Public-private partnerships focus on most-needed infrastructure, unlike pork that is baked into government spending

Recently, Thomas Frank of the Wall Street Journal manages to get just about everything wrong in his column attacking public-private partnership toll roads.

First, he writes as if this phenomenon is solely about leasing existing tollways, such as the Indiana Toll Road, the Kansas Turnpike Authority, and the Chicago Skyway (all great political as well as economic successes, by the way), when by far the larger potential is in providing much-needed new capacity such as the $1.3 billion SH 130 toll road in Texas and the $1.4 billion HOT lanes being added to the gridlocked Capital Beltway outside Washington, DC.

Second, he assumes that today's credit market crunch means such projects will be "melting away," when $180 billion of equity capital has been assembled in infrastructure investment funds, and good projects continue to be financed, both here and overseas.

Third, he ignores the degree to which pork is "baked in" to the current federal highway and transit funding formulas, in contrast with the stringent return-on-investment filter through which public-private partnership toll projects must pass in order to get financed.

Fourth, he seems unaware that everyone involved appreciates that unlimited toll rates might divert too much traffic to non-tolled roads, which is why nearly all long-term lease agreements control either the toll rates or the allowable return on investment.

In short, Frank's piece is an ideological attack on what has become a mainstream, bipartisan practice not only in late-adopter America, but in most of Europe, Australia, Canada, Chile, Brazil, and more recently China and India. Now, public-private partnerships are being turned over to government only and we all know how efficient and economical that is!