Gabriel Roth writes "Most of us can walk as much as we want to." In fact, this is not the case, many people would love their children to walk to school but find that the way is too dangerous with inadequate sidewalks and little protection from cars. I hear from people across America who tell me they would like to make more trips by foot or by bike for short distances but find the roads just too unsafe.

He also implies that it is cheaper to live in Texas where there hasn't been any smart growth than in Maryland where there has been. This depends on what you call "living." The relevant measure is what does housing plus transportation together cost in any given area.

Using the Center for Neighborhood Technology Housing+Transportation Affordability Index one can choose specific census tracts and see the percent of median income for that specific area that does towards housing alone, or housing plus transportation. In both Maryland and in Texas, it is clear that it is always cheaper (housing PLUS transportation) to live in denser urban areas where smart growth metrics are in place than in sprawled areas that are auto-dependent.

The business of infrastructure management is, and needs to be, shared between both the public and private sector. Neither the government nor private operators have monopoly on all the good (or bad) ideas. While some may argue that all infrastructure should be owned and managed by just one of these sides, what we should be arguing for is using all methods and means available to make across the board condition improvements to protect the public’s health, safety and welfare. ASCE’s most recent Report Card for America’s Infrastructure graded all categories, including those traditionally operated by private interests, with low grades. So the question shouldn’t be “who can do it better”, but “why can’t we all do better”?

In the spirit of this week’s question, each side needs to take a hard look across the table AND in the mirror to figure out what works well and what doesn’t. Then they need to compare notes and share strategies. For example, for major capital improvement projects, private infrastructure owners, as well as many states, use a capital budget to amortize the cost of the project over multiple years. ASCE has long advocated for giving the federal government this budgeting method. Similarly, while private owners are generally responsive to the needs of users, they should conduct business where feasible in as transparent a manner as public owners must. And as always, leadership and innovation should be encouraged in both sectors; finger-pointing and adherence to ideology won’t get the job done.

There is always a better or more efficient way to do something, and both public and private owners of infrastructure should be striving to find it through a regular exchange of ideas.

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 Governor Glendening is right. The public and private sectors do indeed have “dramatically different goals and priorities”.

The private sector seeks to provide services at a profit. So it has to provide what customers wish to pay for. Is that bad?

But what does the public sector seek? Glendening mentions “reducing vehicle miles traveled and … focusing on transportation to increase walkability, housing affordability and economic prosperity”.

Most of us can walk as much as we want to, without help from government. As for “housing affordability”, there is plenty of evidence that “Smart Growth” policies increase, rather than decrease, accommodation costs. Housing is cheaper in Texas than in Maryland.

As for economic prosperity, there is worldwide evidence that travel increases prosperity by increasing opportunities for employment, trade and leisure activities. Reducing travel is thus likely to reduce economic prosperity and, for that reason alone, does not seem to be a worthy government objective.

It is clearly true that both the public and private sectors can learn from one another about financing, building, operating and maintaining our infrastructure. In the tight fiscal times facing the nation today, there are increasing suggestions that the private sector ought to have a far greater role in owning and/or operating infrastructure.


The real question, however, is not who learns what from whom, but whether we should we travel much further down this track. The private sector’s bottom line and driving force is profit---an understandable and valid goal. Unfortunately, the public sector has many national and community goals that are reduced or totally lost in the pursuit of profit.

These goals are often lessened or lost entirely in the push for profit. A good example is the railroads. Many lines were “sold” to the private sector years ago in the name of better management and cost effectiveness. Public purpose today seeks more transit opportunities. The railroad holding companies seek to maximize profits, which equates to freight as opposed to people. As governor, I was in constant battle with the freight haulers to open the transit “window.”.

The Obama Administration has correctly set goals of reducing vehicle miles traveled and, reducing carbon emissions while, increasing housing affordability---all through wise transportation decisions. These are not priorities that reconcile well with private sector owned infrastructure.

For local governments, the desire to create a sense of place by focusing on transportation to increase walkability, housing affordability and economic prosperity for under-served communities is often inconsistent with maximizing profits.

Yes, the public and private sectors can learn from each other. Let us not forget, however, there are dramatically different goals and priorities for each.

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 Robin Chase raises important issues, but would find it difficult to show that the public sector has an advantage in promoting competition. Not only does the Washington Metro, for example, prohibit competition from outsiders, it actually closed down some of its own popular bus services to force travelers to use less convenient rail services.

And the reason that Comcast can restrict the use of its services is because the public sector gave it a monopoly.

Nor is she right to assert that private providers are interested only in profit. Many of the hundreds of toll roads provided by the private sector in the US and UK in the 19th century were barely profitable, or not at all. They were provided by local people wishing to improve their neighbourhoods.

Robin is however right that both private and public agencies can provide “high quality, well-maintained infrastructure”. The drawback of public sector provision is not the inability to launch splendid services, but the inability to close them down when customers are no longer prepared to pay for them.

But that is a lesson that the public sector is unlikely to learn until politicians cease to enjoy giving away other people’s money.

The ability to maximize the public benefit by requiring openness and flexibility could be a key differentiator between public and private infrastructure if the government took advantage of it. I am unmoved by the claims that the private sector alone can provide a high quality, well-maintained infrastructure. Both public and private institutions can accomplish that. But the willingness and ability to maximize public benefit and participation lies in the public domain alone.

The private sector’s goal is to maximize profit and give you exactly what you’ve agreed to pay for. Contractual relationships are constructed to provide a particular prescribed service and precisely nothing more. Consider our wireline and wireless infrastructure. I pay Comcast every month for broadband access. My contract says that I can’t leave my router open and let any of my neighbors get Internet access. Why not? I paid for the service and I perceive there is excess capacity that I’m willing to share. Similarly, we know that many features on cellphone devices (paid for and now owned by me, the consumer) have features disabled to prevent me from using it to its capacity. Infrastructure use extensions, even in cases where such use would result in no additional costs, are prohibited since they represent a loss of potential revenue. 

