Published on January 16th, 20130
What New York Can Learn from Britain’s Rail Fiasco
Nicole Gelinas, a City Journal contributing editor at the Manhattan Institute, argues that while Public-private partnerships have real benefits, they’re no substitute for government competence.
When an American state or city wants to build or run a commuter-rail service or toll road, it usually does the job itself, with some help from Washington’s coffers. But in Albany, the state’s political leaders haven’t controlled their spending enough to make enough room in the annual budget for investing in roads, bridges, and transit. The state’s quasi-independent public agencies also lack the money to do this work. Over the next two decades, the state and local agencies responsible for New York’s transportation assets face $89 billion in capital shortfalls, the state comptroller reported last month. With the state itself facing a nearly $1 billion budget gap next year and a gap of $3.6 billion, or 5.5 percent of spending, the year after that, road and transit users can hardly expect the state to increase infrastructure spending.
That’s why some state politicians, including Governor Andrew Cuomo, are looking to public-private partnerships. More common in Europe than in the U.S., such partnerships represent a departure from how America traditionally builds and operates its physical assets. The arrangements require, for example, that private-sector firms take some long-term responsibility for an infrastructure project. A private company may contract to build, maintain, and operate a toll road for 30 years, shouldering the risk, say, that shoddy construction work generates high maintenance costs, or that lower traffic numbers result in lower revenues.
Source: City Journal. Read the entire article. (link)