In recent months there has been a heightened focus on infrastructure in the U.S. Ever since the first conversations of economic stimulus last fall, elected officials and pundits have turned to investing in infrastructure as a means to help claw the country out of recession. Benefits of infrastructure investing, when invested in long-term projects and not just pothole repair, are well documented; creating immediate job opportunities and lasting improvements to the economic competitiveness of a region.
Virginia can benefit from private investment in infrastructure as well. Indeed, many projects have either been completed or are in progress using private capital, often alongside public money to complete much needed infrastructure.
Our recent history with private infrastructure investment started with the Greenway in Northern Virginia and will soon include the High Occupancy Toll Lanes on the Beltway and eventually on I-95 all the way to Fredericksburg. The Midtown Tunnel in Norfolk-Portsmouth is another example of private money coming to bear on a much needed transportation investment.
Indeed, despite the economic troubles of today, public-private partnerships remain alive and well. There remains significant private sector capital waiting to invest in building and operating infrastructure. For us, they represent significant value, as they bring new infrastructure forward many years sooner than if we depended on public money alone. Studies also show that these projects tend to be more cost effective and are more likely to be delivered on time.
There are numerous other potential PPP projects in Virginia that would provide the double benefit of addressing the state’s transportation requirements and providing much needed long-term economic stimulus. Generally speaking, urban congestion relief offers the biggest benefit to commuters and the state while also remaining attractive to private developers. These might include the third crossing in Hampton Roads, expanding Route 66 inside the Beltway in Northern Virginia and even the on-again/off-again truck lane project on I-81 down the Shenandoah Valley.
Unfortunately, two recent bills introduced in the US Congress by Senators Bingaman (D- New Mexico) and Grassley (R-Iowa) could make private sector investment in highway infrastructure less attractive and send those dollars to other investments.
The Transportation Equity for All Americans Act (S. 884) and the Transportation Access for All Americans Act (S. 885) would discourage the use of concession public-private partnerships for highway projects. Given the significant infrastructure funding gap this nation has, it is surprising that some are advocating disincentives for private infrastructure investment. Instead, Congress should look for ways to incentivize states to take greater care of their infrastructure, encourage them to utilize all the tools necessary to address the infrastructure gap and put people back to work. This means private investment dollars should be encouraged.
Virginia’s Congressional delegation should understand the importance and value that PPPs have had in our transportation infrastructure. Indeed, while Governor; Senator Mark Warner saw first hand how private dollars came to the incredibly congested Northern Virginia area with the HOT lanes that are now becoming a reality on the Capital Beltway. Senator Warner’s highly respected Secretary of Transportation, who Governor Kaine kept because of his abilities, is a credible proponent of public private partnerships.
Hopefully Governor Kaine’s special relationship with President Obama will insure the continuation of these critically important public private partnerships. Frankly, states should be encouraged and rewarded for bringing private monies to the table to handle important infrastructure needs whether in transportation, education or other areas where governments are involved. For instance, Chicago recently received a check for over $1 billion for contracting out the modernizing, management and maintenance of its parking meters over the next 75 years. One billion dollars!
And Virginia’s Port Authority has been approached with a private offer to take over the management of that important facility for many decades to come in exchange for a check in the hundreds of millions of dollars.
As our economy struggles to get back on its feet, there are still private investment dollars available for transportation infrastructure and other vital project previously left only to government funding. We should take full advantage of every private dollar we can while maintaining the best interests of the taxpayers in the process.
Our next governor will have huge opportunities available to him to encourage much greater private investment in our infrastructure needs here in Virginia. Let’s hope he takes full advantage of this opportunity.