Pennsylvania Explores P3s for Transportation Projects

April 2011Newsletters In the Zone

The Pennsylvania Department of Transportation is currently faced with a $3.5 billion annual shortfall in funding for highway and mass transit projects, as revealed in the Transportation Advisory Commission 2010 funding study.

During his testimony (watch video ) before the state Senate, Acting Secretary of Transportation Barry Schoch addressed the shortfall and offered ideas on how the Corbett administration may finance the problem. One option for financing major transportation projects may involve public-private partnerships (P3s) in which the Commonwealth would lease state resources to a private company. Schoch said the use of such partnerships could be used for the construction of new roads or adding capacity to existing highways.

The idea already has support in the state legislature. House Transportation Committee Chairman Rick Geist (R-Blair) has introduced House Bill 3 , which would enable Pennsylvania to enter into transportation-specific partnerships as a tool to help meet growing infrastructure needs. His legislation has received the approval of the House Transportation Committee.

P3s are contractual arrangements in which the private sector teams with government to accelerate the maintenance, improvement and expansion of roads, bridges and other infrastructure, such as ports, airports, transit systems and parking facilities. Under a P3, the public entity maintains ownership of the asset or facility but contracts with a private entity to develop, construct, manage, operate or finance a given project.

Pennsylvania’s infrastructure includes 5,646 structurally deficient state-owned bridges, the most of any state in the nation. It includes 7,000 miles, or about 18 percent, of state-maintained roads in “very poor condition.”

Currently, 28 states and Puerto Rico have enacted laws authorizing the implementation of public-private partnerships. P3s are endorsed by the U.S. Department of Transportation and both the previous administration of Gov. Ed Rendell and current Corbett administration have publicly expressed support of P3s.

For more information, please contact Robert W. Gundlach, Jr. at 215.918.3636 or [email protected].