Column: Do not attach conditions to infrastructure projects | Chroniclers
The recently passed bipartisan $ 1.2 trillion infrastructure bill will provide the federal dollars the government desperately needs to fix our roads, water systems and other public infrastructure. But the bill is not just sun and rainbows.
One provision in the bill encourages state and local governments to cede control of some of the new projects to businesses and private investors. And that will create opportunities for bad things to happen.
Much of the new federal spending will go to filling potholes, fixing bridges, lowering the cost of high-speed Internet, and building other things our communities need. But for large transportation projects supported by the federal government, state and local governments will be required to consider additional funding from private investors.
The danger is that this additional funding comes with strings attached. Private investors negotiate contracts – called “public-private partnerships” – which allow them to profit from increased water prices or higher tolls on highways, or to charge the government for expensive rents. .
These contracts are not only more expensive than if the state or locality used traditional public funding, but they also often allow private investors to shape public policy.
The city of Chicago, for example, signed a public-private partnership in 2008 to lease its downtown parking meters to a group of investors including Morgan Stanley and a Middle East sovereign wealth fund. Today, at 62 years of the 75-year lease, investors have already achieved a return on investment of 143%. This profit could be used to invest in Chicago’s public schools or to improve public safety, but instead it leaves town. Not only that, the city has to pay investors if they make changes that reduce parking revenue, like holding a street fair or adding bike lanes or dedicated bus lanes.