New York Gov. Paterson Creates Panel To Study Potential P3s for State Assets

New York will study the potential privatization of state assets through long-term leases, Gov. David Paterson announced yesterday. Public-private partnerships could allow the state to leverage its assets to make investments in long-term infrastructure projects, the governor's office said.

"Public-private partnerships are not the only answer, but we need to honestly assess whether they can be part of the solution," Paterson said in a press release.

The 11-member New York State Commission on State Asset Maximization will create a preliminary report within 90 days and a final report within 180 days.

"We have places where we need to make improvements within our existing infrastructure and facilities such as the Thruway or new investment such as the bus rapid transit or eventual commuter rail on the Tappan Zee bridge," Tim Gilchrist, deputy secretary for economic development and infrastructure, said in a conference call with reporters. "There's a lot of ideas out there. There's a lot of models from throughout world and the country."

The commission will include appointees recommended by the leadership of Legislature, the state comptroller's office, the attorney general's office, and a representative of organized labor. Charlotte Hitchcock, deputy secretary for labor and financial regulation will chair the commission and Samara Barend, a vice president for the engineering and architectural firm STV Inc., will serve as executive director.

The commission does not intend to hire a financial adviser, though the state has already hired N.M. Rothschild & Sons to advise it on the potential leasing of the lottery. The state division of transportation has been finalizing details of a contract with Merrill Lynch & Co. to advise it on financing the $16 billion Tappan Zee bridge project.

The commission, which is expected to be created by executive order tomorrow, was greeted with skepticism by Assemblyman Richard Brodsky, D-Westchester.

"I'm not against examining any idea, but no one has ever been able to articulate a reason that privatization will be beneficial to anyone besides Wall Street," Brodsky said in an e-mail.

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