Lieber, Watchdog
Dallas Morning News
July 19, 2014

The emergence of North Texas as Toll Road Capital, USA, represents failure of government of the worst kind. We have to pay for what we could do for free.

They say they don’t raise our taxes. But fees that can cost hundreds of family dollars a month to get to and from are money out of our pocket. Call it by any name you want.

The names are confusing. The SRT? Sam Rayburn Tollway? How many who drive it every day think of Speaker Sam, the long-serving U.S. House Speaker from Bonham?

Or the Bush Turnpike, which had to be changed to President George Bush Turnpike when the son got elected governor. Then the son got elected president, and the North Texas Tollway Authority didn’t change the name by adding middle initials. So the road is named after two men at the same time, although it’s not.

Learn to love tolls: Highway underfunding opens door to toll roads

Link to article here.

This article credits the work of TURF Founder, Terri Hall, to remove support of toll roads in the 2014 GOP platform.

Reinventing the American highway: The promise (and pitfalls) of learning to love tolls
America's infrastructure is dramatically underfunded, and our roads are falling apart. Time to change things up
By Henry Grabar
July 20, 2014
Salon.com

It has always been cheap to drive in the United States, relative to other developed countries. As far as our road budget goes, it’s too cheap.

The money American drivers pay into the federal Highway Trust Fund, through a tax exacted at the gas pump, no longer covers the costs of building and maintaining the nation’s road network.

It’s easy to see why this levy, which dates from the inception of the Interstate Highway System, no longer serves its purpose. The federal gas tax has stood at 18.4 cents a gallon since 1993, rendering its budget-replenishing power woefully small. Neither President Obama nor Congressional Republicans seem to be interested in raising it and resetting the calculus.

SH 130 faces bankruptcy

Link to article here.

Texas' flagship toll road faces financial problems
By David Tanner
Land Line senior editor
July 17, 2014

Since 2006, the state of Texas has put a ton of trust in private companies to build and operate toll roads in exchange for a cut of the profits. Just eight years in, the state’s flagship public-private toll road, the SH 130 that connects Austin and San Antonio, is facing financial difficulties, low traffic volumes and a “junk bond” rating from financial analysts.



Moody’s Investor Service, which twice downgraded the SH 130’s bond rating in 2013, announced this month that the SH 130 Concession Co. had failed to make a full debt-service payment to lenders on the money it borrowed to build Segments 5 and 6 of the roadway.

According to the 50-year contract between the SH 130 Concession Co. and the Texas Department of Transportation, the builder-operator carries the financial risk while the roadway itself remains owned by the state of Texas.



Business interests welcome Obama's push for P3s

Link to article here.

Of course, the Chamber of Commerce crowd welcomes more P3s that subsidize private toll operators and guarantee the private company's profits. We don't need anymore taxpayer-subsidized 'job growth.'

New jobs, new contracting opportunities – all good for Texas
By Mary Scott Nabers
San Antonio Business Journal
July 25, 2014

The concept of financing large infrastructure projects through public-private partnerships got a huge boost recently when President Obama announced the new Build America Transportation Investment Initiative. Geared toward increasing public-private partnerships (P3s) throughout the nation, the presidential initiative will provide all types of assistance to partners launching infrastructure projects.

A “one-stop shop” for assistance – the Build America Investment Center – will help partner cash-strapped governments and cash-flush private-sector firms that are willing to invest in infrastructure projects.

The center will offer a “Navigator Service” for both the public- and private-sector partners. Located within the U.S. Department of Transportation (DOT), it will provide information to private-sector developers and investors about DOT credit programs and various other types of assistance and resources.

Public-private partnerships have already been highly successful in a number of states, including Texas.

The $1.2 billion Dallas-Fort Worth (DFW) Connector project in Texas just last week was named the “P3 Project of the Year” by the American Road & Transportation Builders Association at its annual P3 conference in Washington, D.C. This highway expansion and reconstruction project includes 24 lanes – 14 main lanes, six frontage road lanes and four managed toll lanes. The Texas Department of Transportation teamed up on the project with private partners that specialize in architecture and transportation, construction, engineering and design. The team also included a financial advisory firm, a national law firm and a joint venture construction group. This model public-private partnership resulted in the project being completed six months ahead of schedule and at a savings of $140 million.

