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U.S. Lags Behind World for Planning and Funding Crucial Transportation Projects According to TMACC

Posted on: Tuesday, 24 January 2006, 12:00 CST

Over the past 20 years, joint public and private transportation projects planned and funded in the United States accounted for merely 12 percent of the world's $888 billion expenditures for shared road, rail, airport, seaport and waterway construction operations. Innovative funding for transportation projects through creative solutions such as public/private partnerships, however, is beginning to pick up the pace in the U.S., but not yet in Pennsylvania.

At a recent conference on innovative funding for transportation projects held at the Penn State Great Valley campus in Malvern, Pa., government and industry transportation experts discussed the value of getting the private sector involved in helping solve growing transportation challenges. The theme centered on encouraging government agencies to adopt alternative funding mechanisms beyond traditional procurement schemes to bring in new sources of capital for much-needed transportation projects.

Michael Herron, executive director of the Transportation Management Association of Chester County, which co-sponsored the conference with the Greater Philadelphia Chamber of Commerce's CEO Council for Growth, says that public/private partnerships enable government agencies and private investors to bring together resources to accomplish crucial projects that neither could carry out individually.

According to Ben Redd, a principal of Integrated Program Services, Inc., a transportation consulting firm, public/private partnerships and alternative procurement provide the ability to complete projects in shorter time periods and at less cost.

"In addition, you get not only a balance of risk profiles, but also a balance of people focused on what they need to do to get the job done," Redd says.

But in Pennsylvania, current legislation doesn't allow government agencies, such as the Department of Transportation, to solicit private sector bids for state authorized projects, large or small. Other states such as Virginia and Texas have become models in encouraging private participation in their states' transportation programs. Ten years ago, Virginia passed legislation allowing any public entity that has responsibility for operating and managing a transportation project to accept either solicited or unsolicited bids from private contractors.

"Among our goals was tapping into the efficiencies available from the private sector in delivering transportation projects," says Deborah Brown, director of Innovative Financing and Revenue Operations for the Virginia Department of Transportation. "Also, we wanted to avail ourselves of access to capital that we previously had not available to us. Moving forward, it's very important that we receive additional proposals to develop projects under our program and that private investments are a part of the financing plan."

Herron says that Pennsylvania has the opportunity to join Virginia and other innovative states in providing long-term legislative solutions to financing its chronic transportation needs.

"We can applaud Governor Rendell's Transportation Funding and Reform Commission, which is currently holding public hearings around the state, as a first step forward," Herron says. "We need clear, objective and creative thinking about the benefits of bringing public and private resources together. Then, we must have decisive action in implementing enabling legislation to fund our crucial transportation projects before congestion and lack of public transit options truly grab us by the throat in every part of the state."

James A. Crawford, former executive director of the South Jersey Transportation Authority, said that trust is an essential ingredient in successful public/private partnerships. Crawford oversaw construction of the 2-1/2 mile Brigantine connector roadway to the Atlantic City Expressway, which was partly financed and managed by the Mirage Casino.

Crawford says that from a government perspective, it is not easy "to put that much faith and trust into a private partner. It takes a change in your corporate culture and a huge amount of trust," he says. "We have to be willing partners, and each partner has to benefit."

According to Tom Caramanico, president of McCormick Taylor, Inc., and member of the Greater Philadelphia Chamber of Commerce's CEO Council for Growth, "We need to find ways to get appropriate funding and get ahead of competing states. We want to stop running to the government to solve our problems.

"We need to look at the things that make our businesses successful and apply them as new ideas for solving our transportation infrastructure problems," Caramanico says. "So, we don't want to go to government and say, 'Make this happen.' What we want to do is go to Harrisburg and say, 'Let this happen, allow public/private partnerships and private investments in our transportation projects happen.'"

The Transportation Management Association of Chester County is a non-profit corporation established to promote, educate and provide transportation and employment solutions for private industry and non-profit organizations. Working with government, planning and transportation providers, the TMACC is comprised of over 75 corporate and institutional members.

Source: Business Wire

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