Originally created 11/24/03

Measure paves way for privately financed roads



ATLANTA - Georgia motorists could one day choose newer roads with limited traffic, but they would likely have to fork over a toll for the convenience.

To Athens resident Geriann Akin, the choice is simple. If a private toll road sped up her frequent trips to Atlanta, she'd be willing to pay $25 each way.

"Definitely," she said. "Right now on (Interstate) 85, there's so much construction, so must congestion."

Some developers are betting others feel the same way. So they quietly pushed through a bill at the end of the last session of the General Assembly to allow them to propose roads and rail lines that the government hadn't considered.

Passage of the measure launched Georgia on an experiment likely to have ramifications for years to come.

With last week's adoption of the rules and guidelines that will govern the new law, the state's attempt at private financing of highways and, perhaps, rail lines could begin in a matter of days.

Supporters say tight budgets at the state and federal levels have left the public sector without the critical mass of funding needed to build major projects fast enough.

They cite as a prime example languishing plans to convert Georgia 316 between Athens and Atlanta's northeastern suburbs into a limited-access highway.

"Our congressmen realize the importance of this corridor, but the big bucks are not there," said E.H. Culpepper, of Athens, part of a group of business executives spearheading the 316 project. "There's got to be an innovative way to approach this to get it done."

But critics say the government wouldn't have to resort to private financing of transportation projects if policy makers would stop scattering road money across the state willy-nilly instead of focusing funds where they're most needed.

"This is the solution to a problem politicians have created for themselves by refusing to prioritize - by trying to be everything to everybody," said Neill Herring, a lobbyist for the Georgia chapter of the Sierra Club.

Under the new law, unsolicited projects submitted to the state Department of Transportation will not be subject to the competitive bidding process that normally governs projects run by the DOT.

Instead, the department will have five days to notify the public of the existence of an unsolicited proposal from a contractor and 30 days to decide whether to accept the project.

From that point, other contractors will have 90 days to put in competing proposals.

The proposals will outline how the contractor intends to finance the project and how the investors will recoup their money.

With such a rapid timetable, supporters expect privately financed road and transit projects to move from conception to completion much faster than under the traditional state-run process.

Senate Transportation Committee Chairman Tommie Williams, R-Lyons, the law's chief sponsor, said the 316 project, for example, could be done in eight years instead of two decades.

The nature of private financing will force the projects to be fast-tracked, said DOT Treasurer Earl Mahfuz, who headed the staff team that developed the rules and guidelines.

He said investors won't be willing to keep their money in a project that drags.

"Time is an enemy of these types of proposals," he said.

Investors are most likely to recover the money they put up for roads from tolls or - in the case of transit projects - from fares.

Even the most ardent supporters of private financing say project designers will have to be careful how they set those charges.

"We can't hit (motorists) too hard with a high toll," said Rep. Bob Smith, R-Watkinsville, a longtime booster of the 316 project.

Setting tolls is simply a matter of common business sense, said Bob Berry, the head of the Atlanta office of The Washington Group, an international construction and engineering company.

The firm was at the table both in drafting Mr. Williams' bill and preparing the rules and guidelines, and is interested in bidding for the 316 project.

The Washington Group built the privately financed and operated Dulles Greenway in northern Virginia, which opened in 1995, linking Dulles International Airport with Leesburg, Va., 14 miles to the west.

Drivers pay $1.90 to travel the length of the highway, which comes to about 13 1/2 cents per mile.

"It's a balancing act that you have to do," Mr. Berry said. "You have to clearly understand the cost of the project and clearly understand the revenue stream. It's got to be a revenue stream that's palatable."

Beyond the challenge of setting tolls that will make a profit for investors and still be acceptable to motorists, Mr. Herring is concerned that privatizing transportation projects is an open invitation to abuse.

He points to a long track record of close connections between state politicians and road builders, greased with campaign contributions.

"The political culture of asphalt in Georgia is fundamentally and historically corrupt," he said.

TRANSIT TIME

Here is a timeline for submission of private road and transit project proposals to the Georgia Department of Transportation under legislation passed this year by the General Assembly and rules governing the new law:

5 DAYS: The public is notified of the existence of an unsolicited project proposal from a contractor.

30 DAYS: The Department of Transportation decides whether to accept a project.

90 DAYS: After the project is accepted, other contractors can submit competing proposals.

Source: Georgia Department of Transportation