P3s Not Answer for Every Infrastructure Project, Secretary Chao Says

Chris Kleponis/Bloomberg

WASHINGTON — Relying heavily on private dollars to help finance public infrastructure projects is not a system that suits every state, the nation’s top transportation officer told most of the country’s governors on Feb. 26.

“As we go forward, we do look forward to public-private partnerships,” said Secretary of Transportation Elaine Chao, adding, “That is not the answer for everything because there’s a cost to that. And there’s consumer lack of acceptance for toll roads, for example, in certain areas.”

“I think all of us have a responsibility to look at all of the pay-fors — and none are attractive — and find new innovative ways to supplement, augment that which is available,” Chao said in a meeting with governors at the National Governors Association’s winter meeting.

The secretary’s comments on the P3s funding structures comes as President Trump readies to detail a policy agenda before Congress on Feb. 28. Trump’s address is expected to include an infrastructure funding proposal. This month, the White House press secretary told reporters P3s would have a key role in the proposal.

Several governors and transportation leaders on Capitol Hill have recently pushed back on P3s. Lawmakers from rural districts have emphasized that P3s based on tolls for generating revenue lack the requisite traffic volume for achieving meaningful investment returns. Typically, private investors seek to associate their capital with projects in areas where traffic volume is high, such as cities.

The day after Trump’s address, the Senate Commerce Committee with jurisdiction over trucking policy will host transportation officials from rural states.

“It’s worth remembering that many Americans live far away from the highest-ticket projects their tax dollars are asked to fund,” Committee Chairman John Thune (R-S.D.) said, in a statement. “This hearing will look at how wise infrastructure investment decisions can ensure that all Americans benefit from improvements to national transportation and digital networks.”