1 José A. Gómez-Ibáñez, Dominique Lorrain, and Meg Osius, The Future of Infrastructure Privatization, Working Paper, Taubman Center for State and Local Government, Kennedy School of Government, Harvard University, June 2004.
2 For more comprehensive discussion of the preconditions for successful privatization, see David Lowery, "Consumer Sovereignty and Quasi-Market Failure" Journal of Public Administration Research and Theory, 1998, 137-172; John D. Donahue, The Privatization Decision: Public Ends, Private Means (NY: Basic Books, 1989); Oliver Williamson, "Public and Private Bureaucracies: A Transaction Cost Economics Perspective," Journal of Law, Economics and Organization 15 (1):306-342, 1999; Mildred E. Warner and Amir Hefetz, "Pragmatism over Politics: Alternative Service Delivery in Local Government, 1992-2002," chapter in The Municipal Year Book 2004, Inter-national City County Management Association, 2004.
3 John D. Donahue, The Privatization Decision: Public Ends, Private Means (NY: Basic Books), 1989.
4 Donahue's broad survey of public versus private efficiency across a wide range of services bears this out. He observes, "Without a credible prospect of replacement, it is hard to harness private capabilities to public purpose." See John D. Donahue, The Privatization Decision: Public Ends, Private Means (NY: Basic Books) 1989.
5 Christopher Conkey, "Highway Upgrade Goes Private," Wall Street Journal, 8 March 2009.
6 "US Tax The 63-20 Not-For-Profit Contrivance," Toll Roads News, 8 December 1997.
7 Federal Highway Administration, State PPP Legislation, downloaded from www.fhwa.dot.gov/PPP/tools_state_ legis_statues.htm, 30 January 2009.
8 Deloitte Research, Closing America's Infrastructure Gap? The Role of Public Private Partnerships, 2007.
9 The states with recent legislation to facilitate privatization are: Alabama, Arkansas, Arizona, California, Colorado, Delaware, Florida, Georgia, Indiana, Louisiana, Maryland, Minnesota, Mississippi, Missouri, Nevada, North Carolina, Oregon, Puerto Rico, South Carolina, Tennessee, Texas, Utah, Virginia, Washington, and West Virginia.
10 One reason privatization of infra-structure has been modest in the United States is simply because the U.S. never had much public infrastructure to speak of in the industries where privatization took place: no state telecommunications company, energy company, civilian shipyards, airline, or electricity generation and transmission. See note 3, p. 6. Municipalities in the United States have experimented with privatized service delivery. While these moves make head-lines, the overall trend is more ambiguous because challenges with monitoring and a desire to better steer the process often prompt municipalities to subsequently contract these services back in. For a discussion, see M.E. Warner with Mike Ballard and Amir Hefetz, "Contracting Back In - When Privatization Fails," The Municipal Year Book 2003, International City County Management Association, 2003, 30-36.
11 Based on the World Bank's Public Private Infrastructure database (PPI) which counts only privatizations that grant operational control to a private firm. See note 1. Current levels of privatization in developing countries have revived behind telecommunications deals, but the total is still 30 percent below its peak in real terms. See "Revival of Private Participation in Developing Country Infrastructure," Gridlines Note # 16, January 2007.
12 See note 1.
13 José Luis Guasch, "Concessions of Infrastructure Services: Incidence and Determination of Renegotiations-An Empirical Evaluation and Guidelines for Optimal Concession Design", manuscript, World Bank, May 2002, cited in José A. Gómez-Ibáñez, Dominique Lorrain, and Meg Osius, The Future of Infrastructure Privatization, working pa-per, Taubman Center for State and Local Government, Kennedy School of Government, Harvard University, June 2004.
14 Gisele F. Silva, Toll Roads, World Bank, Public Policy for the Private Sector, Note 224, December 2000.
15 American Society of Civil Engineers, 2009 Report Card for America's Infrastructure, downloaded from www. asce.org/reportcard/2009/grades.cfm, 25 February 2009.
