The unsuccessful effort last year to lease the Pennsylvania Turnpike to private investors provides valuable lessons for other cash-strapped states seeking to fund their highways and bridges, according to a new report by the Pew Center on the States. With an annual funding gap of $47 billion between the roadway projects the nation needs and those it can afford, states with large deficits and an urgent need to fix aging infrastructure are looking closely at public-private partnerships—a financing approach used in other countries for years but only recently adopted in the United States.
In Pennsylvania, lawmakers debated a proposal to lease the cross-state turnpike to Citi Infrastructure Investors and the Spanish firm Abertis Infraestructuras for an upfront payment of $12.8 billion. The high-profile deal was shelved last fall after a number of legislators refused to support the plan over concerns about the state’s financial assumptions and oversight, among other reasons. Pew conducted an in-depth analysis of the state’s effort to help policy makers around the country learn from the Pennsylvania experience. The report identifies the information states need and the issues they should consider when evaluating proposed agreements with private companies to fund infrastructure improvements. States considering public-private partnerships to fund infrastructure should have clear, data-driven answers to key questions.
“If states want to compete economically, they need sound infrastructure that helps businesses thrive and improves residents’ quality of life,” said Susan Urahn, managing director of the Pew Center on the States. “The failure of the Pennsylvania Turnpike lease proposal offers important lessons because private capital is likely to play a growing role in helping states pay for their infrastructure needs.”