Virginia, Ohio Outline Transportation Privatization Plans; Wyoming Shifts to Pavement Preservation for Now

Virginia Gov. Bob McDonnell this week unveiled a pipeline of transportation projects that could be candidates for public-private partnerships (P3s). Meanwhile, Ohio will look to private contractors to take over maintenance on two of that state’s major Interstates. Also, Wyoming’s department of transportation moves forward with a plan to forego expensive construction projects for the time being in favor of pavement preservation work just as a legislative “super-committee” gears up to begin work on a plan to fund the state’s highway maintenance and construction going forward. Plus, there are items this week on efforts to overcome privacy concerns about mileage-based road fees as well as Oklahoma’s bridge repair plans.

Virginia’s P3 Pipeline

Virginia in recent years has been a leader among the states in pursuing transportation public-private partnerships and the project pipeline list released by the Governor’s Office Tuesday makes it clear state officials plan to continue going to that well.

The commonwealth has a 1995 law (the Public-Private Transportation Act or PPTA) authorizing such deals on the books and last year created an Office of Transportation Public-Private Partnerships to focus on identifying, developing and delivering P3 projects.

The project pipeline list includes both well-established transportation projects that are candidates for P3s as well as new transportation concepts under consideration. The eight established candidates include improvement projects along the I-95, I-64 and I-66 corridors and expansion of the Port of Virginia. The list of 14 conceptual projects includes truck parking facilities and electric car charging stations at rest areas, privatization of parking facilities, and advertising/sponsorship opportunities.

The Office of Transportation Public-Private Partnerships will be seeking public comment on the projects list from now until July 2.

In the “PPTA Project Pipeline” report, Virginia Secretary of Transportation Sean Connaughton writes: “While we consider these potential P3 projects, we must be cognizant that there are not sufficient state or federal revenues at the Commonwealth of Virginia’s disposal to construct these projects. There is a misconception that developing a transportation project under the PPTA allows access to a new source of revenue. Strictly speaking it does not. However, what the PPTA does do is allow the Commonwealth to make limited state funds go further by bringing private investment into the mix.”

Connaughton will likely discuss the full scope of this P3 project pipeline during his remarks later this month at the InfraAmericas U.S. P3 Infrastructure Forum in New York City. You can find out more about the forum in my recent blog post or by clicking here. CSG is a supporting organization for the event for the second year in a row.

A select group of state legislators will also get to see firsthand a couple of the major transportation projects now underway in the Commonwealth of Virginia (HOT lanes on the Capital Beltway and the Metrorail extension to Dulles Airport specifically) when they attend the invitation-only CSG Transportation Policy Academy in Washington, D.C. at the end of this month. I’ll have more to report on that in the weeks ahead.

Indiana Gov. Daniels: “We’re never going to get there the old-fashioned way alone.”

Another cheerleader for transportation public-private partnerships, Indiana Gov. Mitch Daniels, was touting their benefits during a visit of to Washington last week. In 2006, Indiana contracted with the private sector to have them operate the Indiana East-West Toll Road for 75 years in exchange for $3.8 billion, which the state used to create Major Moves, a plan to fund other infrastructure projects in the state.

The Evansville Courier & Press reported that at a roundtable discussion in D.C. hosted by Reason magazine, Daniels said he would have expected more states to follow suit in leasing roads for upfront payments “because it’s so obvious and so logical.” That it hasn’t happened to a significant degree is an indicator that “Folks just didn’t want to turn loose of the power,” he said.

Daniels said Indiana is now hoping to duplicate the success of the Toll Road deal by making use of public-private partnerships to finance an Ohio River bridge crossing and another bridge near Chicago.

“It’s hard to state how great the deal was (for Indiana),” Daniels said. “The investors are going to take a haircut eventually. Sorry about that, but it’s good for the state.”

Daniels believes the U.S. should look to Europe, where P3s are much more common.

“In the long term, we need to invest more money in infrastructure from public and private sources,” he said. “Sooner or later there has to be some other arrangement—try to open the spigot on private capital … We’re never going to get there the old-fashioned way alone.”

Ohio Cost-Cutting Plan Includes Road Maintenance Privatization

In addition to dangling the Ohio Turnpike to investors as part of efforts to cut costs and produce new revenues, state transportation officials are also looking into paying private contractors to plow snow, fill potholes and maintain I-270 in central Ohio and the stretch of I-71 between Columbus and Cincinnati, The Columbus Dispatch reported this week.

Ohio spends more than $5,200 annually to maintain each mile of each lane of state, federal and interstate highway within its borders. On I-270, the state spends $1.9 million and on the stretch of I-71, $6.4 million.

While the state already hires private companies to perform some tasks such as removing dead animals, painting lane markers, spreading road salt, laying asphalt or performing minor road repairs, privatization would mean one company would get a contract to do it all.

