Trains For America

More choices for better transportation

TFA urges caution on California financing scheme

It looks  good on paper, but ….

Here is a bit of background from the Imperial Valley News on a  plan to find private dollars for public projects. It is not a completely bad idea.

PBI is not privatization, which means transferring an existing public service or facility to the private sector, but instead a way of introducing private management into public service in order to improve the value citizens get from their infrastructure. That value can take many forms, including lower upfront or all-in costs, better service, greater efficiency, faster delivery, full cost accounting or lower risk.
The Governor is calling on the state to pass legislation to:
  • Expand the types of projects, services and government entities that can enter into PBI arrangements.
  • Increase contracting flexibility so the state can better negotiate with potential contractors.
  • Establish “PBI California,” a center for excellence to help determine which projects can benefit from PBI, represent the state in negotiations with PBI participants, ensure transparency and monitor performance.
PBI has been widely used around the world for infrastructure projects in the United States, United Kingdom, France, Australia, Canada and elsewhere with great success.
In the United States, the federal government has used PBI to construct or rebuild over 150,000 military housing units, attracting up to $25 billion in private capital and resulting in faster delivery and higher customer satisfaction.
At the Little Rock Air Force Base, the use of private companies to build military housing has been worse than a boondoggle. Construction has come to a complete halt and taxpayers are out a ton. Our congressional delegation has been working on this and California would be smart to go VERY slowly.

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December 2007


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