Category Archives: Transportation

Indiana bond sale to complete P3 takeover financing

Source: Nora Colomer, Bond Buyer, August 21, 2017 (subscription required)
 
The Indiana Finance Authority will price $180 million of highway revenue refunding bonds Wednesday to complete the financing piece of its takeover of a troubled public private partnership highway project.  The bonds will take out $210.7 million of bond anticipation notes issued by the IFA last week to redeem $246 million of private activity bonds as part of settlement agreements that terminate its contractual relationship with I-69 Development Partners LLC and put direct control of the I-69 Section 5 project under the Indiana Department of Transportation. …

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Indiana Highway Gives ‘Black Eye’ to Private Investment in Infrastructure 
Source: Cameron McWhirter, Wall Street Journal, August 9, 2017

At a time when Washington is promoting private investment in roads, bridges and other infrastructure, a 21-mile stretch of highway in Indiana provides what critics say is a cautionary tale.  The project, a partnership between the state and private investors, was signed by Vice President Mike Pence in 2014 when he was the state’s governor. It is two years behind schedule and only 60% built. The state is in the process of taking it over and will have to issue debt to finish it. …

If Pence Shapes Trump’s Infrastructure Plan, Who Would Profit? Who Would Pay?
Source: Lydia O’Neal and David Sirota, International Business Times, August 9, 2017
 
President Donald Trump’s $1 trillion plan to rebuild America’s infrastructure may be unprecedented in its size and ambition — but it promotes a controversial model championed by Vice President Mike Pence in his home state of Indiana. The Hoosier flavor is hardly surprising: After his gubernatorial experience with road privatization, Pence has been a public face of the White House initiative, and executives from financial firms that helped privatize Indiana’s roads are now the Trump administration officials sculpting the details of the national plan.  As that federal proposal now moves forward, Indiana’s experience with infrastructure privatization has become a political Rorschach test. Pence and his allies are extolling Indiana’s record selling control of major roads to private firms as an ideal model, arguing that such public-private partnerships prompted corporations to invest money in Indiana infrastructure that taxpayers would otherwise have had to sponsor. …

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The Untapped Wealth of American Cities

Source: Bruce Katz and Jeremy Nowak, CityLab, August 6, 2017
 
Americans who travel abroad sometimes wonder why many of our airports are lacking in comparison to the best international airports. Or they want to know why other nations seem to do a better job with public transportation and the management of other public assets, from ports to parks. The answers we are tempted to give are that we do not invest as heavily in public infrastructure as many other nations and that a market-oriented American ethos with an entrepreneurial culture prefers private solutions (cars versus trains) to public ones. … But there’s another answer: Compared to many other nations, in the United States government has more direct control of public assets such as airports, convention centers, and transport, water and sewer systems (just to name a few). And the government does not, for the most part, manage them well, failing to leverage the market potential and value of the assets they own. Far from being broke, many cities and counties have enormous untapped wealth, which could be used to finance not only infrastructure but investments in children and other critical needs. …

There is a better way, teased out in detail and with great authority in The Public Wealth of Cities, a new book co-authored by Dag Detter and Stefan Folster, two Swedish experts in public finance. The pair have studied public asset management and are promoting a third alternative to political management or full privatization—public ownership that relies on professional, private-sector management.… The authors’ core argument is a disruptive idea in public policy that links management systems, public asset value, intelligent financing, and the proper role of politicians in a democracy. …

Infrastructure Borrowing Drops as U.S. States Await Trump Plan Details

Source: Reuters, August 6, 2017

President Donald Trump arrived in office having promised a bold $1 trillion infrastructure investment plan over 10 years for roads, bridges, airports and transit systems crumbling by the day across the United States. But nearly seven months later the administration has produced few details on the future of federal infrastructure funding, one reason why state and municipal governments have issued fewer bonds to improve roads, water systems and other projects so far in 2017. … Through July, new municipal deals to fund transportation, utilities and power projects totaled $50.7 billion, down 19.4 percent from the same period last year, according to an analysis of Thomson Reuters data. That decline outpaces a broader drop in the U.S. municipal bond market overall, with total issuance down 13.1 percent thus far in 2017 to $201.7 billion. New deals have lagged since November’s post-election selloff, when state and local governments quickly issued bonds fearing potential policy changes and rate increases by the Federal Reserve.

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Lacking White House plan, Senate focuses on infrastructure
Source: Melanie Zanona, The Hill, August 4, 2017

Amid growing frustrating that President Trump’s infrastructure package keeps getting pushed to the back burner, some members of Congress are taking matters into their own hands. A bipartisan coalition from the Senate Commerce, Science and Transportation Committee has been discussing pushing its own bill if the administration doesn’t release something by the fall. The Senate Environment and Public Works (EPW) Committee has also been gathering input with an eye on drafting an infrastructure plan this summer. And several Republicans met at the White House last week to try to get the ball rolling there on the issue.