The Ohio Department of Transportation is also launching a program that will permit advertising and sponsorship opportunities at the state’s 101 rest areas, according to the AASHTO Journal Weekly Transportation Report.

The department’s Deputy Director of Innovative Delivery, James Riley, will also be among the speakers at the InfraAmericas forum later this month.

Expensive Projects Out, Pavement Preservation in for Wyoming

Wyoming Department of Transportation officials told lawmakers in Cheyenne this week that their cash-strapped agency has abandoned many costly projects in favor of preservation work that seeks to maintain road conditions, The Wyoming Tribune Eagle reported. It’s part of a philosophy first announced last year that was motivated by a significant budget shortfall. Agency officials say $135 million more is needed annually just to maintain the state’s transportation system in current shape.

State transportation officials also say the lack of a stable funding source makes it hard to plan for major improvements.

But help could be on the way eventually. An interim committee of the state legislature made up of both House and Senate members is expected to begin meeting soon to study potential sources of revenue to fund transportation, including sales and fuel taxes, a ton-mile tax and toll roads. The “super-committee” will also look at modifying the funding model for the department of transportation, The Casper Star-Tribune reported.

Overcoming Privacy Concerns About Mileage-Based Road Fees

USA Today had more this week on states that are working to test technology to track the mileage of drivers as part of a potential future taxing system (see also here). Minnesota and Oregon currently have pilot projects underway or soon will, while Washington and Nevada are preparing similar projects, the newspaper reported.

James Whitty of the Oregon Department of Transportation told the paper that when the state ran a previous VMT pilot program in 2006, the major objection of motorists was the use of in-vehicle boxes to track miles driven. “They didn’t like the government boxes. They didn’t like the GPS mandate,” Whitty said.

Now recruiting volunteers for a new pilot program set to begin this September, Oregon transportation officials say they are examining other ways of reporting mileage including use of technology similar to that used to locate charging stations for owners of electric vehicles. The state might also allow some drivers who don’t feel comfortable with the technology to pre-pay for a certain number of miles or buy an unlimited amount of miles with a flat annual tax.

Also this week in a piece for Streetsblog Capitol Hill, Liisa Ecola of the RAND Corporation offers up a list of potential strategies for dealing with privacy concerns associated with mileage-based user fees, including:

  • Using the devices people already have. The pilot project underway in Minnesota uses smartphones and Bluetooth devices attached to the diagnostics port on the vehicle to capture data about where and when participants are driving, Ecola notes.
  • Making participation voluntary. In Minnesota, drivers participating in the pilot program can choose each time they get behind the wheel whether they want to turn their smartphone on and make their data available in exchange for lower potential costs, or keep the smartphone off and pay more based on an odometer reading.
  • Providing the options of having an anonymous account and paying exclusively in cash.
  • Calling in the watchdogs. The ACLU was among the groups represented on an oversight panel for the Minnesota pilot program.
  • Designing safeguards into the mileage collection technology that can keep individual travel records private.

Ecola writes however that “None of these methods can absolutely secure political and public acceptance. They can mitigate potential risks and motivate those of us working in transportation to remain attentive to privacy concerns.”

She also notes that the realm of privacy is changing in the age of social networking sites and the like.

“We voluntarily relinquish privacy for convenience, and in many cases laws haven’t kept pace with breathtaking changes in technology. The approaches to driver privacy need to evolve in conjunction with technology and our new expectations.”

Other Transportation News of Note

Montana: The Missoula City Council voted this week to ask Missoula County commissioners to give voters the option of adding two cents to the price of a gallon of gas to help pay for local road and sidewalk projects, The Missoulian reported. Montana law allows county commissioners to place a gas tax of two cents a gallon at most on the ballot and share the proceeds between the city and county for transportation infrastructure. With the approved council resolution, city councilors formally requested commissioners put the matter on the ballot.

New Jersey: Legislation introduced this week would give the state’s Transportation Trust Fund Authority the go-ahead to borrow $1.25 billion to put towards the $1.6 billion the state will spend on its transportation program in 2013 (nearly 80 percent). That would be $261 million more in borrowing than Gov. Chris Christie called for in his initial proposal. An unexpected revenue shortfall is the reason for the revised plan, The (North Jersey) Record reported.

North Carolina: The state department of transportation has formed an advisory council to examine the potential economic impact of using tolling to add nearly 500 miles of new lanes to I-95. The council includes representatives of major industries who have voiced concerns over the state’s tolling plans, according to a department news release issued last week.

Oklahoma: Gov. Mary Fallin recently signed legislation that will increase funding for repairs to state roads and structurally deficient bridges. According to the Associated Press, the measure is expected to help the governor carry out her plan to repair or replace all 706 structurally deficient bridges on the state highway system by 2019 (see also here).