Now’s the time for broad PPP expansion in California
The state has no money and is deep in debt–so to fix our broken infrastructure and build much-needed new transport options and facilities, we need to attract more private capital. This means more public-private partnerships.
Regardless of the results of May 19’s special election in California, the state will face a jarring financial future that should force a change in the way we plan and implement spending, and that includes infrastructure. The fact is that there will be no new public money for large-scale infrastructure for many years to come, so we had better start looking for alternatives now. We must act quickly because, let’s face it, the quality of our existing infrastructure – because of inadequate and sometimes wasteful funding – is just not good.
We really can’t delay implementing repairs to dangerous infrastructure problems like corroding bridges and deteriorating water treatment facilities. First, there’s the public safety issue – Californians deserve safe and secure infrastructure; second, there’s the competitive issue – how can we attract and retain businesses if we can’t provide adequate roads, rail and ports to move goods, energy to power manufacturing or research facilities, housing for workers, etc?
Our Governor knows this, and now so do many of our legislators. Earlier in the year, they passed into law SBX2 4, a bill that gives the state, cities and counties authority to adopt alternative infrastructure delivery methods such as public-private partnerships and design- build for certain transportation projects. The bipartisan effort is a great first step toward creating a multidisciplinary approach to California’s infrastructure challenges but it is not the sole solution. Nor will it address all the state’s needs since the PPP legislation expires in 2016 and the number of design-build projects is limited.
California leaders should rapidly expand the use of public-private partnerships (PPP) in the state in order to attract vital private investment capital for future infrastructure projects. Such PPP efforts have been successful in other states and around the globe, but so far California has been way behind the curve.
Private engineers have been steadfast advocates of using private capital and private expertise to make new infrastructure a reality for the benefit of the state and its industries. PPPs and design-build are possible today in California partly because of ACEC California’s overwhelming success in multiple court battles with state employee unions seeking to quash PPPs. Examples of projects now moving forward because of court victories include expansion of the 405 freeway in Southern California, the recent voter-approved high-speed rail project and expansions of subway systems in the Bay Area and Los Angeles. If we want to see more of these projects in the future, we need to bring private sector capital into play a much bigger role in building it.