Pennsylvania lawmakers are working on legislation that would enable public-private-partnerships to help finance transportation infrastructure needs throughout the state.

The measure would allow the state and its public entities to enter into P3s with developers to design, build, and maintain new infrastructure and facilities and to also lease existing transportation structures through long-term concession agreements, said Sen. John Rafferty, R-Chester, sponsor of SB 344.

Officials are looking for ways to boost financing for roads, bridges, mass transit, and rail over the long term. A state Transportation Advisory Committee report last year stated that Pennsylvania needs to spend an additional $3.5 billion per year on infrastructure just to keep existing structures in a state of good repair.

The P3 initiative would not help the state address an immediate $472.5 million transportation funding shortfall for the current fiscal year. That deficit opened up after the federal government denied Pennsylvania’s proposal to begin tolling Interstate 80.

“This is a way to infuse some capital dollars into our infrastructure through the private sector yet still maintain an ownership right and oversight of operations on those facilities,” Rafferty said. “And the proceeds of these P3 agreements would be able to expand our infrastructure — not just resurface — but expand highways, expand intersections, expand our rail lines. That’s how economic development is going to occur.”

Rafferty’s bill would establish a public-private transportation account where net proceeds of P3 projects would flow into the fund. Those funds would then be used to help finance transportation needs throughout the commonwealth.

The state and government entities could gain P3 revenue from up-front payments to operate existing structures or from a percentage of potential user fees or tolls a private operator might implement on a new transportation development.

For instance, if a private company were to construct and maintain high-occupancy lanes or rapid lanes on a roadway and charge vehicles for their use, the state or a public entity could gain a portion of that new revenue, Rafferty said.

The senator does not believe that a concession agreement on the 530-mile Pennsylvania Turnpike is an option.

“The Turnpike is not really in play here because the Pennsylvania Turnpike Commission would have to approve it and I don’t think that would happen,” Rafferty said. “But certainly any other government entities could enter into a P3 agreement.”

The measure would form a Public-Private Transportation Partnership Board that would evaluate and approve all P3 proposals. The board would consist of cabinet members and legislative appointees.

SB 344 passed the Transportation Committee — which is chaired by Rafferty — last week by unanimous vote. It will head next to the Appropriation Committee. A similar bill sits in the House Transportation Committee. Rafferty said he will meet with the administration this week to discuss the P3 initiative.

Republicans control both legislative chambers. Gov. Tom Corbett, who took office last month, is a Republican.

Subscribe Now

Independent and authoritative analysis and perspective for the bond buying industry.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.