Collaboration in Civic Spheres

Private cash might save state money on two big toll projects

by January 5th, 2012

A study summary presented yesterday to the Washington State Legislature’s Joint Transportation Committee says money from profit-motivated private companies could be a way to deliver better value to taxpayers on construction and management of some toll lane projects. Two identified for possible public-private partnerships – also known as “P3s” – were the I-405/State Route 167 corridor and the southeast extension of State Route 509 from near Sea-Tac Airport to connect with I-5. Each would include so called “High Occupancy and Toll” or “HOT” lanes available for a sliding fee to solo drivers and free to carpoolers. The summary released yesterday says, “Despite the higher cost of private capital, it is sometimes the case that P3 delivery can be a better value to the public. Transferring construction and long-term operating, maintenance and preservation risks to the private sector can sometimes result in significant cost savings to the public” although “sometimes…traditional public sector delivery is the better value.”

The study was ordered by the legislature. It’s intended to educate state lawmakers and officials and the public on the controversial idea of transportation P3s. The approach has been used elsewhere in North America, Europe and Australia. The report summary notes that three other Washington state tolling projects don’t now appear as if they would pencil out as P3s. Those are the southward extension of SR 167 to I-5 near the Port of Tacoma, the Columbia River Crossing bridge replacement connecting Clark County, Wash. with Portland, Ore., and the State Route 2 Monroe Bypass.

One major tolling project in the Seattle region was not included on the list of those given a preliminary analysis in the study. Even with new electronic tolling the State Route 520 bridge replacement faces a funding shortfall of $2 billion. But because the project is already underway and there are no formal guidelines yet in the state for toll lane project P3s, lawmakers chose not to direct the committee to include it. Some officials would like to apply electronic tolls to the I-90 floating bridge to help meet costs for 520. Other options to close the 520 funding gap would be increased taxes or fees of some type or project cost reductions.

But even where considered possible, don’t hold your breath for any toll road P3s very soon in Washington state. The study summary emphasizes it will require a multi-year process to establish a legislative and administrative framework for evaluating and selectively implementing surface transportation P3s in Washington state and that protecting the public interest needs to be a paramount concern.

To do that the study will recommend lawmakers enact provisions that:

  • the state retain ownership of roads or lanes subject to P3s;
  • there be a requirement that P3s deliver better value to taxpayers or they can’t be chosen as an option;
  • “prevailing” (union-scale) wages and apprenticeships would be required;
  • contracts with private companies would have cancellation clauses to ensure long-term service quality.

The full study is in final draft form and will be about 250 pages in length. When ready for public release within several weeks it is to be added to the committee’s existing page of links to working documents used in the study.

Public Data Ferret’s Transportation Finance – Washington state archive

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