White House: Infrastructure bill remains Trump priority
Melanie Zanona, The Hill, July 31, 2017

President Trump remains committed to working with Congress on a massive infrastructure bill, White House press secretary Sarah Huckabee Sanders said Monday. The reassurance from the White House comes as GOP leaders have signaled that the timeline for Trump’s $1 trillion infrastructure package — which has yet to be unveiled — will likely slip to next year. “The president’s been very outspoken on the need for a massive overhaul to the country’s infrastructure, and that certainly is still a priority, both legislative and in any capacity that he has the ability to carry that out,” Sanders told reporters at the daily briefing.

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LAZ Parking says three ‘dishonest’ employees stole parking lot money from MBTA

Source: Gintautas Dumcius, MassLive.Com, July 31, 2017

Three “dishonest” employees were responsible for the alleged theft of millions in MBTA parking lot cash, LAZ Parking’s president said in a statement Monday. The statement from the president and founder of LAZ Parking, Jeffrey Karp, came after Massachusetts Attorney General Maura Healey announced the firm agreed to pay $5.6 million to settle allegations over the theft. Employees at the firm, contracted to manage the MBTA’s parking lots, “skimmed millions of dollars in cash” from MBTA parking facilities in the Greater Boston Area, according to Healey’s office. … In announcing the settlement, Healey’s office said the firm did not use revenue controls, which were required in its contract with the MBTA. The public transit agency canceled the contract with LAZ in May 2017. …

Denver’s 34-year deal at DIA might be the city’s first big public-private partnership, but don’t expect it to be the last

Source: Jon Murray, Denver Post, August 13, 2017
 
Denver International Airport’s proposed $1.8 billion terminal deal is poised to launch the city into a different kind of contracting that hands over some control of a publicly owned space to private interests for decades.  Get ready: That complex, 34-year contract could be a harbinger of things to come. Mayor Michael Hancock and other city leaders see promise in public-private partnerships, which infuse both private money and management into public projects, as they prepare to build out the National Western Center with large new event venues, expand the convention center and plot big changes to the Denver Performing Arts Complex. …

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Denver wants to create an office for public-private partnerships, and City Council fears being cut out of the process
Source: Erica Meltzer, Denverite, July 28, 2017
 
Denver Mayor Michael Hancock wants to create an office within city government that will screen, vet and shepherd public-private partnerships related to major city projects, like the redevelopment of the National Western Center and the Denver Center for the Performing Arts — and other projects the city might not even have anticipated yet.  Under the proposal, City Council would get to set the broad parameters of deals, but contracts would be finalized at the administrative level.  The effort is causing major concerns among some City Council members about what authority they’ll give up if the idea goes forward. That concern is only exacerbated as they debate the contract for the Great Hall renovations at Denver International Airport, a public-private partnership that will see Ferrovial and its development partners get paid as much as $1.8 billion over a 34-year period for a $650 million to $770 million project. …

Warning: Trump Administration Wants To Privatize National Park Campsites

Source: James Jimenez, KRWG, July 8, 2017

… U.S. Interior Secretary Ryan Zinke recently announced that he wants to privatize our national park campsites. There are a lot of problems with this—primarily that prices will very likely be raised. Also, there is generally much less accountability when private companies run government programs. It becomes not only more difficult to determine just how our tax dollars are being spent, but there is also more room for subtle forms of discrimination to take place. By definition privatization means an economic focus on the use of public lands rather than a conservation and equity focus. Sec. Zinke’s desire to privatize public campgrounds is just one small symptom of a bigger illness that has this presidential administration in its grip—the illness of commodifying everything and anything that can, in any way, be made to profit someone. …

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As Trump moves to privatize America’s national parks, visitor costs may rise 
Source: Mary Catherine O’Connor, The Guardian, June 25, 2017 

America’s national parks need a staggering $11.5bn worth of overdue road and infrastructure repairs. But with the proposed National Park Service budget slashed by almost $400m, the Trump administration says it will turn to privatizing public park services to address those deferred maintenance costs. … But some public lands advocates are concerned that privatization would drive up costs for visitors and put the egalitarian nature of visiting a park out of reach for some. … If you’ve visited a national park, especially a busy one, such as Yosemite or Grand Canyon, there is a good chance you’ve patronized a private operator. Concessionaires operate a range of services including lodging, restaurants and transportation – ferries to Alcatraz and Liberty islands, for example. All told, the NPS has issued private concession contracts at 100 places within the park system. In recent years, disagreements over park contracts have led to costly lawsuits for the park service. … It would take a tremendous increase in such contracts to generate enough revenue to help the park system. … But despite his bullishness on infrastructure spending, Trump has proposed cutting the NPS budget by nearly $400m, which will force job cuts. …

