The PA House Transportation Committee held a public hearing last week on PennDOT’s P3 Major Bridge Tolling Proposal. George Mezey, APC executive committee member and vice president of Trumbull Corporation, joined Bob Latham, APC executive vice president, to submit testimony and answer questions regarding the proposal. During the hearing, Latham conveyed to members of the committee that APC’s Board of Directors voted to support the passage of Senate Bill 382 which would make several key reforms to the state’s Public Private Partnership Law. Latham said the bill would require PennDOT and other agencies to publish a detailed analysis prior to any action by the P3 board. Mezey provided the committee with expert information regarding how P3s should work to be successful and also outlined the potential risks that could lead to an unsuccessful project. Mezey emphasized that P3s are not “new money” and are simply a form of private borrowing that typically lead to significantly higher financing costs than under normal borrowing instruments. Most importantly, he showed the committee that the particular P3 financing model advanced by PennDOT carries a significant risk for the commonwealth since the structure leverages the state’s Motor License Fund in the event that toll revenues can’t meet the guaranteed availability payments to the developer.
APC is optimistic that the House Transportation Committee will consider Senate Bill 382 during the fall session in the weeks ahead.