Protecting Public Assets

Across Pennsylvania, cash-strapped governments are struggling to plug gaping holes in their budgets. At the same time, Pennsylvania’s roads and bridges remain congested and in desperate need of repair.

Enter global private infrastructure companies and their backers in the world of investment banking. Touting the benefits of public-private partnerships, these companies are seeking to build new private highways or offering up-front cash for existing roads… all in exchange for the right to charge and collect tolls on motorists for decades to come.

Road, parking, and other privatization proposals offer a hard-to-resist “quick fix” for state budget and transportation challenges. But poorly conceived privatization deals can have hidden costs and big potential downsides for the public.

PROTECTING THE PUBLIC FROM BAD PRIVATIZATION DEALS

To protect the public interest, Pennsylvania and its local governments should avoid privatization of existing infrastructure and allow private deals of new construction only under the following conditions:

•The public should retain control over decisions about transportation planning and management.
• The public must receive full value so future toll revenues won’t be sold off at a discount.
• No deal should last longer than 30 years because of uncertainty over future conditions and because the risks of a bad deal grow exponentially over time.
• Contracts should require state-of-the-art maintenance and safety standards instead of statewide minimums.
• Complete transparency and public disclosure are needed to ensure proper public vetting of privatization proposals.
• There must be full accountability in which the legislature must approve the terms of a final deal, not just approve that a deal be negotiated.