Substantive description of the public/private partnership (PPP) scene, where local governments turn to private sector firms and international megacorporations for essential infrastructure projects: bridges, roads, ports, airports, utilities, etc. Missing is any long-term financial analysis of existing PPP arrangements, and evaluations of the effectiveness and cost/benefit results for the comunities served. Perhaps a follow-up article will do this?
“You’re talking about taking public assets, paid for with public dollars, and selling them off,” says Gina Downs, director of the Citizen’s Transportation Coalition. The group opposes the plan to lease the stretch of Interstate 75 known as Alligator Alley. “If governments start leasing assets to plug up budget deficits, pretty soon they’ll be selling off anything and everything they can get their hands on. It’s a slippery slope.”
Proponents say such partnerships allow the government to generate cash and free itself from the burden of improving and maintaining expensive and crumbling public assets. Critics argue the trend places profits ahead of safety, service and accountability.
The global financial meltdown has slowed things down, some experts say, but such partnerships will almost certainly grow more common. There are too many projects and too few dollars for it to be any other way.
“The needs are enormous, way beyond the ability of federal, state and local governments to cover them,” says Richard Norment, executive director of the National Council for Public-Private Partnerships. “PPPs are a way for the government to amplify the impact of the money it plans to spend.”
Americans have traditionally been leery of entrusting corporations to do work historically reserved for the government, which is why the United States lags behind the rest of the world in turning to public-private partnerships. London’s Heathrow Airport, for example, is privately run, as is Canada’s air-traffic-control system. The corporate sector has built 3,400 miles of highway in France alone.
It’s a growing trend around the world, and institutions like the Carlyle Group, Credit Suisse, Goldman Sachs and other firms reportedly have amassed some $250 billion to invest in infrastructure projects in the United States and elsewhere. If they spent every cent of it here, it still wouldn’t be enough.
America’s infrastructure shortcomings are simply too staggering. One in every four bridges in the country is deficient or “functionally obsolete,” according to the American Association of State Highway Transportation Officials. A study by Deloitte suggests poorly maintained roads contribute to more than one-third of the nation’s auto fatalities. The nation’s water-treatment plants leak as much as 10 billion gallons of raw sewage annually, the Environmental Protection Agency reports. The list goes on.
At issue here is a far more significant issue than finding ways to fund desperately-needed infrastructure projects during a global economic crisis. The overarching concern is simple, but not easy: Who owns America's resources, who profits from these partnerships, and where does the money go? When private interests control or own public resources (e.g., water and electric systems, roads, highways, ports, airports, prisons, schools, etc.) and natural resources (water, land, mineral rights, forests), who benefits? While local workers are unemployed or underpaid, private companies reap the profits and take their loot offshore. We have only to look at third-world nations, where corrupt political systems auction off natural resources to the highest bidder, and the people dig for water with sticks. Thanks to our dim grasp of public policies, resistance to adequate taxation to sustain the commons, and new generations of financial robber barons, America is well on its way to becoming a third world, post-industrial nation. This unsupportable trend will leave us with three classes: the desperately poor; the former middle class now condemned to be perpetual applicants for scarce positions they'll never be hired to fill; and the uber-rich who remain above it all...as long as the desperately poor can still pick crops to feed the rich. I'mnot advocating isolationism--I AM advocating for an American economic system that benefits the majority of Americans, and like systems around the world. Auctioning off our resources to the highest bidder will never achieve that goal.