The Moment for Public-Private Partnerships Is Now
Can the United States recover from the current economic crisis and compete in the 21st century? Of course we can. We have the brightest minds, the best universities, the most dynamic companies, and a thriving tradition of innovation and entrepreneurship.
To regain our economic competitiveness, however, we must face up to a hard truth: our infrastructure is falling apart.
Ever since the 1970s, public investment in infrastructure has been steadily declining. And today, we are paying the price -- with traffic-clogged roads, rusting bridges, delayed trains, canceled flights, overcrowded classrooms, outdated hospitals, failing water and sewer systems, and an obsolete energy grid.
Here's another hard truth: just as America's infrastructure is falling apart, our competitors are strengthening theirs. China, for example, plans to build 55,000 miles of highways -- more than the entire length of the American interstate highway system -- and 7,500 miles of high-speed rail between now and 2020.
The good news is that we already possess the technology and expertise to build a world-class infrastructure. The bad news is that it will be expensive -- and state and local governments, which traditionally finance infrastructure projects, lack the necessary resources. (While President Obama's economic stimulus plan has been successful in putting people back to work, it is, by design, a short-term solution that represents only a small fraction of the long-term investment we need.)
Therefore, if we are to finance and build a world-class infrastructure for America, we must seek new solutions. And a promising solution is at hand: public-private partnerships.
By combining government oversight with private-sector efficiencies, we can build more projects; we can build them more quickly; we can improve services for our citizens; and we can lower costs for taxpayers. And by infusing billions of private-sector dollars into infrastructure, public-private partnerships would also put millions of Americans back to work.
Rigorous accountability measures are a necessary part of any public-private partnership. Private-sector companies given the privilege of designing, building or operating public facilities must be held to the same thorough standards as public agencies -- including strict labor and environmental standards.
When these accountability measures are in place, public-private partnerships work. An increasing number of highways -- including the new I-595 in Florida -- are being designed, built and operated by private companies. New York City is building better schools at a lower cost by constructing them as part of larger mixed-use real estate developments. California has passed legislation to expand use of public-private partnerships in conjunction with stimulus spending. In Pennsylvania, the city of Pittsburgh is using public-private partnerships to expand parking in the city center.
And this week, New York's Commission on State Asset Maximization released a report recommending 26 pilot projects statewide -- from high-speed rail to wind power on the Great Lakes -- where public-private partnerships can move projects forward faster and at lower costs.
The moment for public-private partnerships is now. Our nation's infrastructure needs to be repaired and expanded. With 10 million Americans out of work, we need to create jobs. And, due to the recession, states and local governments are facing large deficits, limiting our ability to build.
Additionally, there is great demand among the private sector for these partnerships. Infrastructure assets generate stable, inflation-protected returns that are largely shielded from market volatility. That's why -- despite the overwhelming capital and liquidity constraints facing the global economy -- equity infrastructure funds continue to grow rapidly.
We strongly encourage our fellow governors and mayors to explore these types of partnerships. And we encourage the federal government to help states and local governments advance public-private partnerships.
President Obama, Transportation Secretary Ray LaHood and Congressional leaders have already shown a promising interest in public-private partnerships -- and we encourage them to do even more. For example, in the upcoming federal transportation bill, Congress should streamline bureaucratic processes and allow states and localities greater flexibility in seeking innovative approaches to infrastructure financing.
If you happen to be stuck in traffic, stranded at an airport, or crowded into a tiny classroom, our infrastructure crisis may seem insurmountable. In fact, it's a problem we can solve -- but only if we have the courage to seek new solutions. Public-private partnerships must be a part of that mix. They will help unlock the resources we need to build a world-class infrastructure -- and restore America's competitiveness for decades to come.
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I think the phrase you are looking for is, "socialized risk, privatized profits." But you do get the main point. It's another way of saying "crony capitalism."
The Governor of California, true to his republican roots, not only wants Texas and other enities to run the prisons, Social Service programs, and Schools of California by outsourcing those jobs, but moreover wants to turn California into a welfare state by having these same enities from Red states partially run the state's jobs......and he's trying to do this by cutting ALL benifits to the elderly, young, and those who need assistance to helthcare, work and other items which the State should be responsible for.....and what's worse, this jerk of a governor seems to think that having private businesses will save California money....which is a total crock.....I REALLY think that the people of California deserve and MUST have better State Government than what is leveled by this governor and his republican cronies.
Proposal for a national infrastructure bank, authored by Chuck Hagel and Chris Dodd:
http://dodd.senate.gov/multimedia/2007/080...
I believe it was proposed in the Democratic plank during the campaign.
They once advocated the indirect "trickle down" effect. Now they just want to piss on us directly.
