Highway Public-Private Partnerships: Securing Potential Benefits and Protecting the Public Interest Could Result from More Rigorous Up-front Analysis Page: 3 of 17
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July 24, 2008
Mr. Chairman and Members of the Subcommittee:
We appreciate the opportunity to testify on public-private partnerships and
their role in the surface transportation system. As you know, America's
transportation system is the essential element that facilitates the
movement of both people and freight within the country. Nevertheless, the
current federal approach to addressing the nation's surface transportation
problems is not working well. Despite large increases in expenditures in
real terms for transportation, the investment has not commensurately
improved the performance of the nation's surface transportation system,
as congestion continues to grow and looming problems from the
anticipated growth in travel demand are not being adequately addressed.
We have called for a fundamental reexamination of our surface
transportation policies, including creating well-defined goals based on
identified areas of national interest, incorporating performance and
accountability into funding decisions, and more clearly defining the role of
the federal government as well as the roles of state and local governments,
regional entities, and the private sector.
The private sector has long been involved in surface transportation as
contractors in the design and construction of highways. In recent years,
the private sector has become increasingly involved in assuming other
responsibilities including planning, designing, and financing. Under some
of these arrangements, the private sector is being looked to not only to
construct facilities, but also to finance, maintain, and operate facilities
under long-term concession agreements-up to 99 years in one case. In
some cases, this involves financing and constructing a new facility and
then operating and maintaining it over a specified period of time. In other
cases, this involves operating and maintaining an existing toll road for a
period of time in exchange for an up-front payment provided to the public
sector and the right to collect tolls over the term of the agreement.
We recently issued a report on public-private partnerships in the highway
sector. For this hearing, you asked us to discuss this report-in particular,
the financing and tax issues it raised. My remarks today are based on this
February 2008 report' and focus on (1) the benefits, costs, and trade-offs
'GAO, Highway Public-Private Partnerships: More Rigorous Up-front Analysis Could
Better Secure Potential Benefits and Protect the Public Interest, GAO-08-44 (Washington,
D.C.: Feb. 8, 2008).GAO-08-1052T
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United States. Government Accountability Office. Highway Public-Private Partnerships: Securing Potential Benefits and Protecting the Public Interest Could Result from More Rigorous Up-front Analysis, text, July 24, 2008; Washington D.C.. (https://digital.library.unt.edu/ark:/67531/metadc294647/m1/3/: accessed March 19, 2024), University of North Texas Libraries, UNT Digital Library, https://digital.library.unt.edu; crediting UNT Libraries Government Documents Department.