Florida’s New PPP Project

The Wall Street Journal reported today anothe new PPP project for Florida.

In a deal struck last week, a Spanish-led group will be paid as much as $1.8 billion over 35 years to design, build, operate and maintain three new toll lanes along traffic-clogged Interstate 595 near Fort Lauderdale. The agreement came as something of a surprise during a period of turmoil in credit markets, and many experts called it a model for how states and private investors can work together to upgrade the nation’s aging roads, bridges and other transportation infrastructure.

The US Secretary of Transportation Ray LaHood said Florida’s funding issue is a microcosm of a national problem, and the government should support public-private partnerships as one way to solve it. The administration has agreed to provide Florida with $600 million in low-interest loans to support the 595 deal under a program established by the Transportation Infrastructure Finance and Innovation Act, or Tifia. Last week, Mr. LaHood called the Florida deal “part of the Obama administration’s commitment to reviving the economy and putting Americans back to work.

As my colleague and founder of Reason Bob Poole said, “This project is a harbinger of what we may be seeing over the next decade or so, as we don’t have enough money for major construction”

The Obama administration has rejected the idea of increasing the 18.4-cent-a-gallon federal gasoline tax to raise revenue for infrastructure projects. That could lead states to pursue more private-funding options.

Undoubtedly we will see more private deals in the future.