Florida alone has completed more than $6 billion in P3s since establishing the state’s Office of Public-Private Partnerships in 2007. Its most prominent P3 project is the $1.1 billion Port of Miami Tunnel. That partnership includes the Florida Department of Transportation, Miami-Dade County, the city of Miami and a private-sector developer.

In Denver, a P3 involving multiple financing sources was used as part of the city’s $2.2 billion FasTracks development that combined light rail, bus rapid transit, development of Denver Union Station and other improvements. The city used federal transportation program grant funds, Private Activity Bonds, a Transportation Infrastructure Finance and Innovation Act (TIFIA) loan and other state and federal funding to construct two new commuter rail lines.

In addition to the investment center, the presidential initiative also calls for a working group that will focus on expanding the use of P3s beyond the transportation industry to include such areas as water, ports, harbors, broadband and the electric grid. Also, the U.S. Treasury Department will host a summit on “Infrastructure Investment in the United States” on Sept. 9. This session will bring together stakeholders including leading project developers, institutional investors and state, local and federal officials. It will focus on innovative financing approaches to infrastructure and give an overview of other resources that can be used to support project development.

Texas has lots to gain from this initiative – hundreds, perhaps thousands, of new jobs and an economic stimulus that will likely ripple through every region of the state.

Mary Scott Nabers is president and CEO of Strategic Partnerships Inc. (spartnerships.com) and author of ‘Collaboration Nation.’ (collaborationnationbook.com). Contact Mary at This email address is being protected from spambots. You need JavaScript enabled to view it..

Obama Shifts to Urge Private Investment in Roads, Bridges

Link to article here.

Bob Poole with Reason Foundation is paid big bucks by the industry to convince lawmakers there’s all this private money out there sitting on a shelf awaiting Congress’ green light. Truth is thirty-three states have already passed legislation to allow public private partnership (PPP) contracts for roads, yet few are advancing. Why? They’re looking for taxpayer-backed guarantees. They want us to pay for their losses while they walk away with guaranteed profits.

There’s nothing stopping any private entity from investing in infrastructure right now today as a truly private venture. But companies don’t want to risk their own capital, they put the word ‘public’ in the PPP contracts precisely because they want guaranteed profit with no risk. Guys like Poole are snake oil salesmen. The private industry doesn’t just invest billions in public roads as a charitable contribution - all of that money has to be paid back with interest and profit through tolls. In Dallas, drivers are paying up to 95 cents a mile for the PPP toll road on I-635 - that’s a horrible deal for taxpayers and three-quarters of the money on that project comes from the taxpayers!

Obama Shifts to Urge Private Investment in Roads, Bridges
By Lisa Lerer and Angela Greiling Keane
Bloomberg Business Week
July 17, 2014

Stymied by Congress in passing a multiyear solution for transportation funding, President Barack Obama is looking to private-sector companies to help fix roads.

Speaking beside a project to repair a closed interstate highway bridge in Wilmington, Delaware, Obama called for making it easier for states and local governments to access private capital for roads, bridges and other infrastructure.

Spain seeks to keep its bailout of private toll roads off its books

Link to article here.

Let this be a warning to Americans, when private toll roads go belly up, they come to the taxpayer to bail them out. The devil is in the details of each contract, and in Texas, no elected official has any oversight over these public private partnerships. In fact, the details are kept secret from the public until AFTER the contract is signed.

Spain looks for way to keep motorway firms' debt off its books
By Sonya Dowsett
Reuters.com
July 17, 2014

MADRID, July 17 (Reuters) - Creditors of a bankrupt Spanish motorway business will meet on Friday to decide whether to liquidate it, piling pressure on the government to come up with a way to avoid billions of debt from nine failed toll road companies ending up on its books.

