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Commentary

Let’s Please Put the P3 Pep Rally in Its Proper Perspective

by Robert Whalen, Executive Editor
The Bond Buyer

Much noise has been made over the past few years about how state and local governments throughout the United States are going gaga over the prospect of inking public-private partnerships as a means to finance infrastructure development and relinquish services traditionally operated by the public sector.

Private sector professionals laud the so-called P3 contracts that were negotiated for the rights to operate the Chicago Skyway and the Indiana Toll Road, along with all of the plans in Texas that, until recently, seemed almost certain to happen. These dealmakers have quite an influential and powerful ally in the White House these days, as President Bush’s Department of Transportation and its Federal Highway Administration have become high-profile, high-decibel cheerleaders for the cause.

Indeed, Transportation Secretary Mary Peters just a few weeks ago stumped for P3s in Pennsylvania, which is considering how it might scare up some cash by leasing out its extensive tolled turnpike system. There are similar considerations taking place in Alaska, Florida, Georgia, and New Jersey, to name just a few.

About six months ago, some of the sharpest minds in transportation infrastructure finance got together at a conference in Houston hosted by The Bond Buyer. Prospective P3 projects generated quite a buzz through the crowd of bankers, lawyers, advisers, investors, and public officials. One of the central themes articulated by speakers and attendees — including at least a few proud Texans — is that the Lone Star State is leading the way on P3 transactions with its ambitious road building agenda.

It turns out that Texas might be leading the nation in a different direction. State lawmakers there want to put a halt to the P3 gallop and have called for a broad-based moratorium on such contracts. Sound crazy? Take a deep breath. Think things over. It’s not a bad idea.

This is not the diatribe of a cynic, mind you. If it was, one might come up with some other meanings for P3: politicians pandering to profiteers; public purses pilfered; proverbial pots of pyrite; or piracy, plunder, and poppycock. But perhaps that’s too intemperate, and it’s off the intended point. Read the rest of the article HERE.