GAO Report Backs ATA Views on Public-Private Partnerships

Business Wire, Feb 12, 2008

Report Warns of Higher Costs, Higher Tolls, Monopolies, Lack of Public Control

ARLINGTON, Va. -- The American Trucking Associations today welcomed the Government Accountability Office's just-released report on highway public-private partnerships, which predicts those finance schemes can create costly highway monopolies. The report, warning motorists that there is no "free money" for highway infrastructure, confirmed ATA's position that utilizing public-private partnerships to fund infrastructure ultimately can be more costly to the motoring public than traditional funding solutions and may not sufficiently consider the public good.

"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 and are costly to the public sector. 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 no 'free' money in public-private partnerships," the report said. "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 American Trucking Associations opposes the lease or sale of existing toll roads, bridges or tunnels to private entities and has called on government to abandon these financing techniques. The trucking industry supports a toll-free national highway system where funds to finance highway improvement primarily come from fuel taxes. ATA believes privatization permits operators to increase tolls to prohibitive levels. Under such lease agreements, the public loses a degree of control over the road, and there are no guarantees that service and safety levels will be maintained.

A full copy of the report titled "Highway Public-Private Partnerships: More Rigorous Up-Front Analysis Could Better Secure Potential Benefits and Protect the Public Interest" can be accessed at: http://www.gao.gov/new.items/d0844.pdf.

The American Trucking Associations is the largest national trade association for the trucking industry. Through a federation of other trucking groups, industry-related conferences, and its 50 affiliated state trucking associations, ATA represents more than 37,000 members covering every type of motor carrier in the United States.