Out of Control Policy Blog

Friday Privatization News Highlights (6/24/2011 edition)

News articles on some of the more interesting developments on the state and local privatization front this week include:

  • "Goldman group wins Puerto Rico PPP deal" (Reuters): Officials in Puerto Rico have selected a winning bidder for a 40-year, $1.08 billion concession to operate the commonwealth's PR-22 and PR-5 toll roads. A consortium led by a Goldman Sachs infrastructure fund and Spanish toll-road concessionaire Abertis submitted a winning bid 12.5% higher than a competing Morgan Stanley/OHL Concesiones team, and the Goldman/Abertis bid was 20% higher than a baseline target of $902 million set by Puerto Rico government officials. In addition to the upfront payment, the Goldman/Abertis team will invest $56.1 million in capital improvements during the early years of the contract, as well as an estimated $300 million in highway maintenance over the life of 40-year contract.
  • "Push for Arizona parks privatization" (Fox11AZ.com): An update on Arizona State Parks' exploration of the use of public-private partnerships for the operation and management of state parks. Includes a discussion with Warren Meyer of parks management concessionaire Recreation Resource Management that examines some of the myths surrounding the private operation of public recreation areas.
  • "Monmouth Park lease to Morris Bailey finalized" (The Star Ledger): Though unofficial, sources indicate that the New Jersey Sports & Exposition Authority has finalized negotiations on a 5-year lease of the operations of Monmouth Park—a money-losing, state-owned racetrack—to real estate developer Morris Bailey. A similar arrangement for the operations of the Meadowlands racetrack is also underway. Separately, the newspaper reports that legislation setting various parameters of the racetrack privatizations is moving forward in the New Jersey legislature.
  • "State to privatize ADOC health care" (Eastern Arizona Courier): Gov. Jan Brewer has signed House Bill 2154 into law, paving the way for the privatization of correctional health care services by the Arizona Department of Corrections
  • "Privatization plan consultant: Frederick County could save 13 to 21 percent a year" (Frederick News Post): Officials in Frederick County, Maryland received a consultant report prepared by Sandy Springs (GA) founding father, Oliver Porter, which estimates that the county could save between $84 million to $109 million (13-21%) by outsourcing the county's core services. The full report is available here. And in case you missed it, be sure to check out Reason.tv's recent video on the Sandy Springs privatization model.
  • "Sandy Springs reduces budget without cutting services" (Atlanta Journal-Constitution): Speaking of Sandy Springs, the city is shifting its approach to privatization—primarily by disaggregating its original two, bundled service contracts into smaller pieces—and city officials have passed a 2012 budget that is $7.2 million smaller than 2011, reflecting the savings from the new bidding model. City officials note that despite the smaller budget, levels of service will remain the same.
  • "City asks for suggestions to improve animal welfare operation" (Tulsa World): City officials in Tulsa, Oklahoma are soliciting ideas on turning over the Tulsa Animal Shelter to a private operator in a public-private partnership. This is one of many privatization recommendations included in a KPMG efficiency report earlier this year, and the city has already implemented a similar partnership for the operations of the Tulsa Zoo.
  • "Public golf courses will be privatized" (The Record): Earlier this week, the Stockton (CA) City Council approved the privatization of two public golf courses currently operating in the red. KemperSports Management, Inc. will enter into a 5-year contract with the city expected to reduce operating losses at the courses by $1.3 million over the contract term.
  • "Union eyes bid for city contract" (Gloucester Times): City officials in Gloucester, Massachussetts plan to bid out various city custodial services to save an anticipated $400,000 in the next fiscal year, and they will entertain a bid from the public employee union representing current custodial employees—along with proposals submitted from qualified private sector providers—in a head-to-head "managed competition."

For more on privatization, see Reason Foundation's privatization research archive.

Leonard Gilroy is Director of Government Reform


« FTC Declares War on Google | Main | Local Government Meets the New… »




Out of Control Policy Archives