By GLENN GILBERT
Of The Oakland Press
Should Michigan let private interests take over parts of its public highway and transportation systems?
That is the subject of House Bill 4961 pushed by Democrats in Lansing.
It should be of particular interest in Oakland County because transportation specialists are focusing on I-75 between Eight Mile and M-59 as one of the potential projects.
Rep. Marie Donigan, D-Royal Oak, refers to the concept in the bill as public-private partnerships, or P3s.
Donigan, a co-sponsor of the legislation and member of the House Transportation Committee that is reviewing it, says she supports the measure as a potential funding source for mass transit projects. Rep. Tim Melton, D-Auburn Hills, is also a co-sponsor.
Traditionally, private sector participation has been limited to separate planning, design or construction contracts on a fee-for-service basis based on the public agency’s specifications. HB 4961 opens up the possibility of a private entity also operating, maintaining, financing, leasing or owning the project, according to a legislative analysis of the proposal.
The legislation mirrors a recommendation from Michigan’s Transportation Funding Task Force, which issued its report a year ago.
The arrangement is usually thought of in connection with new projects, although it could also involve the transfer of an existing facility or highway.
While federal highways would not be eligible, the construction of an expansion involving the purchase of right-of-ways to allow an HOV (high-occupancy vehicle) lane on I-75 could qualify, said Mike Nystrom, vice president of the Michigan Infrastructure and Transportation Association, which supports HB 4961 and several other transportation initiatives.
Charging of tolls often is associated with P3s. For instance, drivers may have access to express or HOV lanes for which prices are linked to traffic congestion, as has been tried in Minnesota.
Brent Bair, managing director of the Road Commission for Oakland County, said the Michigan Department of Transportation needs the legislation “to build high occupancy/toll lanes on I-75 from Eight Mile to M-59. These would be an additional lane in each direction that could be used by carpools at no charge or by a lone driver paying a toll. The toll could vary by time of day (more during rush hour, etc.).
“MDOT thinks it is possible to get a private entity to finance the construction of the lanes and then manage the toll collection,” Bair said.
“RCOC has long supported the addition of lanes to I-75 to handle the congestion problems encountered from Eight Mile north. RCOC supports having P3 available as another tool for funding and managing roads in Michigan.”
Rep. Marty Knollenberg, a Troy Republican who is also on the House Transportation Committee, says he supports the P3 concept, “but I have some problems with the bill.”
Knollenberg says the bill gives too much control of the projects to MDOT. He said lawmakers had trouble getting MDOT to release a list of potential projects.
“My biggest concern is losing control,” Knollenberg said. “I don’t want MDOT to have total control.”
Knollenberg said he is concerned about allowing a foreign investor have a principal stake in a project, but Nystrom said “those who oppose this are limiting the opportunities.”
Knollenberg said he believes the Republican-controlled Senate shares his concern and there is no point in the Democratic-dominated House passing a bill the Senate will reject.
Meanwhile, the Ann Arbor-based Public Research Interest Group in Michigan is cautioning against adopting the legislation without proper safeguards.
“Road privatization is a growing issue in the United States as politicians and transportation officials grapple with budget shortfalls,” said PIRGIM advocate Kara Rumsey. “Though these privatization deals seem to offer state officials a quick fix, they often pose long-term threats to the public interest. By privatizing roadways, officials give significant control over regional transportation policy to individuals who are accountable to their shareholders rather than the public.”
Rumsey said the risks of a bad deal grow exponentially over time, making the possibility of extremely long contracts a particular concern.
“An analysis of the Chicago Skyway and Indiana Toll Road privatization deals found that private investors will likely recoup their investments in less than 20 years — even though the private operators will charge tolls for 99 and 75 years, respectively,” she said.
Rumsey said any legislation should: Allow the public to retain control over decisions about transportation planning and management; give the public fair value so future toll revenues are not sold off at a discount; ensure no deal lasts longer than 30 years; require state-of-the art maintenance and safety standards in contracts; ensure complete transparency for proper public vetting of privatization proposals; and stipulate that the legislature approve the terms of all final deals. Action on HB 4961 and other transportation measures is possible next year.
