The tragic bridge collapse in Minneapolis last Wednesday should be a wake-up callfor New Yorkers. The Empire States roads and bridges are in far worse shape than Minnesotas, and they will require tens of billions of dollars to repair and replace. A recent study by the Reason Foundation rated New Yorks transportation infrastructure the third worst in the nation, with more than 37 percent of its bridges structurally deficient, well above the national average of 24 percent. Unless New York starts tapping new sources of capital, including more money from the private sector, it will never find enough to pay for all the necessary work, and every project that it delays or defers will put drivers at risk.
For years the state has scrimped on infrastructure investments, as money funneled into areas like Medicaid and public-sector pay and benefits has crowded out spending on roads and bridges. During the 1990s, for instance, state expenditures for road and bridge maintenance, adjusted for inflation, declined by $300 million. New Yorks voters in 2005 did approve $2.9 billion in borrowing for transportation items, but the state needs to spend way more than thatsome $70 billionand voters are wary of continually adding more debt. Meanwhile, soaring gas costs make raising New Yorks already high gas tax to finance the spending politically unpalatable.
But the states leaders have strangely ignored the private sectorthe source of $360 billion in infrastructure financing worldwide over the past 20 years. Much of this money has been invested through build-to-operate partnerships, in which private consortiums pay for and build roads, bridges, and tunnels in exchange for the right to operate them and collect tolls. These deals have become common in places like France and England, and are growing in the United States. Texas, for instance, is using public-private partnerships to help build its massive Trans-Texas Corridor, a network of some 600 miles of roads. In California, a private company is constructing a nearly ten-mile, $800 million extension of Route 125, south of San Diego, in exchange for a 35-year lease to manage the road and collect tolls.
To understand how such an approach might serve New York, its useful to think of the predicament that the state faces with the Tappan Zee Bridge, built on the cheap in 1955 and not intended to last more than 50 years. While repairs on the bridge are ongoing, the state ultimately needs to replace itat a cost north of $10 billion, money that New York doesnt have. Finding federal transportation aid will be tough, because the project will be competing with Manhattans Second Avenue subway line and the proposed new rail tunnel between Manhattan and New Jersey.
But New York could issue a request for proposals from private investors, setting out design specifications, maintenance standards, and a schedule of toll rates for years to come, and then see what bids it getseither to finance the road entirely or to participate with the state in exchange for a share of toll proceeds. Though a $10 billion project might seem like a lot for private investors, hundreds of billions of dollars are sitting in international pension funds, whose managers are looking to invest in projects that provide a steady, predictable stream of incomeas toll collections do.
Critics complain that its the governments job to build and operate roads and bridges, not the private sectors, but thats increasingly not the case in the rest of the world. And when it comes to a very big project like the Tappan Zee Bridge, the choice may not really be between government and private sector, but between letting someone else do it and not doing it at all.