Not all the public-private partnerships in the U.S. were successful. The South Bay Expressway, a toll road project in San Diego that was once held up as a model for other P3s, fled for Chapter 11 bankruptcy in March after being open for business for less than three years. The Australian firm that owns the expressway, Macquarie Infrastructure Group, had offered assurances that 60,000 customers paying $4.50 to drive 10 miles would use the road daily but only 22,600 customers actually did. That left the project without enough revenue to sustain its debt obligations.16
A study done for the Texas Department of Transportation in 2008 found a majority of toll road projects overestimated traffic levels in the first five years by at least 20 to 30 percent.17
After this high profile failure, some feared California taxpayers would get stuck paying off the expressway's debts. An editorial in the Washington Times said it demonstrated the private concession toll road model was a "road to nowhere."18 But in a letter to the public, South Bay Expressway CEO Greg Hulsizer wrote the P3 mechanism actually worked in this case by allowing a long needed road to be built decades earlier than it otherwise would have been. Hulsizer also wrote that: "The financial risk on the project was transferred to the private sector. We and our lenders took the risk that things wouldn't work out as planned. They haven't. But the state isn't on the hook for that. It's up to us (the concession company and its investors) to work it out (to pay the debt)."19
P3 proponents also point out that other toll concession projects that have failed in Colorado, Texas and Virginia similarly were not taken over by the state. Instead, other private buyers assumed ownership and the roads remain in operation.20