Mar 8, 2014
The Problem With ‘Public-Private Partnerships’
Posted on Jan 5, 2013
When a plan to construct the first modern privatized highway in the United States did little to ease congestion, blocked residents from making further improvements and cost taxpayers hundreds of millions of dollars, Californians had the opportunity to learn a lesson about the folly of privatizing transportation projects.
In 1995, California Private Transportation Company won a contract to complete a $130-million project using mostly private money to build express toll lanes along Orange County’s State Route 91 freeway. To recoup expenses, politicians gave the company a 35-year claim to operate the toll route, promising Californians that privatization would lead to greater safety, efficiency and savings.
The agreement did not alleviate what local traffic reporters called the “Corona Crawl,” and when state and local officials announced plans to make their own improvements, CPTC filed a lawsuit, claiming additions to the road could reduce the company’s profits. In 2003, the Orange County Transportation Authority purchased the SR-91 toll lanes for $208 million and put an end to the disaster.
In 2004, the California State Legislature stopped its experiment in highway privatization. But other states began their own projects. And in 2009, California once again authorized a “public-private partnership”—also known as “P3”—to provide highway services and other public goods.
—Posted by Alexander Reed Kelly.
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