Late last month, House Democrats unveiled a five-year, $760-billion infrastructure package meant to repair and expand the country’s critical operating systems. The proposal is the first stab at a comprehensive agreement since President Trump’s ten-year, $1.5 trillion plan sank last year amid political rancor.
Democrats deserve credit for trying to tackle the United States’ mounting infrastructure needs, which Washington has hobbled along with patchwork fixes for more than seven decades. And there’s reason to believe this may be one area where lawmakers can find consensus; leaders on both sides of the aisle have acknowledged the urgent demand to come up with a serious bill. But they will have to address the elephant room – how to pay for the lofty plan.
House Speaker Nancy Pelosi admitted the proposal is a “major expense,” but the authors have largely sidestepped the question of funding. That could be a sticking point, as it was for the White House’s plan last year. Democrats would be wise to take a cue from the President and pull in the private sector.
Strong public-private partnerships will help mobilize projects, mitigate taxpayer liabilities and prioritize the most pragmatic and pressing needs. In Europe and around the world, progressive contracting has produced more reliable services, better consumer experiences and helped deploy modern assets and technologies. It would have similar results here in the states and provide the impetus to get a deal off the ground.
Government is not an efficient steward of infrastructure assets. For decades, public investment has struggled to keep pace with depreciation, much less growing needs. In 1998, the American Society of Civil Engineers gave the United States’ infrastructure a “D” grade. Nearly 20 years later, the score had climbed to only a D+. Yet, about 40 percent of the country’s infrastructure assets are held by state and local governments.
As U.S. Rep. Peter DeFazio (D-OR-4), a sponsor of the Democrat’s proposal, said: “We have been living off the legacy of Dwight David Eisenhower, with small tweaks, for 75 years. It’s falling apart.”
Public-private partnerships offer a paradigm shift. Unlike government, private builders and operators have a financial interest in delivering high-quality services. That incentive drives modernization and new technologies, which make roads, bridges, airports, railroads and telecom systems safer and more reliable, and the experience for consumers more enjoyable. It also shifts financial risks off taxpayers and onto private enterprise, a critical point worth emphasizing.
Boston’s MBTA commuter rail system offers a good example of how public-private partnerships can work. In 2014, the transit agency struck a revenue sharing agreement with Keolis, a public transit operator with operations in 16 countries. Keolis, already running the service, now is enticed to grow ridership and increase revenue for the transit agency. Last summer, the company and agency reported that fare revenue grew by $4.7 million through the first half of the year. Between 2015 and 2018, fare revenue increased 25 percent.
To stimulate this revenue and ridership growth over the past three years, Keolis has introduced on MBTA Commuter rail market-driven services, like a comprehensive marketing program encouraging ridership, onboard credit card processing and other modern conveniences. These both enhance the consumer experience and improve reliability, making the service more attractive compared to congested roadways The success in part has enabled MBTA officials to purchase more coaches and run more trains to support this growing public transit option in the greater Boston area.
The question for lawmakers should not be whether to partner with private contractors, but how to delegate more to them. Best practices from the private sector can help to reduce procurement costs, prudently manage assets like trains and transit infrastructure, and bring down operating costs, while providing better services – all areas where government has historically done poorly.
Lawmakers are right to prioritize our country’s infrastructure. The United States needs as much as $2 trillion of investment over the next 10 years to modernize and bring our infrastructure into good repair. But Washington shouldn’t go at it alone. Working with the private sector will improve efficiencies, produce better services, protect our communities, and bolster our economy – not to mention, help answer the looming question of how to pay for a comprehensive infrastructure agreement.
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Craig Stevens, a former senior advisor to U.S. Energy Secretary Sam Bodman, is the spokesman for Grow America’s Infrastructure Now (GAIN).
