Sam Staley
2007-05-30 07:00:00.0
Current rank: Not ranked

WASHINGTON -

If anyone needed evidence that Congress can screw up transportation policy on a grand scale, look no further than the letter by Rep. James Oberstar, D-Minn., and Rep. Peter DeFazio, D-Ore., to governors and state transportation department heads on May 10. “We write to strongly discourage you from entering into public-private partnership agreements,” they write, referring to the innovative tool being used by Texas, Georgia, Indiana and Illinois and other states to fund desperately needed roads and infrastructure.

Leaping over a line rarely crossed in more than 50 years of transportation policy making, Oberstar and DeFazio threaten to “undo” any agreements they or their congressional colleagues believe “do not fully protect the public interest and the integrity of the national [transportation] system.”

The congressmen are the highest ranking members of the House Committee on Transportation and Infrastructure, so their words and intent carry weight. But their claims lack any consideration of the evidence. …

If these are the projects that have the congressmen worried, they need a lesson in basic cost-benefit analysis. The city of Chicago netted $1.8 billion from its agreement. Indiana faced a $3.8 billion shortfall in its 10-year transportation plan before it leased its toll road. These leases did more than allow the state and local governments to fund their transportation plans. They committed private companies to do something their agencies could not: Invest in the continual maintenance of their roads, upgrade these facilities to keep traffic moving and shift the burden of financing these investments from taxpayers to the private sector. …

Moreover, contrary to the congressmen’s naive and simplistic characterization of the private sector’s interest in their letter, the U.S. is behind the curve. The entire London transportation system — including the subway, local bus and intercity bus system — is managed by private companies under public-private partnerships.

The French government divested itself of its remaining equity interest in the private companies that manage its intercity highway network in 2005. China and India are aggressively using private companies to provide transit services and roads in many of their cities.

You can read the full commentary on Reason’s Web site at: www.reason.org/commentaries/staley_20070522.shtml.