Privatization Is Changing America’s Relationship With Its Physical Stuff

Source: Brian Alexander, The Atlantic, July 12, 2017
 
… As vague as Trump’s pronouncements have been on the matter, it is clear that the general thrust behind the promised building-and-repair push involves using federal dollars as up-front investment to entice private enterprises to provide most of the financing. While Democrats announced their opposition, the general idea of increased privatization of infrastructure has had a bipartisan cast. President Obama supported a plan to create an “infrastructure bank” that would help finance so-called public-private partnerships (known, for their alliteration, as P3s), but that idea fizzled under the glare of Republican opposition. He also floated the idea of selling off the Tennessee Valley Authority. …

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Selling Back To The Public What It Already Owned: ‘Public-Private Partnership’ Shark Bait
Source: Mercedes Schneider, Huffington Post, June 12, 2017
 
Today, I read two articles centered on this idea, both of which concerned Vice President Mike Pence – and one that concerned Pence’s role in the aftermath of Hurricane Katrina.  One article also included a sprinkling of US secretary of [privatized] education, Betsy DeVos.  A major goal of corporate education reform is to deliver public education to private entities (corporations, or even nonprofits, but don’t think that an entity termed “nonprofit” cannot be a handsome money dispenser for those running the nonprofit and doling out contracts). However, the extreme-right-Republican aim does not end with public education but with delivering the operation of the entire American infrastructure to private entities.  In the end, what this entails is having private corporations front money to state and local governments in order to lease back to the public what the public already owns.

How President Trump Might Carry The Torch Of Privatization
Source: Here & Now, WBUR, May 8, 2017

… Now President Trump is poised to continue privatization and private contracting in all kinds of industries, from education to incarceration. Here & Now’s Jeremy Hobson looks at the history and politics of privatization with Donald Cohen and Shahrzad Habibi of the group In The Public Interest. …

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Authorization To Fix The Crumbling BQE Faster Stalls In Albany

Source: Emma Whitford, Gothamist, July 12, 2017
 
Legislation that the Department of Transportation predicted could shave years and millions of dollars off of critical Brooklyn Queens Expressway repairs floundered in Albany this session, to the frustration of local politicians, policy groups, labor unions, pro-business groups, and residents who live alongside the decaying BQE triple cantilever in Brooklyn Heights. … There is a basic resistance in Albany, and upstate generally, to what is considered privatization of the state contracting process,” she added. “The main opposition comes from public service unions that are concerned about their jobs somehow disappearing or being diminished.” (“We wanted to ensure that men and women in the state workforce, who are perfectly trained and qualified to do the work, didn’t lose their jobs because of design build outsourcing,” stated Emily Cote, director of communications for the Civil Service Employees Association.) …

Oregon hired a company to paint the Ross Island Bridge without knowing its safety record. Then a worker fell.

Source: Gordon R. Friedman, The Oregonian, July 6, 2017
 
The Oregon Department of Transportation’s method for vetting contractors leaves the state open to hiring companies with troubling safety records, a review by The Oregonian/OregonLive has found. That’s exactly what happened when the department hired Abhe & Svoboda Inc. to repaint the Ross Island Bridge this year. Officials at the agency said when they chose the firm, they knew nothing of its safety history. The company’s track record includes accidents that killed and injured workers who were not wearing fall protection gear. Also on its record are repeated failures, as recently as 2011, to outfit bridge painters with adequate safety harnesses, safety records show. … Before awarding contracts, department officials don’t check publicly available online Occupational Safety & Health Administration records showing safety violations, workplace injuries and deaths from every state. Running such a check on Abhe & Svoboda takes minutes and shows violations from around the country spanning decades. …

Michigan university following Ohio State’s lead with parking privatization

Source: Tom Knox, Columbus Business First, June 29, 2017

A public university in Michigan is considering privatizing its parking system – and using Ohio State University as an example. Eastern Michigan University regents on Tuesday authorized President James Smith to pursue an arrangement to lease out its parking apparatus in exchange for upfront money. … It’s a significant decision because it is one of the first universities to follow Ohio State’s lead after the school signed a first-of-its-kind arrangement in 2012. Ohio State leased its parking operations to Australian pension fund QIC Infrastructure in a 50-year, $483 million deal, framing it as raising money for academics. …