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Public-private ventures may build future schools, roads, water systems

Saturday, Nov. 2, 2013 12:10 PM
Last updated 8:32 PM
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ATLANTA -- Getting quicker, better and less expensive roads, schools, water systems and other government facilities may sound like unachievable campaign promises, but a Senate committee is studying a concept that supporters say has delivered in other states and Europe.

The idea is to create public-private partnerships, or what insiders call P3s. They would start with a state or local government agency announcing a need and then letting private businesses suggest ways to solve it.

It differs from traditional government procurement because it frees the companies to innovate instead of merely bidding on a set of blueprints specified by the bureaucracy. And the innovations should include ways to finance the project that stretch taxpayer funds by relying -- at least in part -- on company investment up front.

Instead of the Department of Transportation issuing copies of plans for building a bridge, it would merely announce that it needs a way to get more vehicles across the river. Companies might suggest a double-wide structure, a double-decker one or maybe even a tunnel instead.

“There’s a lot of trust involved. And people in state government, as least in construction, aren’t used to being that trusting,” said Kimberley Lipp, chief of architecture and engineering in the Virginia Department of Corrections where she’s overseen construction of two P3 prisons.

Virginia is the acknowledged P3 leader among states since it enacted the first legal mechanism in 1995. Last year, its governor committee $1.5 billion to P3 projects which will have at least that much or more private investment.

“I’m glad it’s working well because we want to try it here,” said Sen. Hunter Hill, R-Smrna.

Hill is the sponsor of Senate Bill 255 that would create the mechanism here for similar projects. Virginia’s P3 law has bipartisan support, and Hill’s legislation could draw broad backing as well, but it was introduced after the midpoint of the last legislative session, too late for consideration. So, Lt. Gov. Casey Cagle appointed Hill to chair a temporary committee of senators and industry experts to study the issue and make recommendations before the next session begins Jan. 13.

One of the Democrats on the committee, Sen. Hardie Davis likes the concept.

“I have a couple of projects in my mind for Augusta that are candidates for this bill,” said Davis who has announced plans to run for mayor of Augusta.

The partner corporations would not only supply the ideas but also some or most of the money. To get repaid and earn a profit, they would usually get the right to operate the facility for several decades for a fee.

In many cases, those fees would be paid not by taxpayers but by the users, such as toll roads or bridges, rents or surcharges. The details are negotiated by an agency panel and the company on a case-by-case basis.

In an era of tight government budgets, P3s appeal to politicians like Hill who aren’t eager to raise anyone’s taxes.

In Virginia, there has been some public grumbling that the process is so streamlined and so protective of company “trade secrets” during the negotiations that the users who’ll be paying the tolls and fees feel left out.

But the financing isn’t the only advantage, according to Bill Clark, managing principal of Stevens & Wilkinson Stang & Newdow, Inc. and representative of the American Institute of Architects.

“We feel this should be a value-added process, not just another way to finance a project,” he said.

Witnesses like Clark have offered the committee a host of recommendations to keep the process efficient and on target. Two GOP senators on the committee, Brandon Beach of Alpharetta and Steve Gooch of Dahlonega, previously served on the State Transportation Board when it was swamped with P3 proposals that the Department of Transportation never completed in Georgia’s only experiment with public-private partnerships. And the pair also has suggestions to keep the process effective if it’s going to be made available for every state and local government entity.

Hill’s legislation is likely to be one of the most heavily lobbied of the coming session, and to believe its proponents, one of the most beneficial. So, it’s likely we’ll be hearing much more about it in the coming months.

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whozit 11/02/13 - 11:55 am

There are some things government is just more suited to provide. Imagine the happiness of drivers if they were forced to pay a toll eery time they made a turn. Cross the Butts, pay a toll. Turn onto 15th, pay a toll. Catch San Sebastien, another toll. Get onto Riverwatch, one more toll. And then another to enter onto I-20. How about schools funded by Coca-Cola. Of course the only beverages allowed would be those provided by the sponsor. Welcome to the Augusta jail sponsored by Toyota. Talk about the government picking winners and losers and the probability of corruption. With every project up for selection by political boards, there would be no end to the purchase of politicians.

dichotomy 11/02/13 - 12:24 pm
Yeh, we got such a great deal

Yeh, we got such a great deal on the TEE "partnership" didn't we. I wouldn't trust our local OR state politicians to negotiate ANY of these kinds of deals. Like whozit said, they would have us driving around with our windows rolled down permanently so we could be stuffing dollar bills in toll booths every few miles.

The real problem is that the POLITICIANS have finally come up with so many GIVEAWAY programs that they can no longer pay for the REAL purpose of government at all levels. They have wasted and stolen so much that the well is dry. Now they want to make us pay to use the things that we have already paid for with our taxes and that they failed to do. Just like our local garbage fee and RAIN TAX. WE TAKE YOUR TAX MONEY, BLOW IT, AND NOW YOU HAVE TO PAY EXTRA FOR ANYTHING YOU GET. Garbage....extra tax......Fire Department......extra tax.......drain pipes and ditches......extra and maintain roads......extra tax........OH WAIT, now they we have the extra tax let's talk about PARTNERSHIPS and TOLL BOOTHS.

I'm telling you, it's time to tear it all down and start over again. Big government, crooked politicians, and socialists are killing us.

Little Lamb
Little Lamb 11/02/13 - 09:57 pm

Augusta Consolidated Government has proven inept at negotiating public/private partnerships, as Dichotomy pointed out with the TEE Center and the Marriott parking deck as exhibits A and B. The fiascos regarding The Patch and the bus system follow closely behind.

There is a hope that the commission will kill the $300,000 transfer to that "collaboration center" boondoggle at the old Chamber of Commerce building in the middle of Broad Street. Please, Please, Please stick a wooden stake in that idea, Commissioners.

seenitB4 11/03/13 - 07:52 am
Hot Lanes in Atlanta

I hate them....they are made over pavement that we have ALREADY paid for with, we are paying to ride on the same paved roads....what may help a very few....the reason they call them the Lexus lanes.....think about this.....sometimes the charge is $5 bucks one many workers can afford this on a weekly basis...$40 dollars a week to drive to work!

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