President Trump is proposing an ambitious and controversial building plan that would spend $1 trillion to rehabilitate America's infrastructure.
The controversy comes from intended public-private partnership plans (so-called P3's) of the type Indiana has been in the forefront of. As the proposal moves forward, notes the International Business Journal, “Indiana's experience with infrastructure privatization has become a political Rorschach test. (Vice President Mike) Pence and his allies are extolling Indiana's record of selling control of major roads to private firms as an ideal model, arguing that such public-private partnerships prompted corporations to invest money in Indiana infrastructure that taxpayers would otherwise have had to sponsor.”
That's all well and good, but it should also be acknowledged that Indiana's privatization plans have not always gone smoothly. Washington should learn from our mistakes as well as our successes.
Gov. Mitch Daniels' lease for the Indiana Toll Road, for example, put that byway in private hands for 75 years, which is a very long time. The $3.85 billion the state got upfront has already been spent, so now all we have to deal with are the problems. The consortium running the road keeps raising the tolls, which resulted in a 21 percent decline in traffic between 2006 and 2010.
And the privatization deal to build I-69 between Bloomington and Martinsville that Pence championed collapsed after months-long construction delays, allegations of financial mismanagement and a surge in traffic accidents. The company that was a key part of the deal has declared bankruptcy.
This is not to suggest P3 arrangements are a bad idea. They are an innovative way to get big projects done in a way that minimizes costs to the public. But they should get just as much scrutiny as government-only projects, perhaps even more since they will eventually be out of government control.
Governments need to pay attention to the companies they are doing business with, scrutinize proposed bids and contracts carefully (the lowest bid isn't always the best one, for example) and make sure the public knows exactly what is going on at all times. Indiana has violated every one of those guidelines.
Washington should work hard to avoid all those mistakes. And Pence should be candid with administration officials about how we made them here.