Pennsylvania conducted extensive legal, financial and comparability analyses while considering leasing the turnpike to a private operator. The state's financial projections were based in part on studies conducted by the Turnpike Commission, including a May 2008 financial report required by Act 44 that was written by Public Financial Management, an independent advisory firm. Each study relied on independent traffic estimates, lists of operating and capital projects, and revenue and toll estimates supplied by the Commission. In addition, myriad other reports and analyses were produced on the lease proposal, including some commissioned by the legislature and others published by research and advocacy groups. (The reports, which came to a variety of conclusions, may have served to add questions, rather than answer them.58 For example, "For Whom the Road Tolls," a report commissioned by the Democratic Caucus of the House Transportation Committee, spends five pages critiquing the assumptions of a competing report by Morgan Stanley, which advised the administration in the deal.59)
GROUND RULES |
The Regional Plan Association, an independent regional planning organization dedicated to economic competitiveness issues in the New York-New Jersey-Connecticut region, suggests sensible ground rules to help protect the public interest throughout a deal-making process. The first rule deals with full disclosure during the deal-making stage. Given that concessions fall outside the normal business process, the group suggests that state governments should aim for a higher degree of transparency and disclosure to encourage public support. It recommends that governments should: • Disclose publicly what funding will be lost that might need to be replaced with other government funding if revenue from the asset is no longer collected by a public agency. • Disclose the full text of any contract used to establish the public-private partnership. • Disclose, early on, the future allowable toll schedule, including starting toll rates and the degree to which variable tolls may be used in the future to help manage congestion and performance. • Disclose any non-compete agreements or other contract language potentially impacting the expansion of other transportation infrastructure. • Disclose the current performance, operation, maintenance, environmental and labor standards on the asset in question. • Disclose the performance, operation, maintenance, environmental and labor standards to which the private sector will be held and how the contracts will ensure high performance operation and management of the affected corridors. • Hold legislative hearings and town hall meetings on the subject, and allow sufficient time for meaningful public input and legislative review. • Disclose transactions costs, including fees to investment banks, financial advisors, lawyers and other professionals retained by the public sector to analyze and craft the partnership. Source: Regional Plan Association, Proceed With Caution: Ground Rules for a Public Private Partnership in New Jersey, January 8, 2007, 13-14, http://www.rpa.org/pdf/rpappp01082007.pdf (accessed February 18, 2009). |