The crisis of U.S. infrastructure, III

presumed reluctance of American taxpayers to pay up front, such projections have quickened the search for politically palatable alternatives to financing infrastructure projects — artful ways of ducking the costs. Hence the rising popularity of public-private partnerships, “or as we called them, business deals,” Everett Ehrlich, an expert on infrastructure financing, told the House Transportation and Infrastructure Committee in June. On 19 May, Pennsylvania governor Ed Rendell had announced the winning $12.8 billion bid (submitted by a Spanish toll-road company and a division of Citigroup) for a 75-year lease of the Pennsylvania Turnpike. The idea was not original. The city of Chicago signed a $1.8 billion lease for the Chicago Skyway in 2005 and has received a half-dozen bids for privatizing Midway Airport. The Indiana Toll Road was leased in 2006 for $3.8 billion. A private company built and runs the Dulles Toll Road in Northern Virginia, and the Texas Legislature has imposed a two-year moratorium on a planned network of private toll roads out of concern that the deals were too lucrative for the operators. A private operator, the thinking goes, can raise tolls with an abandon that would give politicians the willies, and investment banks are salivating at the prospect of jumping in. The criticism has mounted, though. “Deferred maintenance will become a big part of creating profits for shareholders,” Allen Zimmerman, a resident of South Whitehall Township, Pennsylvania, warned about leasing the turnpike, in a letter to The Morning Call of Allentown, Pennsylvania. Economists worry that a private operator might milk the drivers along the popular routes while ignoring the boondocks. By the GAO’s lights, the value of any given deal depends on the particulars, such as the quality of the management, the assurances of proper maintenance, and the uses to which a state will put the newfound revenues. Indiana is spending its bump in revenue on a 10-year transportation plan; Chicago, on the other hand, has pointedly refrained from any allocation. Pennsylvania officials have vowed to spend their windfall on transportation but have been “evasive,” the ATA’s Lynch said, about specifics.

At least so far, the greatest hindrance to an influx of private capital for the nation’s infrastructure, according to Rudolph Penner of the Urban Institute, is the paucity of investment opportunities. He also lacks faith in the other ideas being pitched on Capitol Hill that seek to lure capital while dodging the costs — notably, proposals to establish