Highway Modernization can be Accomplished without Privatization

The decision to establish a private toll road should be distinguished from other highway modernization efforts that may be part of a private road proposal. Modernization can be accomplished under either public or private auspices. A particular public toll authority may, for instance, be slow to adopt electronic tolling, while a potential private operator may promise to install the new technology promptly. In this case, elected officials have the power to instruct the toll authority to modernize, even if they have to pass new legislation or appoint new toll authority managers to speed the process. Alternately, the public could hire the private operator just to install the new system. The same is true of proposals for toll lanes that create discounts for carpoolers or for driving during non-peak hours. These approaches can be done with or without a private intermediary. The key distinction is that a privatized modernization program does not include a transfer of control over the roadway, with the associated long-term loss of public value.

Modernization should similarly be distinguished from privatization in situations where the state seeks to build a new toll road or expand an existing one. There are potential gains and risks to outsourcing construction project design and oversight to a private firm. In some cases a private builder in a "design-build" project might better manage the risk of cost overruns. But, as problems with Boston's Central Artery "Big Dig" project managed by Bechtel/Parsons Brinckerhoff illustrate, private outsourcing can lead to its own problems with cost, safety, and quality.86

The point is that highway modernization projects should be distinguished from financing and long-term ownership. Giving greater discretion and incentives to a private builder or creating high-tech tolling options need not entail private owner-ship or private financing of the completed road.