After more than a year of negotiations between ministries, banks and construction companies, the government has yet to find a way of saving the motorway businesses without debt of over 4 billion euros ($5.4 billion) hitting its finances.

Spain wants to minimise the effect of any rescue on Europe-agreed deficit targets as it negotiates the politically difficult task of bailing out private sector operators with taxpayers' money just two years after sinking over 40 billion euros into the country's failed banks.

If the creditors of the AP-36, a toll road owned by Ferrovial and Sacyr, reject a viability plan put forward by its owners, the business will go into liquidation and under Spanish law the government will have to pay its debts of around 500 million euros.

Others could follow suit, with banks holding debt linked to failed motorway companies of around 3.9 billion euros, with a further 470 million of debt with builders.

The maximum hit for the deficit would be 3 billion euros, a government source said.

"This long, drawn-out uncertainty is terrible. The problem is not getting fixed and it won't solve itself," said a source at one of the motorway owners.

"It's a case of saving them, or letting them fall. It's that simple. Someone will have to make the decision."

Spain has pledged to reduce its public deficit to about 3 percent of GDP by 2016, implying some 35 billion euros will have to be found in the three years from end-2013 to end-2016 to meet the target. The deficit was 6.6 percent in 2013, and so a hit of 3 billion euros would make a challenging task even harder.

Ferrovial and Sacyr declined to comment. A spokeswoman for the Ministry of Public Works also declined to comment on the situation beyond saying the government was still working on a solution. Seopan, the industry body that is negotiating with the government on behalf of the builders, declined to comment too.

STAND OFF
Traffic on the nine toll roads, most of which connect the capital Madrid to outlying towns, has failed to reach sustainable levels during a recession.

Under Spanish legislation drawn up over 40 years ago, when a private motorway goes bust, the state has to repay owners for the cost of the land and the construction. The government has sought a way of funding its obligations through public debt rather than through the deficit.

Earlier this year, it proposed creating a holding company for the assets of the nine motorways while forcing a 50 percent haircut on the banks and paying the remaining debt, of around 2.3 billion euros, with a 30-year bond with a coupon of 1 percent plus a variable component dependent on the traffic on the roads.

But banks rejected this because they said the coupon on the bond was too low, as it compares with interest payments of over 5 percent on the government bond of this maturity.

"The coupon is so low, it would be like taking another cut on top of the one we've already swallowed," said a source at one of the creditor banks.

"We're waiting for some gesture from the government, but there's been nothing," he added.

The government has also had problems convincing the European Commission that such a scheme would not constitute state aid, one source with knowledge of the matter said.

The European Commission said it was in contact with Spanish authorities regarding plans to set up a public company to deal with the highways in bankruptcy proceedings, but declined to comment further.

Cintra's hijack of I-635 in Dallas to cost commuters up to $24/day

Link to article here.

Cintra’s spokesperson has lost their minds if they think paying up to 95 cents a mile, eventually $24/day roundtrip, in tolls is a ‘hit’ with North Texas drivers. The article says the 13-mile commute will cost about $7, but not during peak hours. The published toll rate will be up to 95 cents a mile depending on the time of day and level of congestion on the lanes, so the cost could be up to $12 one-way.

No one in their right mind signs-up to fork over that kind of money on a daily basis unless they’re desperate or independently wealthy. In fact, drivers are flocking to the side roads when they see the toll rate jacked-up in real time as they’re driving to work. They may get time reliability, but they can’t get price reliability so they can’t exit fast enough. Long-term this thing is a nightmare, and those who can avoid living or working in that area will do so.

More Toll Lanes To Open Along I-35E This Weekend
By BJ Austin & Krystina Martinez
KERA News
July 10, 2014

Dia Kuykendall, the director of corporate affairs for LBJ Infrastructure Group, says the new, elevated segment will lift drivers over the chronically congested I-35E/I-635 interchange and set them down at I-35 and Loop 12. The return trip will quicken the commute from Loop 12 north to eastbound 635/LBJ. The grand opening price range is 65 cents to $1.65 for the 3.6-mile stretch.
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