Going Private: New Public Infrastructure Advisory Commission Explores Public-Private Partnerships
Commissioners met for the first time in Los Angeles to begin their work implementing innovative transportation partnerships.
On Wednesday morning, July 29, the California Science Center in Los Angeles was teeming with hundreds of excited kids exploring the world of science. Meanwhile, in a meeting room just off the main lobby of the museum, about 100 people had gathered for an exploration of a different sort: how to create effective public-private partnerships to address California’s vast transportation infrastructure needs.
The event, chaired by Secretary of Business, Transportation and Housing Dale Bonner, was the first meeting of the newly created Public Infrastructure Advisory Commission (PIAC). The commission – the first of its kind in the nation – was formed on February 29, 2009, when Governor Arnold Schwarzenegger signed legislation authorizing public-private partnerships, also known as P3s.
“This is a great opportunity to put the full degree of ingenuity and innovative spirit of California on display and to figure out how to do a very complicated thing in a way that’s good for the public,” Bonner said in welcoming attendees. “There are a lot of eyes watching around the world to see if we’re really going to open a market here. I think if we can do it here, there will be many other states that follow suit.”
The open meeting was attended by about 70 members of the public and 18 of PIAC’s 23 commissioners, who were drawn from the most senior levels of academia, industry and government to help identify the best opportunities and methods for partnering with the private sector.
During the meeting, Bonner outlined PIAC’s mission, organization and operation, and solicited input from commissioners on the framework he presented. The group is charged with creating a clearinghouse of P3 information, identifying eligible projects, providing procurement-related services, and reviewing agreements before work begins.
Eligible projects include highways, public streets, rail and related facilities. Caltrans and regional transportation agencies will carry out approved projects in conjunction with private partners. The commission has a list of about 10 projects under consideration for possible P3 execution. At the top of the list are replacement of the Gerald Desmond Bridge, which would allow larger container ships to enter the Port of Long Beach, and reconstruction of Doyle Drive south of the Golden Gate Bridge in San Francisco.
“What I’m trying to do is develop a category or class of very high-value, high-impact projects,” said Bonner. “There’s no shortage of catalogue transportation needs, but we’re trying to bring forward some of those that can be viewed as top-tier, marquee projects that should be done but might not be done were it not for P3.”
Before any projects are approved for P3 treatment, the commission has a number of important questions to answer: What criteria will it use to select projects? How will risk be managed to attract private capital? How will success be defined? How can the commission garner public support for P3 projects?
Although the answers are not yet clear, there’s one issue meeting attendees seemed to agree on: the importance of generating an early success.
“Your first project must be selected with the criteria that it be a total, absolute success,” said Commissioner Antonio Vives. “You have one chance to get it right. If the first one blows up, I don’t think there’s going to be a second.”
Some view the success of PIAC as vital to California’s future. “Transportation is economic infrastructure. It’s critical to our social and economic well being,” said Bonner. “That’s what we’re really talking about – how we’re going to make investments that will improve the quality of life for the people of California and help the state maintain its global competitiveness.”
The commission will hold its second meeting this month in San Francisco, during which it may decide on its first P3 project.