by James A. Bacon
Among key initiatives in the transportation package that Governor Terry McAuliffe announced yesterday are important proposals to reform the governance of the Commonwealth Transportation Board (CTB) and the Public-Private Partnerships (P3s) process.
CTB autonomy. The bipartisan legislative package, worked out with senior Republicans in the General Assembly, would improve oversight of transportation spending by creating a more independent CTB, specifically by establishing that the Governor cannot terminate a CTB board member without cause.
The measure responds to perceived abuses of the McDonnell administration in which former Secretary of Transportation Sean Connaughton dominated CTB proceedings. Among other actions, he demanded the resignation of CTB member, James Rich, one of the few board members who openly questioned administration priorities. After CTB approval of questionable mega-projects like the Charlottesville Bypass and the U.S. 460 Connector with little debate, I asked two years ago in “Kings of the Road?” if the CTB was a rubber-stamp board. At the time, board member Aubrey Layne argued against such a characterization. After becoming Transportation Secretary under McAuliffe, Layne’s perspective changed. He pulled the project on the Charlottesville Bypass project and radically modified U.S. 460.
The legislative proposal indicates that the McAuliffe administration is willing to tolerate more open discussion and independent judgment in the CTB in order to head off other potential fiascos.
P3 governance. Changes to the P3 process are aimed at preventing a recurrence of the U.S. 460 debacle, in which the state spent $300 million on an upgrade to U.S. 460 between Petersburg and Suffolk without acquiring needed wetlands permits from the U.S. Army Corps of Engineers.
“The P3 program works for the right projects, such as the I-95 and I-495 Express Lanes in Northern Virginia where the private sector put their money and resources on the table in expectation of getting a reasonable return on their investment,” McAuliffe said in a prepared statement. “The P3 program was the wrong procurement tool to deliver the U.S. 460 project in southeastern Virginia, which cost taxpayers $300 million with nothing to show for it. To prevent this from occurring again, Delegate [Chris] Jones has played a significant role in reforming this process so it is transparent, the risk to taxpayers is minimized and clear lines of accountability are set.”
Specifically:
- Private partners must disclose risk that is transferred to the commonwealth. The intent is to minimize risk for taxpayers by selecting projects in which the private sector is willing to make the appropriate investment in expectation of getting a reasonable return.
- The transportation secretary will be accountable by signing a finding of public interest before a P3 deal is finalized, certifying that the risk transfer and all other findings are still valid. This would prevent situations like the U.S. 460 P3 deal, where procurement changed over the course of the project, yet no one was held accountable.
Bacon’s bottom line:
It is heartening to see Republicans and Democrats cooperating to achieve governance reform in the transportation arena, in which billions of taxpayer dollars are spent. As I have argued repeatedly, there are inherent tensions in the P3 process between the public’s need for transparency, especially visibility in its exposure to risk, and the private party’s desire for confidentiality. These proposals seem to be a positive step. Whether they create sufficient transparency remains to be seen.
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