16 See, for example, David Westerling and Steve Poftak, Our Legacy of Neglect: The Longfellow Bridge and the Cost of Deferred Maintenance, Pioneer Institute White Paper, No. 40, July 2007.
17 David Westerling and Steve Poftak, "A Legacy of Neglect," The Boston Globe, 31 July 2007.
18 National Conference of State Legislatures, Update on State Budget Gaps: Still Bleak (press release), 3 February 2009.
19 National Conference of State Legislatures, New National Survey Reveals Escalating Budget Crisis for States (Press Release), 4 December 2008.
20 Robert Puentes and Ryan Prince, "Fueling Transportation Finance: A Primer on the Gas Tax," Brookings Institute, March 2003.
21 U.S. Department of Labor, Bureau of Labor Statistics, Producer Price Index Industry Data: Highway and Street Construction, extracted from www.bls.gov, 25 February 2009.
22 Jim McDonnell, Survey on Construction Cost Increases and Competition, Review of the Highway Construction Cost Conference, American Association of State Highway and Transportation Officials, 11 September 2007.
23 American Association of State Highway and Transportation Officials, Transportation: Invest in Our Future; 16 Revenue Sources to Fund Transportation Needs, April 2007.
24 For instance, Transportation Finance in Massachusetts: An Unsustainable System, Findings of the Massachusetts Transportation Finance Commission, 28 March 2007; Regional Plan Association, Putting the Trust Back into the New Jersey Trust Fund, July 2005; Matt Sundeen and James B. Reed, Surface Transportation Funding: Options for States, National Council of State Legislators, December 2006.
25 Governments may become less reluctant to hike tolls as a result of electronic tolling technologies, such as EZ Pass. Tolls around the country are increasingly paid through electronic transponders that withdraw funds electronically from drivers' bank accounts. Electronic tolling makes toll collection and processing more efficient and convenient, while allowing cars to pay tolls without coming to a complete stop. Research suggests that electronic tolling also makes toll hikes more politically palatable. MIT economist Amy Finkelstein examined data at 123 tolling facilities around the U.S. and found that electronic tolling (such as EZ Pass) results in governments raising tolls more quickly. Automated tolling results on average in tolls that rise at a rate 75 percent faster than manual tolling would over time. One strong piece of evidence that drivers don't notice electronic tolls as much is that an increase in electronic toll rates reduces driving only 11 percent as much as the same increase reduces driving for manually collected tolls. See Amy Finkelstein, E-ZTax: Tax Salience and Tax Rates, NBER Working Paper No. 12924, February 2007. The author tests a number of alternative hypotheses for why else this might be the case.
26 Moody's Investor Service, "Monetizing" and Other Creative Solutions for Financing U.S. Transportation Capacity: Multiple Roads to the Same Destination, Special Comment, June 2007, 2.
27 Fitch Ratings, Special Report: U.S. Toll Road Privatizations: Seeking the Right Balance, 22 March 2006.
28 For a statistical analysis showing that public-private contractor campaign contributions are timed with contracting decisions, see Roland Zullo, "Public-Private Contracting and Political Reciprocity," Political Research Quarterly 2006; vol. 59.
29 Laura Bloomer, "Politicians Get Burned Paving Texas Backwards, From the Top Down," Texans for Public Justice, 7 January 2009.
30 Information on campaign contributions comes from: The National Institute on Money in State Politics, Follow the Money, downloaded from www.followthemoney.org; Center for Responsive Politics, OpenSecrets, downloaded from www.opensecrets.org.
31 Senate Chairman Jeff Bingaman, Subcommittee on Energy, Natural Re-sources & Infrastructure, Opening Statement at Hearings on Tax and Financing Aspects of Highway Public-Private Partner-ships, 24 July 2008.
