1. Public Private Partnerships: Their Limits and Potential for the Private Provision of Transportation Infrastructure Adrian Moore, PH.D. Vice President Reason Foundation Adrian.moore@reason.org

2. Reason Foundation, http://www.reason.org 2 Mind the Gap Existing Highway and Transit Needs Estimates

3. Reason Foundation, http://www.reason.org 3 The gas tax is not a viable funding alternative (Decline in real value of the fuel tax $1997) 1950196019701980199020002010 Average 5.00 4.00 3.00 2.00 1.00 0 Cents per mile

4. Where will the money come from? Federal level interstate and goods movement needs are appreciable Federal level interstate and goods movement needs are appreciable But, most of the gap is state and local But, most of the gap is state and local More state and local commitment More state and local commitment Public Private Partnerships Public Private Partnerships

5. Reason Foundation, http://www.reason.org 5 Transportation’s “Brave New World” Open road tolling Open road tolling Dynamic tolling Dynamic tolling Private equity Private equity Public funds focus on “untollable” projects Public funds focus on “untollable” projects

6. Reason Foundation, http://www.reason.org 6 Technology, pricing and stages of road privatization Limited Access Highways (now) Major arterials (10 years) Local roads (20 Years?) 1 2 3

7. Reason Foundation, http://www.reason.org 7 Paris A86 Extension ($1.5 billion)

8. Reason Foundation, http://www.reason.org 8 Viaduc de Millau: $500 million

9. Main Lanes Managed Lanes Direct Transit Access Ramps Direct Access Road to Arterial BRT Station

10. 10 Capitol Beltway HOT Lanes

11. New Toll Roads: Extensions New Toll Roads: Extensions South Bay Expressway (SR 125), San Diego (in operation) South Bay Expressway (SR 125), San Diego (in operation) Dulles Greenway, No. Virginia (in operation) Dulles Greenway, No. Virginia (in operation) SH 130, Austin to San Antonio (financed) SH 130, Austin to San Antonio (financed) Mon-Fayette Expressway, Pittsburgh (pre-proposal stage) Mon-Fayette Expressway, Pittsburgh (pre-proposal stage)

12. New Toll Roads: Missing Links New Toll Roads: Missing Links Triangle Expressway, Raleigh, NC (pre-RFQ stage) Triangle Expressway, Raleigh, NC (pre-RFQ stage) Outer Beltway, Jacksonville, FL (RFQ stage) Outer Beltway, Jacksonville, FL (RFQ stage) Southern Beltway, Pittsburgh (pre- RFQ) Southern Beltway, Pittsburgh (pre- RFQ) Grand Parkway, Houston (2 unsolicited proposals) Grand Parkway, Houston (2 unsolicited proposals)

13. Managed Lanes, Conventional Managed Lanes, Conventional I-15 ML expansion, San Diego I-15 ML expansion, San Diego Katy I-10 MLs, Houston Katy I-10 MLs, Houston I-495 Beltway HOT lanes, No. Virginia I-495 Beltway HOT lanes, No. Virginia I-95/395 HOT lanes, No. Virginia I-95/395 HOT lanes, No. Virginia I-95 express toll lanes, Baltimore I-95 express toll lanes, Baltimore I-595 express toll lanes, Ft. Lauderdale I-595 express toll lanes, Ft. Lauderdale I-70 toll truck lanes (MO, IL, IN, OH) I-70 toll truck lanes (MO, IL, IN, OH)

14. Reason Foundation, http://www.reason.org 14 What are PPP’s? Lease, not sale of asset Lease, not sale of asset Source of new capital Source of new capital Typically raise more money than public agenciesTypically raise more money than public agencies Upfront fees and/or toll revenue sharingUpfront fees and/or toll revenue sharing Better management Better management Life cycle managementLife cycle management New infrastructure faster New infrastructure faster Minimize risks to taxpayers Minimize risks to taxpayers

15. Reason Foundation, http://www.reason.org 15 How They Work Private firm designs, finances, builds, operates for N years Private firm designs, finances, builds, operates for N years Concession agreement protects public interest Concession agreement protects public interest Length of leaseLength of lease Credible toll revenue streamsCredible toll revenue streams Timeline for improvementsTimeline for improvements Specify toll rate increasesSpecify toll rate increases Competitive selection processCompetitive selection process

16. Reason Foundation, http://www.reason.org 16 Changes in Responsibilities

17. Reason Foundation, http://www.reason.org 17 Concerns about PPPs “Real” “Real” PrivacyPrivacy Property rights/Eminent domainProperty rights/Eminent domain Rent SeekingRent Seeking “Efficient” socialism“Efficient” socialism Red herrings Red herrings Foreign ownershipForeign ownership Monopoly pricingMonopoly pricing

18. Reason Foundation, http://www.reason.org 18 ? Adrian Moore, Ph.D. Reason Foundation Adrian.moore@reason.org