Chuck Harrington, Parsons’ Chairman and CEO, pens op-ed on public-private-partnerships. Article below as published on The Washington Post website on September 29, 2017 and in the October 1, 2017, print edition.
Public-private partnerships are in danger because of the Purple Line legal challenge
By Charles L. “Chuck” Harrington
Charles L. “Chuck” Harrington is chairman and chief executive of Parsons, an engineering services firm.
Tomorrow’s economy is a digitally connected, globally competitive, rapidly evolving marketplace fueled by innovative solutions to today’s challenges. Collaboration is the engine of innovation, and there’s a tremendous need in the United States for more strategic partnerships — including those between the public and private sectors.
But an unfortunate potential roadblock to greater collaboration between the government and private businesses is looming in the U.S. Court of Appeals for the District of Columbia Circuit, threatening to deter progress in restoring America’s aging infrastructure and transit systems.
The American Society of Civil Engineers estimated this year that $4.6 trillion is needed to repair and upgrade U.S. infrastructure — before Hurricanes Harvey and Irma damaged countless roads, bridges, dams, water systems and other infrastructure in Texas, Louisiana, Florida and elsewhere. The ASCE report did not include Puerto Rico or the U.S. Virgin Islands, two U.S. territories that have been hit hard by Hurricane Maria and for which full damage estimates are not yet available.
The U.S. infrastructure challenge requires quintessential American innovation and willingness from the public and private sectors to work together to finance much-needed projects from coast to coast. In fact, public-private partnerships — or P3s — have proved to be a successful financing arrangement for numerous infrastructure projects in the United States and around the world.
But a potential game-changing setback has emerged in a federal court case involving the 16-mile Purple Line light-rail project in Maryland, which is one of the largest P3 transit projects in the country. Construction on the $2 billion project, of which $900 million is expected to come from federal funding, was halted in August 2016 when a U.S. district court judge said the Federal Transit Administration failed to consider declining ridership on the Washington region’s Metro rail system before it approved funding for the project.
The federal government and state of Maryland appealed the judge’s decision, saying there is no obligation under the National Environmental Policy Act — the statute under which Friends of the Capital Crescent Trail brought the case in 2014 — to consider ridership volume. The case is pending before the D.C. Circuit.
So despite the appellate court’s recent interim ruling upholding the Purple Line’s request for federal funds, as well as the project’s Aug. 28 groundbreaking, the ultimate outcome of the case — expected in October — could halt construction of the light-rail line. The court could ultimately shut down the Purple Line’s pursuit of federal funds, abruptly derailing a crucial infrastructure partnership.
The stakes in this case are enormous, given that the outcome could discourage other states from taking advantage of the P3 model when securing crucial financing for transit and infrastructure projects.
In an amicus brief to the court of appeals in August, the American Road & Transportation Builders Association warned that the case could set a bad precedent for other possible P3-financed projects. The trade association claimed the lower court’s ruling “injects new delay and litigation risks, thereby stifling the growth of this key financing mechanism to leverage and combine governmental and private dollars and responsibilities to meet the nation’s exigent transportation needs.”
Now is not the time to discourage the use of P3s for infrastructure projects. The financing mechanism provides a valuable tool for government officials to leverage private investments to finance, build and operate numerous publicly owned assets within their respective jurisdictions when public dollars are hard to come by.
P3s are now gaining traction. For example, a $2.3 billion Kentucky-Indiana project completed in December, which utilized a P3 arrangement to finance construction of a new bridge, opened ahead of schedule and under budget. As of August, there are eight other P3 highway projects under construction, ranging in value from $325 million to $2.32 billion, according to statistics from the Federal Highway Administration.
These projects are essential to ensuring the long-term viability of our roads and bridges, and it’s important to incentivize further strategic use of P3s as bridges buckle and roadways get more congested. Federal, state and local governments have become more open-minded about using alternative methods of doing business — but there’s far too much progress left to be made to be complacent.
It’s not enough to work harder and smarter and to employ more technology. As our world becomes increasingly digital and interconnected, we also need transformative financing mechanisms to help carry us into the future — not backward approaches in which we use narrow legal avenues to prevent projects designed for many but opposed by the few.
While in Maryland, the Friends of the Capital Crescent Trail is using the courts to preserve a “trail as a world-class linear park,” the consequences of the legal action would set a disturbing precedent. If the group is successful in court and public-private partnerships are derailed, our nation would have a harder time fixing our crumbling and insufficient infrastructure because we would be forced to limit our financial options.
Click here to view the article on The Washington Post website.