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A chance for private roads in D.C.

Adrian Moore
August 13, 2005, 12:51pm

In this WaPo op/ed, a couple of George Washington U. profs point out some of the details of a proposed privatiztion of part of the Washington Beltway. More important, they talk about how the proposed deal is strucuted and make some great recommendations for modelling in on successful similar deals in the U.K. The British experience offers critical lessons for Virginia. For example: ? The private sector, which invests in the projects, should bear the risk of operating the roads. In that way, the investors have a stake in ensuring that roads are built on time, without cost overruns, and are run efficiently. ? The private sector should demonstrate expertise and access to technology to create "value for money" in building and operating the project. ? The government should define what is to be built in terms of what it wants to accomplish, but it should allow the private sector to design the most cost-effective solution for the life of the project, usually 25 to 30 years or more. Service criteria, such as lane availability and safety, should be spelled out in the contract. ? Payments from the government to the contractor should not commence until the project is complete and the services are delivered. Payments for operating a road should decrease if the operator fails to meet agreed-to performance indicators. The Dulles Toll Road buyout proposal offers no sharing of risk, no demonstrated value for money and no performance benchmarks, all of which makes it look like a bad deal for Virginia taxpayers. However, the proposal might be restructured to bring in private investors and contractors in a British-style partnership.

Adrian Moore is Vice President, Policy


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