Pennsylvania Approves P3 Legislation

On July 5th, by signature of Governor Tom Corbett, Pennsylvania joined 32 other states in the U.S. that authorize public-private partnerships (also knows as P3's), an innovative transportation financing and project delivery mechanism that is endorsed by the U.S. Department of Transportation and the Governor's Transportation Funding Advisory Commission.  Though the bill's primary sponsor, State Representative Richard Geist, was the first to admit that this new law would do little to rebuild bad roads and the state's growing list of distressed bridges, he noted "this is just a tool to do big projects".  The measure, Act 88 of 2012, will allow private sector enterprises to propose new highway projects, and give state and local governments more flexibility to use firms to design, build, finance, and manage roadways.

"My legislation will open the door to unprecedented investment in Pennsylvania's infrastructure at a time when it is desperately needed and will create a multitude of jobs in the engineering and construction industries, both of which have been mirred in a prolonged downturn," Geist said.  "While public-private partnerships alone cannot solve what has become an enormous transportation infrastructure funding problem, they are certainly a critical tool for the Commonwealth to have at its disposal as it confronts this problem."

P3's are most often used to fund capacity enhancing projects on major highways or interstates.  Supporters of these innovative financing tools often point to Virginia's P3 to build express lanes on I-495 west of Washington, D.C.  Those new lanes will be free to vehicles containing more than two people, and available for a toll to all other drivers, the price of which would rise or fall depending on congestion.  Such a P3 model is often referred to as a HOT (high occupancy toll) lanes.  In addition, express toll lanes are another example of a P3 which adds new capacity added to a highway and then assesses a toll that is adjusted for congestion/time-of-day for all users.  Other examples of P3's include Denver's $6.5 billion FasTracks commuter/light rail extension and San Francisco's $1 billion Presidio Parkway.

Supporters of P3's in the Commonwealth envision that this new legislation could, potentially, allow for new lanes on I-95 or the Schuylkill Expressway, with drivers paying a variable toll to use these lanes and avoid the congested free (or existing) lanes.  The new law specifically prohibits the lease of the Pennsylvania Turnpike, unless separate action is taken by the PA General Assembly.  The law also appoints a seven-member Public-Private Transportation Partnership Board that would have the authority to approve any proposed P3's in the Commonwealth, though the General Assembly would have the authority to overrule the Board within 20 days.  The seven members on the Board will consist of four appointed by the PA General Assembly, one from each legislative caucus, the Secretary of Transportation, the Secretary of the Budget, and one gubernatorial nominee.