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It is fairly understood that America’s transportation infrastructure is in crisis. In 2008, the Federal Highway Trust Fund –- the primary source of federal transportation funding – nearly went bankrupt. And, it is about to again. Its main source of revenue –- the federal gas tax — has not been raised since 1993 and the cost of maintaining and upgrading the nation’s roads and bridges increased 50 percent in the last ten years.
Short on cash and desperate to find ways to finance transportation, states and municipalities are now considering public-private partnerships to fill the void. In these deals, a private company will pay large up-front fees and will shoulder the costs of managing and sometimes even building a toll road, in return for the rights to keep the tolls. These leases can last as long as 99 years. These deals often contain “non-compete clauses” –- provisions that forbid states or localities from improving nearby existing roads or building new roads or transit systems that might reduce traffic on the toll road.
Public-private partnerships have been used in Europe and South America for decades, but they are controversial in the U.S. Advocates see privatization as an innovative way to address the budget shortfalls caused by inadequate funding of public investment in infrastructure. Critics contend that these deals sell long-term public assets to fill short-term budget needs, and further harm the public good by subordinating local transportation planning to the interests of private toll-road operators.
As of the end of 2008, 15 roads in the U.S. had been privatized, including the Northwest Parkway in Broomfield, CO. 79 other roads were being considered for privatization.