Rebuilding America: The toll of public-private partnerships
In our new series, Rebuilding America, we take a closer look at the country’s infrastructure.
President Trump is promising a major overhaul of America’s infrastructure, but his trillion-dollar proposal might not be enough. Public-private partnerships are widely expected to play a big role in his plan. In those types of partnerships, fewer taxpayer dollars are needed because private industry picks up some of the cost.
Virginia is a big believer in public-private partnerships. Officials points to successes like the 495 Express Lanes where drivers can choose to pay a toll to get around congestion. But those success have come with some costly mistakes.
Linda Dyer’s daily commute is taking a toll. Whenever she leaves home, she’s paying to use tunnels that used to be free. Spending about $1,200 a year in tolls, she’s thinking about moving elsewhere.
“My biggest concern – is it going to affect how easy it is for me to sell my house?” Dyer said.
Virginia agreed to a 58-year deal with a private company to modernize and expand the tunnels linking Portsmouth and Norfolk, two military towns separated by the Elizabeth River. The tolls to cross can run a driver $5.25 each way.
“The tolls have basically become a stigma to the population of Hampton Roads, between Norfolk and Portsmouth, mainly because of the fact that it’s almost putting up a wall between two cities inside of one community,” said Tony Goodwin, president of the Old Towne Portsmouth Business Association and a Trump voter.
Many in working class community couldn’t afford their commute, forcing the state to pony up nearly $300 million in extra funds to subsidize the tolls. According to Virginia Secretary of Transportation Aubrey Lane, that means the state could have done the project themselves.
“Great transportation project that needed to be done. The infrastructure absolutely was needed. The way we financed it was not such a great deal for the Commonwealth of Virginia,” Lane said.
Lane is a Republican in a Democratic administration and supports public-private partnerships. They are business deals thought to be at the center of Mr. Trump’s $1 trillion infrastructure plan. Lane said public-private partnerships work in “heavily urbanized areas where there’s the ability of congestion, where people are willing to pay a price to get out other that.”
That’s what’s happening in northern Virginia, where express lanes have been added to unclog several freeways. Drivers pay a toll to avoid traffic, while helping ease congestion in the free lanes.
“We have found here on 95 that we have freed up 20 percent more capacity in those lanes by people opting into the HOT [high-occupany toll] lanes. So it’s a better, more efficient use of the entire roadway,” Lane said.
To work, public-private partnerships must be able to show a steady profit, which many infrastructure projects simply won’t. Fifteen states currently do not allow their use, which could limit the impact of Mr. Trump’s plan.
Asked whether the tunnel project was a cautionary tale to the Trump administration, Goodwin said it should be.
“I think that what’s most important is they need to simply look closely at how the project is being funded, and at the end of the day, what are the taxpayers going to be responsible for under the arrangement that they make with these public private partnerships?” Goodwin said.
In the U.S., public-private partnerships make up about 1 percent of U.S. infrastructure projects. In Europe, it’s closer to 10 percent. Virginia now can only move forward with one after showing a private company can deliver it at less cost to taxpayers than if the state does it itself.
