House discusses private sector participation

News ARTBA May 19, 2004
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The House Subcommittee on Energy Policy, Natural Resources and Regulatory Affairs held a hearing today on "maximizing" private

The House Subcommittee on Energy Policy, Natural Resources and Regulatory Affairs held a hearing today on "maximizing" private sector participation on the nation's transportation sector. According to Subcommittee Chairman Doug Ose (R-Calif.), infrastructure improvements projects "can often be completed more quickly and at reduced costs" when done by the private sector.

The hearing focused on two key issues: Examing how the U.S. Department of Transportation is complying with the 1966 law that created the agency and required it to "facilitate the development and improvement of coordinated transportation service, to be provided by private enterprise to the maximum extent feasible;" and recent cases where DOT grants allegedly assisted public agencies to complete unfairly with private companies that provided equivalent services.

Assistant Secretary for Transportation Policy Emil Frankel summarized the innovative finance and public-private partnership provisions of the Bush Administration's TEA-21 reauthorization proposal during the first panel. His statement highlighted the proposed revisions to the Transportation Infrastructure Finance and Innovation Act (TIFIA) and State Infrastructure Back (SIB) programs, as well as the proposed expansion of toll roads and private activity bonds to promote more public-private partnerships.

In its reauthorization proposal, the Administration recommended the TIFIA program be expanded to include a public freight rail facility providing public benefit, and an intermodal freight transfer facility. In addition, the proposal recommends the minimum project size be reduced from $100 million to $50 million. Both the House and Senate reauthorization proposals contain these revisions to the TIFIA program. The Senate and House bills go beyond the Administration's SIB revisions by opening the program to all 50 states.

During the second panel, Ose and Rep. John Tierney (D-Mass.) asked the panelists for advice on how to ensure federal grants are not used to undermine the competitiveness of existing private companies providing transportation services. Dr. Adrian Moore of the Reason Public Policy Institute recommended the inclusion of new, unspecified criteria in the project selection process that would prevent harm to private sector transportation services providers. Dr. Moore's statement also endorsed the expanded use of tolling to finance new roadway capacity, including truck-only toll lanes--both of which are ARTBA reauthorization goals.

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