32 National Cooperative Highway Research Program, Public Sector Decision Making for Public-Private Partnerships, NCHRP Synthesis 391, Transportation Research Board, 2009.
33 U.S. Department of Transportation, The Transportation Infrastructure Finance and Innovation Act downloaded from tifia. fhwa.dot.gov, 25 February 2009. The TIFIA statute was enacted as part of the Transportation Equity Act for the 21st Century (TEA 21, Public Law 105-178, §§1501-04), as amended by the TEA 21 Restoration Act (Title IX of Public Law 105-206) and the Safe, Accountable, Flexible, Effective Transportation Equity Act: A Legacy for Users (SAFETEA-LU, Public Law 109-59). The substance of the legislation is codified within sections 601 through 609 of title 23 of the United States Code (23 U.S.C. §§601-609), with supporting regulations appearing in part 80 of title 49 of the Code of Federal Regulations (49 CFR 80).
34 U.S. Department of Transportation, Transportation Infrastructure Finance, TIFIA Projects, updated 13 February 2009.
35 See note 33.
36 JayEtta Z. Hecker, U.S. Government Accountability Office, Highway Public Private Partnerships: Securing Potential Benefits and Protecting the Public Interest Could Result from More Rigorous Up-Front Analysis, Testimony before the Subcommittee on Energy, Natural Resources, and Infrastructure, Committee on Finance, U.S. Senate, 24 July 2008.
37 Dennis Enright, Texas Hold 'em: Will the State Go All In to Public-Private Partnerships ("CDAs") and Lose $2 Billion?, NW Financial, April 2007.
38 "TxDOT Severs Ties With Cintra Over SH121 Project: Agency Feared Loss of Federal Aid," The Bond Buyer, 30 August 2007.
39 Dean Foust, "So You Think Munis Are Safe?" Business Week, 5 August 2002. Also, Chuck Plunkett, "Roads to Riches Paved with Bad Projections," Denver Post, 28 May 2006.
40 James L. Oberstar and John L. Mica, US House of Representatives Committee on Transportation and Infrastructure, Letter to Secretary of Transportation Mary Peters, 4 November 2008.
41 PricewaterhouseCoopers, Infrastructure Finance - Surviving the Credit Crunch, December 2008.
42 Cezary Podkul, "Infrastructure Funds Raise $24.7 Billion in 2008," Infra-structure Investor, 13 January 2009.
43 Ibid.
44 Peter Galuszka, "Could Financing Infrastructure Be the Next Big Thing?" BNET Financial Services, 26 November 2008.
45 See also the position paper, Public Interest Concerns of Public-Private Partnerships by the House Transportation and Infrastructure Committee Chair, James Oberstar, available at transportation.house.gov/media/file/ press/ppp%20guidelines%20veritas.pdf
46 "Road Fight is Hardy Perennial," Rocky Mountain News, 12 December 2005. See also, Daniel Sorid, "Colorado Highway 'Slowdown' Sparks Debate on Toll Roads," Reuters, 11 August 2005.
47 Indiana Finance Authority and ITR Concession Company LLC, Indiana Toll Road Concession and Lease Agreement, 12 April 2006.
48 "Cape May County NJ Takes Over Private Beesley's Point Bridge," Toll Roads News, 30 December 2008.
49 United States Government Accountability Office, Report to Congressional Requesters, Highways and Transit: Private Sector Sponsorship of and Investment in Major Projects Has Been Limited, March 2004.
50 Ibid.
51 Ben Wear, "Kickoff Close for First (and only?) Private Tollway," The Statesman, 3 January 2009.
52 This simplified characterization does not include the relatively small ways that increases in traffic also increase costs.
53 Peter F. Swan and Michael H. Belzer, Empirical Evidence of Toll Road Traffic Diversion and Implications for Highway Infrastructure Privatization, 1 November 2007.
54 Dennis J. Enright, Testimony of Dennis J. Enright Before United States Senate Subcommittee on Energy, Natural Resources and Infrastructure, 24 July 2008.
