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 The United Stateshas fallen behindmuch of the

developed world inimplementing a railsystem that is fast,reliable and safe, whichis why the demand forhigh-speed rail supportin this country is sohigh.

The residents of California are familiar

 with freeway congestionin our state’s north-south corridors. We canall agree there would beimmediate benefitsfrom the Californiahigh-speed rail project

 with the advancement

of a San Francisco to

 Anaheim corridor

through Merced and

Fresno counties.

Thousands of full-

time jobs will be creat-

ed. California will

continue to progress as

a leader in sustainabili-

ty as high-speed rail will

reduce oil consump-tion, greenhouse gas

emissions, road conges-

tion and dependence

on cars. California’s

new rail corridors will

spur economic growthand new businessdevelopment in theregion. Local politiciansand community activ-ists are fighting forhigh-speed rail stops intheir cities and townsbecause they realizethat having access to a21st century transporta-tion option means thatbusinesses will be ableto compete better in theglobal economy.

There has been a lotof concern as to who

 will pay for this $43billion project, andrightfully so. Govern-ment officials on boththe local and federallevels are concernedthat taxpayers will bearthe burden of costoverruns. However,there is another optionfor the state to consid-er. It’s called a PublicPrivate Partnership.P3s, as they are knownaround the world,essentially allow theprivate sector to helpfund, build, own and

maintain large-scaleinfrastructure projectssuch as high-speed rail,tunnels or turnpikes.

The concept, similarto how utilities dobusiness in the U.S., has

been popular for at

least 20 years in Europe.

The Swedes have used

P3s to fund wind

projects. In the UK, they 

have been employed to

build 800 projects since

1992, including power

plants. In Poland, they 

are building a public

hospital. Now, otherparts of the world are

embracing P3 opportu-

nities. In Chile, which

has a strong economy,instead of spending 

money on roads, thegovernment is investing in health care, withgreat success, andleaving transportationto the private sector,easing congestion,

improving safety andmodernizing travel.

The U.S. has been lateto embrace public-pri-vate partnershipsbecause we have long been told that it’s thegovernment’s job toprovide basic services,such as laying high-

 ways. But the railroads were built by privatecompanies. Our electric-ity, gas, telephone andtelevision are privatizedand regulated.

But what has been a

foreign concept is now taking hold in Florida,

 where two highway projects are under way;Texas, with two massiveroadway deals executedthis year; and Virginia,

 where private compa-nies are rebuilding theCapitol Beltway, as wellas the Midtown Tunnelbeneath the ElizabethRiver, connecting Portsmouth to Norfolk.

 All are P3 projects.Fundamentally, a P3

involves the procure-

ment of a public service(such as a high-speedrail project) by theprivate sector on along-term contractualbasis usually lasting 

anywhere from 20 to 50 years. In these types of projects the privatesector executes andmanages the finance,design, construction,tolling, traffic manage-

ment, operations,maintenance, safety,and sustainability efforts that delivercost-efficient assets togovernment withoutraising taxes. At the endof the contract period,the facility and manage-ment of it, is handedback to the publicsector at no cost.

By developing public-private partnerships,government providesincentives for quality 

 work and demands

accountability foroperations and mainte-nance.

Despite the promiseof economic growth,

  jobs and less govern-ment money, there is amisconception thatsomehow governmentsare “giving away” publicassets. That is not thecase. Through a perfor-mance-based contract,P3 projects remainmostly controlled by thegovernment, which can

fine or fire a developerthroughout the contractif it fails to perform.

Private firms haveevery incentive to build

SEEMONEY, PAGE 12

A lot of confusion exists about how a project like California’s

high-speed rail will be funded. The reality is public-private

partnerships are essential to a healthy system.

Benefits aside, high-speed rail is an expensiveendeavor. The California High Speed Rail

 Authority puts the cost of its project at $43billion, though others put the number higher.

The question becomes: How does it get built? Someof the money has already been allotted — both onthe state and federal level. Close to $10 billion wasapproved by voters in 2008 via Prop 1A. The rest willcome from public-private partnerships — privatecompanies investing money with the hope of futurepayoffs. Interested companies from China and Japanhave already sent delegates to Fresno.

MYTH: Any funding California receivesfor high-speed rail

should instead bespent on Highway 99improvements.

 TRUTH: The Califor-nia High-Speed Rail

 Authority has re-ceived billions of dollars in funding from the federalgovernment specifi-cally granted forCalifornia’s high-speed rail project.Because of the way these funds havebeen designatedtoward high-speedrail, the federal, state

and local govern-ments cannot takethis money andspend it on Highway 99.

Likewise, Proposi-tion 1A, the Safe,Reliable High-SpeedPassenger TrainBond Act, approvedby voters in 2008,provides for $9.95billion in bonds to beissued to establishthe high-speed trainservice. In thisinstance, too, it

 would be illegal to

spend the money onanything other thanthe high-speed railsystem.

MYTH: Taxpayers will have to complete-

ly subsidize thehigh-speed trainsystem.

 TRUTH: CHSRA’seconomic model for

its high-speed trainsystem has, from theonset, always calledfor a public-privatepartnership tofinance systemconstruction andoperations. The goalis to attract local,state, federal andprivate funding, withprivate funderstaking on the lion’sshare of the invest-ment. High-speedtrain systems arebuilt and operated

 worldwide under thismodel. These financ-

ing experts andinterests are outthere, including high-speed trainoperators in France,Germany, Spain,China, Japan, Koreaand more. They’vebeen visiting Fresnoover the past severalmonths to see how they can participatefinancially in thishistorical project.

 With an 18.4%unemployment ratein Fresno County, thenext six months willdetermine whether

this investmentpartnership willcome together. Whenit does, much needed

 jobs will come to ourcounty.

 

Public-private partnerships essential 

P3s, as they are called, offer the potential

to stretch government dollars with private

capital as a way around lack of funding for

large-scale public projects.by Michael Colbelli, Skanska USA

By developing

public-private

partnerships,

 government

provides

incentives for

quality work and

demands

accountability for

operations andmaintenance.

— Michael Cobelli 

A CUSTOM PUBLICATION OF THE FRESNO BEE SATURDAY, JUNE 18, 2011 11