The Road to Renewal: Private Investment in the U.S. Transportation Infrastructure

The Road to Renewal: Private Investment in the U.S. Transportation Infrastructure

by Richard R. Geddes

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Despite record levels of government spending, America's transportation system is plagued by traffic congestion, decaying infrastructure, and politicization of transportation funding-leading to calamities such as the 2007 collapse an interstate highway bridge over the Mississippi River and political fiascos like Alaska's infamous "Bridge to Nowhere." In The Road to Renewal, R. Richard Geddes surveys the current state of U.S. ground transportation and finds that, like the roads themselves, transportation policy is in desperate need of repair. A shift toward increased use of public-private partnerships (PPPs)-contractual agreements that allow private participation in the design, construction, operation, and delivery of transportation facilities-could significantly improve the quality of U.S. roadways.

Product Details

ISBN-13: 9780844743462
Publisher: American Enterprise Institute for Public Policy Research
Publication date: 02/16/2011
Edition description: New Edition
Pages: 230
Product dimensions: 6.20(w) x 9.00(h) x 0.80(d)
Age Range: 18 Years

About the Author

R. Richard Geddes is associate professor in the Department of Policy Analysis and Management at Cornell University and an adjunct scholar at the American Enterprise Institute. He recently served as a commissioner on the National Surface Transportation Policy and Revenue Study Commission.

Table of Contents

List of Illustrations vii

Acknowledgments viii

Preface ix

Introduction 1

1 Three Critical Transportation Policy Reforms 8

The Problem with Fuel Taxes 8

A Better Strategy: Fee for Road Use 15

Congestion Pricing: Paying According to Cost 19

Private Investment in Transportation Infrastructure 24

2 Basics of Public-Private Partnerships 26

PPP Terminology 26

Types of PPP Contracts 28

Transportation PPPs in the United States 33

3 Compared to What? Why Private Investor Participation is Needed 41

Governance under Bureaucratic Administration 42

Private Investment Improves Governance 43

The Governance Experience in Public Toll Authorities 47

4 Benefits of PPPs: Competition, Management, and Project Delivery 53

PPPs Create Competition in Facility Management 54

PPPs Accelerate Project Delivery 56

PPPs Improve Incentives to Contain Costs and Efficiently Utilize Road Capacity 60

PPPs Improve Incentives to Enhance Safety 62

PPPs Provide Incentives and Resources to Adopt Emerging Technologies 65

PPPs Improve Public Control over Assets 67

5 Benefits of PPPs: Investment, Risk Transfer, and the Rationalization of Investment 71

PPPs Introduce New Classes of Investors 71

Global Investment in U.S. Transportation Infrastructure 73

PPPs Offer Investors New Options 75

PPPs Transfer Risk from Taxpayers to Professional Risk Bearers 78

Private Participation Reveals the True Cost of Capital 81

PPPs Rationalize Transportation Investment 83

Public Policies to Encourage Infrastructure Investment 86

Conclusion 90

6 The Benefits of Brownfield Public-Private Partnerships 93

PPP Benefits Created by Brownfield Concessions 95

Brownfield Leases Unlock Latent Value for Facility Citizen-Owners 98

Intergenerational Equity and Brownfield PPPs 101

7 The Benefits of Private Investor Participation Demonstrated 103

Empirical Evidence on the Effects of Private Participation 103

Performance of Transportation Public-Private Partnerships Abroad 107

8 Public-Private Partnerships in the Public Interest 120

Managing the PPP Process 120

Addressing Potential Market Power 125

Additional Contracting Issues 130

Ex Post Opportunism 134

Summary and Conclusions 137

Notes 140

Index 173

About the Author 185

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