DOT officials hint at rulemaking on public-private partnerships

| Wednesday, February 13, 2008

While a congressional hearing on transportation funding dealt with several important issues, including a possible federal rulemaking on public-private partnerships, the media circus on Capitol Hill was reserved for the steroid hearing down the hall.

Rep. James Oberstar, D-MN, chairman of the U.S. House Transportation and Infrastructure Committee, incorporated a few quips about the baseball scandal in his opening remarks Wednesday, Feb. 13, prior to testimony from U.S. Transportation Secretary Mary Peters.

“Secretary Peters will not be under the same scrutiny as (pitcher) Roger Clemens next door,” Oberstar said, “... but we could sure use a transportation system on steroids.”

Peters played along despite recent tangles with the House T & I Committee about the Bush administration’s transportation funding policy.

“I know there’s a Clemens hearing next door, but I believe this hearing is more important,” Peters said. “Just for the record, Mr. Chairman, I have never taken human growth hormones.”

The transportation hearing, as expected, changed to serious tones as Peters faced questions about her stance on the federal role in transportation funding.

Peters’ opinions go against the majority of an appointed commission that she chaired called the National Surface Transportation Policy and Revenue Study Commission.

Nine of the commission’s 12 members want to see an increased federal role in transportation funding including a short-term increase in the federal fuel tax. Peters and two other commissioners are promoting increased use of public-private partnerships, toll roads and congestion pricing.

Oberstar said a reliance on the private sector to control transportation dollars with tolling and congestion pricing is a “narrow, uninspired and fragmentational approach.”

Oberstar and other Democrats on the House T&I Committee side with the commission’s majority recommendation for increased funding. Debates continue about how to achieve the goal.

The struggle over future policy continues as members of the U.S. House and Senate prepare to write the next transportation funding bill in 2009.

When asked about parameters and controls for public-private partnerships as a transportation philosophy, Peters hinted that the U.S. Department of Transportation is working toward a federal “notice of proposed rulemaking” to outline the rules.

T&I Committee Vice Chairman Peter DeFazio, D-OR, said many members of Congress would like to rein in PPPs to avoid some of the risks to the public, such as exorbitant toll increases. He cited the example of the Indiana Toll Road, which Gov. Mitch Daniels leased in 2006 to private investors from Spain and Australia for $3.85 billion.

In the lease agreement, the investors included a clause that Indiana be prohibited from upgrading any alternate routes within 10 miles of the toll road that would compete with the toll road. That provision is known as a non-compete clause.

DeFazio urged Peters to prohibit non-complete clauses in future dealings with public-private partnerships.

Peters pointed to a recent report by the Government Accountability Office that called for similar restrictions on PPPs.

Peters agreed that the GAO report is full of sound guidelines.

Also testifying before the House committee on Wednesday was Pete Rahn, director of the Missouri Department of Transportation, representing the American Association of State Highway Transportation Officials.

Rahn said Missouri has 27,000 miles of roads and he doesn’t see public-private partnerships as being the “silver bullet that’s going to solve transportation.”

Christopher Boylan, deputy director of the Metropolitan Transportation Authority in New York and Randall Mullett, vice president of government relations with Con-Way in Washington, DC, also testified.

– By David Tanner, staff writer
david_tanner@landlinemag.com

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