Arizona DOT: Public-Private Deals Can Deliver Infrastructure, Reduce Costs

As the Arizona Republic reports, Arizona Department of Transportation CFO John McGee told a state legislative committee yesterday that PPPs can play an important role in delivering future transportation infrastructure:

McGee said that so-called public-private partnerships, which he referred to as P3s, are gaining popularity nationwide as a way to reduce the costs of expensive road projects. “P3s are not a panacea for the state’s long-term transportation funding,” McGee said. “However they can be an important component of the development of transportation facilities.”

Partnerships are increasingly important as improved fuel efficiency and expanded public transportation reduce gasoline-tax revenue, which covers a substantial portion of highway construction costs, McGee said. […]

McGee said private rest stops, which are allowed under a new state law, can save as much as $12 million in costs apiece. He pointed out a system in Utah, where the state partners with restaurants and gas stations that provide services to drivers and are designated as official rest areas.

ADOT is already using private partnerships to reduce some costs, McGee said. The agency has avoided paying for some planning costs by requiring road builders to design their own projects based on parameters from the state. The result has been significant cost savings, including $60 million on one project to expand U.S. 60 in parts of Tempe and Mesa, McGee said.

More on the emerging issue of privately financed transportation infrastructure in Arizona here, here, and here.

Reason’s Transportation Research and Commentary