Old wine in new bottles. Public-private partnership is not the solution for our crumbling infrastructure its in fact one of the causes. Since the Reagan years both democrats and republicans have been consumed with the free market mantra and have been failing to provide money for basic infrastructure, instead selling it off to companies that let it decay while they make short term profits.
The Bush administration took this philosophy to the maximum in Iraq. They sold off virtually the entire public infrastructure. Some people got very rich but the people of Iraq got sewage in the streets and no electricity. Another example is the military. They used to have people who were soldiers and also functioned as cooks, logistics, etc. That has all been outsourced with the result that it costs ten times more and works ten times less efficiently. In Iraq military buildings often electrocute people due to faulty wiring. When the army goes into a fight they now have to worry about protecting their support people rather than having them be soldiers who could defend themselves. A final example which is quite relevant to gov. Schwarzeneger is Enron. The power free market was supposed to deliver cheaper power to consumers and instead it gave us in California regular blackouts. One of the governors first acts was then to dismiss a lawsuit seeking to get back billions that Enron had stolen from CA via price manipulation. We could sure use that money now.
Taxpayers would be better served by owning the infrastructure. The private firms involved expect a big payout. This is just a stealth tax. Let's start with eliminating the trade deficit - over $700,000,000 per year - and rejuvenating the U.S. manufacturing sector. And keep the profits at home.
I understand that the writers are trying to solve a problem created by lack of good public policy. But this is not the way to do it. We should look overseas for best practices in industrial policy. And reform health care so it is a reasonable percentage of GDP and not robbing the rest of the economy.
Right. One day we wake up and find private companies own the roads, the water systems, the schools and be able to demand payment for access much the same way payment for access to health care is extracted now. What a wonderful world that will be.
Private-public partnership: the taxpayers drive up the value of stock held by elected officials.
so-called "public-private partnerships" are the definition of fascism.
No thanks.
fully agree.
taxpayer should own and control the infrastructure. private business can use it and properly pay for that use. that's all that is needed to fund it.
Well and succinctly stated.
We have been witnessing the effects of Corporate self-regulation, ... and they are disastrous. The notion that the salvation of public infrastructure is the engagement of private interests in their creation and management, is pure folly!
As an example, the PA Turnpike is in the best condition it has been in my memory, ... and Governor Rendell wants to give away leases to manage it, ... and its revenue stream, to corporations? Why? For the sake of the lease revenues alone? No, ... that would the public even less recourse than we have now to correct problems, and resolve concerns.
This is was a bad idea even before the financial debacle of the Bush era, ... and now it is unconscionable.
No way, governors!
More BS from the party that almost destroyed America. How about fixing the tax laws in CA, for income and property? These are terribly designed to help the rich and screw the middle class.
Agreed. Public private partnerships are just licenses to steal from the taxpayer. This country is where it is because GOP free market fundamentalists assumed private companies could do the public's work better than government. All they managed to do is prove just how wrong that notion is and make corporate criminals like KBR filthy rich in the process. Instead of more of the same magic beans, the government needs to get back into the "business" of government!
1978 called. They want their pablum back.
Seriously? This parade of failed governors' best idea is public-private partnerships? Really?
No wonder our nation is in such peril. While privately owned roads or schools or jails or airports might or might not be sensible, it is surely a minor part of any actual solution to our problems, many (if not most) of which stem from the cowardice of political leaders like these to persuade taxpayers to pay an adequate level of taxes.
We're doomed.
"Public/Private Partnerships" = Deregulation
= GOP doublespeak on how to give taxpayer's money to Political Chronies like Enron, Blackwater, and Banks in order to enrich chronies and get great paying jobs when our term limits are up!
Three Governors speaking in unison have made an important point. I wish there were more details on how some of the projects have actually been working. As in, what are the intricacies of public-private ownerships?
http://technbiz.blogspot.com
New GOP double speak for the same GOP privatization/deregulation mantra that gave us higher energy bills after Enron and the disasters of Abu Gharib, Blackwater, Hallburton.
The way they work is this, ... A "Magic Slate" is erected on the front of a stadium, or a public toll road, and they change the name every time the corporation gets merged, or goes belly up. It is a bit like handing a loaded shotgun to a two-year old!
The public assumes the risk and assures the upfront funding. Private companies reap the profits and enjoy monopoly ownership of what should be the common infrastructure. See ya around, podnuh.
Funny. The word "accountability" made it into this piece. It's kind of like calling a strip joint a "gentleman's club".
Proof that they were in it to break it. Republicans lead us to ruin, and now sit back and critique the recovery.
How Americans can still follow them is amazing to me. Conservative policies, and major benefactors(corporations) need to stand aside and take their just desserts. Trickle down never worked, no nation ever survived using the theory. Small Government leads to puppet regimes and banana republics that just do corporate bidding.
America needs to bury the shameful fact that is our Conservative party operatives. So what if Pharma and Oil lose money for 20 years, F&#K them!
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