Wherever and whenever possible, the private sector infrastructure contractually prevents a user’s ability to adapt the infrastructure for future use in novel and unexpected ways. Chicago’s privatization of its downtown onstreet parking and the Skyway for 75 and 99 year leases, have restricted that city from changing road use to other purposes the public might see fit to do some time in the future. For example, several lanes of traffic could not be converted to HOV, bus only, or fixed rail, nor could streets be closed or bike lanes introduced in a manner that will result in fewer parking spaces, despite some future perceived public benefits.

Thoughtful public infrastructure should seek to maximize (safe) use, encouraging the public to take advantage of such infrastructure in novel and unexpected ways. And where possible, this infrastructure should able to adapt quickly to changing circumstances that benefit the public’s need. Sidewalks and curb cuts were not designed with rolling suitcases in mind, yet this novel use is welcome and allowable.

Government’s technology infrastructure investments, in transportation, electric grid, health care, education, and emergency response among other uses, is an area in which requiring and demanding open, non proprietary networks, devices, and standards will serve the public enormously well. This, in contrast to the closed proprietary systems that are often seen to be in the best interests of private sector providers of the same services. You can read more about the benefits of openness, downsides of road privatization, and the negative implications of Chicago’s privatization of its parking.

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As one who has served in both public and private sectors, I believe there is much each can learn from the other.

Public officials must better appreciate the value of time in terms of prompt payment ( delay in payment is a real cost to the vendor), and in terms of prompt project completion. Often the official gives greater weight to the interests of the Agency over the welfare of the public. A case in point, shifting road construction to night hours costs the agency more but this is outweighed by the benefit to the motoring public.

The private sector operates with a separate capital budget and operating budget but the federal government operates with a single budget treating all kinds of expenditures the same. This works to the great detriment of capital intensive programs. Creation of an infrastructure bank may alleviate the problem somewhat.

Public officials enjoy the thrill of serving the public and providing essential services to society. They are talented and dedicated and often underappreciated by private folks. There are inherent difficulties working for a public agency- operating in a fishbowl, legislative reluctance to support incentive compensation for public employees and inability to hire and fire at will although that is fast becoming scarce even in the private sector.

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Today much of our transportation infrastructure is owned by state and local governments, but some is privately owned and operated. In general, large airports are owned by local or regional governments, transit lines are owned by cities or local government bodies, roads are owned by states or local governments, and so are many ports. By contrast, most rail tracks are owned by private companies, as are most pipelines. (Of course, there are exceptions in both directions. There are privately-operated marine terminals and some private toll roads, for example, and conversely there are some publicly-owned rail tracks.) In addition, outside of transportation, other infrastructure networks with some similar economic characteristics are frequently privately owned and operated, such as electricity transmission systems and telecommunications systems.

The current status quo in transportation has resulted from historical evolution, from legal and regulatory requirements (including federal legislation), and from other impediments to the private sector’s ability to participate.

Consider roads: the earliest major roads were privately-built turnpikes, starting around 1792 in Pennsylvania. Private turnpike companies constructed toll roads, and that was often how new roads were developed. But over time, competition from other modes, government participation in rate-setting, changing population patterns, and the need for better rural roads for automobiles led to calls for a new federal role, beginning with the Federal-aid Highway Act of 1916, and the first federal fuel tax (one cent per gallon) in 1932.

Likewise, airports were largely privately-owned until World War II, but thereafter federal law actually came to preclude private ownership. And transit lines often began as private companies, and were later taken over by municipalities during the middle part of the last century. For example, the New York City subway system that today is by far the largest public transit system in the United States was largely privately designed, financed, and operated at its outset.

Presently, there is renewed interest in private sector participation in transportation infrastructure, such as roads, ports, and airports. As has regularly been chronicled by National Journal’s online experts, the new arrangements often take the form of partnerships between the public and private sector in which various project risks are transferred from the public to the private sector in order to reduce taxpayer exposure to these risks and introduce market incentives to businesses that have often functioned as exclusive government monopolies. While much of the recent U.S. interest relates to public funding scarcity, many of the most important benefits of private sector participation are expected to come from the potential for increased efficiency in the operation and use of the infrastructure.

If one thinks about privately-operated rail lines and pipelines, and publicly-operated airports, one thing they have in common is a need for in-route traffic control, such as the dispatch centers for rail and pipelines, and the FAA’s air traffic control for aviation. Which is more costly and which is more cost-effective? What makes them so?

If one thinks about the need for expanded traffic capacity in rail and roads, for example, which system is better set to identify such needs promptly? And which is more likely to base increased investment on rigorous measures of the benefits to accrue from doing so? (And which is more susceptible to political pressure and earmarking?) It is reasonable to ask whether measures like those used to assess new capital investment in rail and pipelines might be applied to roads and transit, for example.

In 1994, President Clinton replaced Executive Order 12803 with a new Executive Order 12893 titled “Principles for Federal Infrastructure Investment”, which applies to transportation infrastructure. President Bush and President Obama retained that order, which expressly calls for agencies to “seek private sector participation in infrastructure investment and management”. But where it is determined that the public sector is preferred as the owner or operator, EO 12893 focuses on “efficient management”, encouraging structures and tools to improve efficiency and net benefits. So one of the key issues for publicly-owned transportation infrastructure is to identify ways for the system to be utilized efficiently and for expansions to be the optimal use of available resources.

These considerations deserve an increased focus both by policy makers and those who operate our publicly-owned transportation systems.

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