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Public Private Transportation Act Reform

The Public-Private Transportation Act is intended to facilitate private investment in public infrastructure and transportation facilities. But because of flaws in the system, the PPTA has done more to subsidize sprawl than save taxpayers money.

Statement of the Issue

Virginia’s Public-Private Transportation Act of 1995 (PPTA) has become increasingly central to the Commonwealth’s transportation program. The PPTA allows private entities to enter into agreements with VDOT to construct, improve, maintain, and operate transportation facilities.  Yet experience with PPTA projects and proposals indicate that the statute is seriously flawed and raise significant doubts about how effectively it serves the public interest.

Background

The PPTA is designed to facilitate private investment in public infrastructure and transportation facilities. 

It allows both solicited and unsolicited proposals, and is viewed by its supporters as a way to make needed improvements and additions to the state transportation system sooner, more cheaply, and more efficiently than with public funds alone.  Projects undertaken so far under the PPTA or its predecessor include the Dulles Greenway and Route 28 interchanges in Northern Virginia, the Pocahontas Parkway (Route 895) in Richmond; and Route 288 in Richmond.  There are numerous additional PPTA proposals currently underway or under consideration by VDOT.

The track record of PPTA projects thus far calls into question the claims made on behalf of the statute.  Among other things, potential costs and liabilities to taxpayers have often been underestimated or not provided to the public.  Under the agreement for the widening of the Capital Beltway, for example, state taxpayers will have to pay an undisclosed amount to the project developer if carpooling and transit use of the new High Occupancy Toll lanes rise above a certain level.  This is in addition to the hundreds of millions of tax dollars being poured into the project, which was originally projected to cost taxpayers little or nothing.  In addition, in the past, the bonds for the Pocahontas Parkway were downgraded and placed on a watch list by credit agencies because traffic and toll revenues were lower than expected. Although the PPTA could be an innovative tool for getting transportation projects funded and built, there are many apparent problems with the Act, including concerns that:

• It undermines sound transportation planning by advancing projects that are not high priorities for the public, moving proposed projects to the head of the list of projects under consideration and making a claim on state revenues at the expense of other projects.
• Opportunities for public input into the PPTA process are limited.
• Environmental review of proposals is circumvented or undermined, among other things due to the time tables for decisions under the PPTA and the selection of a proposal before it has been studied or alternatives evaluated.
• Requirements for competitive bidding are inadequate, and have allowed a project proponent or bidder in the first phase of a proposal to establish a sole-source arrangement for later phases. 
• Applicants have failed to disclose all of the necessary information about costs and design.
• There has been a lack of information about potential costs to taxpayers and potential risk to the state’s bond rating.
• It creates incentives for sprawl, driving, and environmental damage.  The primary concern of PPTA developers is maximizing profit, not the public interest.  For example, the previous owner of the Pocahontas Parkway supported a massive new development and an additional interchange that would increase the amount of traffic (and revenue) on the highway.  Most PPTA projects built or proposed thus far have been highway construction that will subsidize sprawl and increase motor vehicle dependence, destroying open space and increasing air and water pollution.

Recommendations

Support PPTA reform. Legislation to improve the PPTA should be supported.  Potential measures include:

• Requiring greater public input into each proposal (such as traditional public hearings at an early stage of review and a public hearing before an agreement is signed).
• Requiring approval of PPTA proposals by the Commonwealth Transportation Board (CTB).
• Limiting proposals under the PPTA to projects contained in state transportation plans and to projects with complete environmental studies.
• Redefining the process to ensure that bidding is competitive, including requirements for national and international advertising and a longer response period.
• Giving priority to proposals that include significant private sector equity contributions.
• Requiring evaluation of the impacts of any proposed project on land development patterns.

Oppose additional taxpayer funding until the PPTA is reformed. The General Assembly should not provide any additional funds for specific projects or for the Transportation Partnership Opportunity Fund it created to support PPTA projects until the PPTA is reformed.

• vcn@vcnva.org
• 804.644.0283