Gov’t watchdog report balks at P3 highway plans

ARLINGTON, Va. — The American Trucking Associations is applauding the findings of the Government Accountability Office’s just-released report on highway public-private partnerships, which predicts such finance schemes can create costly highway monopolies, with higher costs and lack of public oversight.

The report, warning motorists that there is no “free money” for highway infrastructure, confirmed ATA’s position that public-private partnerships to fund infrastructure are more costly than traditional funding solutions.

The GAO says any benefits of P3s come with
trade-offs that overlook public interest.

ATA advocates higher fuel taxes for road users to pay for the massive amounts of infrastructure expansion and maintenance for America’s highway system over the next 25 years, rather than privatization or leasing.

The US DOT, meanwhile, has stated several times recently that it is interested in pursuing P3 agreements to fix the U.S.’s transportation woes.

“Schemes such as the privatization and tolling of existing highway infrastructure will result in Americans paying a significantly higher price to access our highway system while receiving less in the form of safe, efficient, and reliable roadways,” said ATA President and CEO Bill Graves. “It’s an important development to have the GAO acknowledge that such funding mechanisms are not in the best interest of the American taxpayers.”

In its report, the GAO said any benefits of public-private partnerships come with trade-offs that overlook public interest. For example, tolls on privately operated highways will likely be higher than on publicly operated toll roads, according to the report. The GAO also criticized the limited efforts to systematically determine the public interest and to generate a cost-benefit analysis for each project.

“There is also the risk of tolls being set that exceed the costs of the facility, including a reasonable rate of return, should a private concessionaire gain market power because of the lack of viable travel alternatives. Highway public-private partnerships are also potentially more costly to the public than traditional procurement methods and the public sector gives up a measure of control, such as the ability to influence toll rates. Finally, as with any highway project, there are multiple stakeholders and trade-offs in protecting the public interest,” the report states.