So Ed Ring and others of his ilk tell us that if our deteriorating state infrastructure just had a “quick cash infusion” from the private sector, investors would assume all the risk and our water and transportation problems would be solved (“Private investment can break state’s infrastructure logjam,” Viewpoints, Dec. 8).
That delusion has an expensive dark side. These so-called public-private partnerships that supposedly save time and money have been a disaster for California. In the real world, they lead to excessive costs, bankruptcies and taxpayer bailouts.
Route 125 in San Diego, for example, was backed by private money when it went over budget. It went bankrupt and defaulted on a loan from taxpayers who had to pay $352 million to buy out the private consortium.
Taxpayers also bought out the Route 91 toll road project in Los Angeles after the contractor blocked efforts to relieve freeway congestion so that the toll lanes could rake in extra profits. More recently, the Presidio Parkway project in San Francisco was fully funded with public money and on schedule before the state turned it over to private interests.
The cost doubled to more than $1 billion in taxpayer funds that could have been used for other congestion-relieving projects. That wasn’t enough for the contracting consortium, which demanded and received another $120 million more than the supposedly fixed price in the contract. Taxpayers had to come up with that money, too.
Ring cites such projects as “safe and high-yield investment opportunities” for retirement systems, citing the recent $5.7 billion auction of an Indiana toll-road operation to CalPERS and other pension funds. He didn’t mention that the Indiana auction came after the private firm operating the toll road filed for bankruptcy.
California’s water and transportation infrastructure is in bad shape. However, solving the problem must be based on experience and facts, not the financial fantasies fashioned by the whims and greed of privateers.
Bruce Blanning is executive director of Professional Engineers in California Government, which represents 13,000 state engineers and other professionals. He can be contacted at email@example.com.