This is the model for many of the most successful global efforts over the past several decades that have added immeasurably to the common good of our world, and California really does need to consider this type of approach for our infrastructure.
A public-private solution to aging infrastructure
By Roger Niello - Special to The Bee
Published 12:00 am PDT Saturday, May 10, 2008
California will need at least $500 billion over the next 20 years to fulfill its infrastructure needs, the state Department of Finance estimates. By some accounts, our system of roads, public transportation, schools and hospitals is reaching Third World standards. We've come a long way from the days of Gov. Pat Brown, when infrastructure investment represented a significant chunk of the state's budget.
Unfortunately, we don't have the resources to meet our needs, even after the recent passage of transportation bonds.
Last week, the Assembly Business and Professions Committee missed an opportunity to expand the pie of resources available to modernize California's crumbling infrastructure. My legislation, Assembly Bill 2600, would have allowed state agencies to enter into partnerships with private firms, leveraging their abundant access to capital and diverse expertise. This arrangement is known as public-private partnerships, or performance based infrastructure, and is commonplace in many other states and many countries around the world.
If there's one thing that we should all agree on and take from this current state budget crisis, it's that California needs to start doing things differently. We need to look at budget reform, education reform, pension reform and reform of the way we build very expensive public works projects. A good place to start is by drawing on the positive experiences of other economies around the world.
Why partner with the private sector? The answer is simple. The private sector has access to capital, the private sector is designed to bear risk and guarantee a bottom line, and the private sector can be held contractually accountable by the public agency to deliver the best product for California's citizens, on time and on budget.
It all sounds logical enough, but unfortunately, in California, the challenge is political. Public employee unions are fearful that these partnerships will lead us down the path of privatization and public-sector job elimination. But only a small percentage of projects are candidates for public-private partnerships, as the method is used only where it adds value, and with a $500 billion need over the next 20 years, there will always be a significant role for state government engineers and employees to play in countless projects. Even on public-private partnerships projects themselves, state engineers and other government employees are a part of the project. And government will always play the role of setting the goals, establishing the rules, and ensuring that environmental and labor standards are met.