55 See note 53.
56 "Camino Colombia Toll Road Sold at Auction," FleetOwner, 8 January 2004.
57 "Toll Road Study Hires Traffic Forecaster with Fractured Crystal Ball," The Muckraker, 3 February 2006.
58 Chuck Plunkett, "No 2-Way Street," The Denver Post, 25 October 2006.
59 The Chicago Skyway deal is not public record, so we cannot say for sure what provisions it contains. Speculation here is based on the fact that, under public criticism, the government has not divulged any public interest provisions.
60 U.S. Government Accountability Office, Federal-Aid Highways: Increased Reliance on Contractors Can Pose Oversight Challenges for Federal and State Officials, Report to the Chairman, Committee on Transportation and Infrastructure, House of Representatives, January 2008.
61 The 2005 Census lists a Chicago population of 2.8 million people.
62 Macquarie Investment Group, Indiana Toll Road, PowerPoint presentation, slide 5.
63 Roger Skurski, Professor of Economics, University of Notre Dame, report prepared for trial testimony May 15, 2006 in Bonney, et al. v. Indiana Finance Authority, et al, St. Joseph County, Indiana Superior Court.
64 Gary Gray, Patrick Cusatis and John Foote, For Whom the Road Tolls: Corporate Asset or Public Good: An Analysis of Financial and Strategic Alternatives for The Pennsylvania Turnpike, a study was commissioned by the Democratic Caucus of the Pennsylvania House of Representatives, February 2008. Available at www. paturnpike.com/I80/pdf/For_Whom_ the_Road_Tolls_Final_2-23-081_FI-NAL.pdf
65 See note 37.
66 Technical Associates and Bryan, Truesdale, Adkins and Williams, Report on An Inquiry into the Financial Transactions Between Toll Road Investors Partnership II, LLC and Macquarie Group Limited Affiliated Entities, prepared for the Office of the Attorney General of Virginia, July 2008.
67 U.S. Government Accountability Office, Highway Public Private Partnerships: More Rigorous Up-Front Analysis Could Better Secure Potential Benefits and Protect the Public Interest, Report to Congressional Requesters, February 2008.
68 Ibid.
69 Macquarie Infrastructure Group, Management Information Report for the Six Months Ended 31 December 2008, undated.
70 Scott Rochfort, "MIG Taps Reserves to Cover Debt on Toll Road," Brisbane Times, 19 February 2009.
71 Bill Ruthhart, "Slump Takes Bite Out of Road Fund," IndyStar, 11 December 2008.
72 Dennis J. Enright, The Public Versus Private Toll Road Choice in the United States, NW Financial Group, LLC, June 2007, 8.
73 Paul A. Grout, "Public and Private Sector Discount Rates in Public-Private Partnerships," The Economic Journal, Vol. 113, Mar. 2003, pp. C62-C68. Available at www.bristol.ac.uk/cmpo/publications/ papers/2003/wp59.pdf
74 See note 41.
75 Deloitte Research, Closing America's Infrastructure Gap? The Role of Public Private Partnerships, 2007.
76 See note 6.
77 Leslie Williams, "FDOT Postpones Deadline to Bid on Alligator Lease," Naples Daily News, 24 December 2008.
78 Brian Krebs, "MoDOT to Begin Safe and Sound Bridge Campaign," The Missourian, 4 January 2009.
79 See note 77.
80 See note 72. As home buyers know well, a percentage point or two can make a huge difference in a long-term mortgage.
81 See note 64.
82 Peter Humphreys is a partner at the law firm of McDermott, Will & Emery, where he heads the securitization practice. McDermott, Will & Emery is the 13th largest law firm in the country.
83 National Association of State Highway and Transportation Unions, Highway Robbery II: The Many Problems With Outsourcing Design, Engineering, Inspection & Supervision of Federally-Funded Transportation Projects: Increased Costs, Reduced Quality & Safety, May 2007.
