Public-Private Partnerships can fill the funding gap. Given the tremendous capital shortfall in addressing the future development and maintenance of our transportation infrastructure, the State of Illinois must actively pursue innovative funding solutions. One such innovative approach, common in Europe, Canada, South America, Asia, and Australia is to create Public-Private Partnerships. Partnerships can take many forms. Sometimes, they involve attracting private sector capital, raised in the debt and equity marketplace, to replace or fill the gap left by public funding shortfalls. Partnerships can also take the form of long-term operating and maintenance contracts that transfer risks and costs to the private sector. Many types of infrastructure assets have been funded utilizing the Partnership concept, both new projects and upgrades or enhancements to existing infrastructure.
Mayor Richard M. Daley and the Chicago City Council implemented the first Partnership of its kind in the United States by leasing the Chicago Skyway to a private company for 99 years. This transaction provided $1.83 billion for the City of Chicago, and has spurred the consideration of similar proposals in Indiana, Delaware, and many other states. But Illinois remains hindered by its failure to pass legislation enabling Public-Private Partnerships, even though other states are rapidly adopting such legislation.
Aside from the successful Chicago Skyway agreement, Public-Private Partnerships have successfully financed numerous infrastructure improvements around the world. In Italy and Australia, the majority of toll roads are owned by the private sector.1 The public, government and private sectors support Partnerships in those countries because they serve everyone's interests. By combining resources and incentives and sharing risks between the public and private sectors, the public's needs can be served while a large portion of the costs are absorbed by the private market.
Footnotes
1 The Heritage Foundation, 2005. Retrieved February, 2005, from www.heritage.org/Research/SmartGrowth/tst0607 04a.cfm