P3 Panel Chairman Encourages Private Assistance for Infrastructure Projects

The head of a special House panel on public-private partnerships indicated earlier this month his intent to push his congressional transportation colleagues to support programs that augment the role of banks and private firms to support certain infrastructure projects.

At a hearing of the Public-Private Partnerships (P3s) Panel of the Transportation and Infrastructure Committee on June 16 in New York City, Chairman John Duncan (R-Tenn.) said incorporating financial institutions and private companies in the construction of large-scale infrastructure projects would benefit states and municipalities struggling to maintain their transportation systems.

“Fiscal constraints on all levels of government have made addressing the challenges and the needs more difficult, particularly for the large and complex projects,” Duncan said, noting that the “need to tackle big, complex infrastructure projects and the private sector’s resources and expertise is at the heart” of P3s. 

The Chairman added that private companies are seeking to participate in investment opportunities, “particularly those with stable returns over a long period of time.”

But Elliott Sclar, a professor of urban planning at Columbia University and a privatization skeptic, told the panel that in P3 agreements it is difficult to calculate the rates of return for companies. And that, he said, puts governments at greater financial risk when a project does not deliver on its projections. Sclar also called on lawmakers to establish an agency that provides municipalities impartial guidance on the financial risks surrounding large-scale construction agreements.

“My concern in all of this is that you can’t have good (P3s) … if you don’t have competent people in the public sector doing the other piece of it,” Sclar said.

Duncan has indicated that input from his panel’s roundtables would assist lawmakers in coming up with a long-term transportation policy bill that updates the 2012 MAP-21 highway law. MAP-21 expires at the end of September.