84 See note 62, Slide 22.
85 See note 60.
86 See note 83.
87 See note 72.
88 Sasha Page, Helping the Public Sector Analyze the Valuation of Concessions from Multiple Perspectives, presented at the 87th Annual Meeting of the Transportation Research Board, Washington, D.C., 13-17 January 2008.
89 Daniel Schulman and James Ridgway, "The Highwaymen," Mother Jones, January/February 2007.
90 Malcolm Kerley and Thomas Pelnick, "Virginia's Public Private Partnership Act Six Completed Projects Later," HNTB Transportation Point, Fall 2008, available at www.hntb.com/ documents/pdf/TransPoint_050908_ FINAL.pdf
91 James L. Oberstar and Peter DeFazio, US House of Representatives Committee on Transportation and Infrastructure, Letter to Secretary of Transportation Mary Peters, 4 November 2008.
92 Bethany McLean, "Would You Buy a Bridge from This Man?" Fortune Magazine, 2 October 2007.
93 Data from Yahoo Finance, downloaded from fnance.yahoo.com, 26 February 2009.
94 Ibid.
95 See note 1.
96 David Stambrook., Final Report: Successful Examples of Public-Private Partnerships and Private Sector Involvement in Transport Infrastructure Development, Virtuosity Consulting for the OECD/ ECMT Transport Research Centre, 28 May 2005. Available at www.internation-altransportforum.org/jtrc/infrastruc-ture/Investment/PPPsuccessStories.pdf
97 John P. Jeffers, et al., Audit Steward-ship and Oversight of Large and Innovatively Funded Projects in Europe, FHWA-PL-07-001, Federal Highway Administration, Washington, D.C., 2006, available at international.fhwa.dot.gov/pubs/pl07001/
98 James L. Oberstar and Peter A. DeFazio, Public Interest Concerns of Public-Private Partnerships, Position Paper by the Chairmen of the House Committee on Transportation and Infrastructure and the Subcommittee on Highways and Transit, 4 June 2007, Transportation. house.gov/Media/File/press/ppp%20guid elines%20veritas.pdf, 7.
99 Smart Growth America, Survey Shows Americans Prefer to Spend More on Mass Transit and Highway Maintenance, Less on New Roads, 25 October 2007.
100 HNTB, Mapping the Road to Stimulus Success, Survey Fact Sheet, 2009, at www.hntb.com/assets/hntbcom/ documents/SurveyFactSheet.pdf
101 Katie Worth, "Road Privatization Finds Favor," The Examiner, 11 April 2008.
102 Quinnipiac Poll of 1,187 Pennsylvania voters; conducted between March 19th and March 25th, 2007; overall mar-gin of error +/-2.8%; and Quinnipiac Poll of 1,580 Pennsylvania voters; conducted 100 between July 30th and August 3rd, 2008 overall margin of error +/-2.5%.
103 Ellen Dannin, "To Market, To Market: Privatizing and Subcontracting Public Work," Maryland Law Review, 60:249, 2001.
104 U.S. Government Accountability Office, Highway Public Private Partnerships: More Rigorous Up-Front Analysis Could Better Secure Potential Benefits and Protect the Public Interest, Report to Congressional Requesters, February 2008.
105 Ibid.
106 See note 89.
107 See note 67.
108 Ibid.
109 See note 36.
110 See note 60.
111 Ariel Hart, "New DOT Chief May
Scrap All Toll Road Projects," Atlanta Journal-Constitution, January 10, 2008.
112 See note 60.
113 Ibid. See also note 103.
114 See note 98.
115 See note 89.
116 See note 36.
117 See note 98.
118 Ibid.
119 Ibid.
120 See note 36.
121 See note 67.
122 Ibid.
123 Ibid.
124 See note 60.
125 See note 98.
126 See note 36.