All their disads are non-unique – a Privatization’s inevitable internationally

I am not claiming that there aren't improvements to be made by the TSA when it comes to hiring, staffing, and the training of screeners. Understaffing at security checkpoints is noticed at many airports, including one in my own district at Midway. TSA has been urged to uphold a sufficient staffing level at all airports. Unfortunately, this goal so far has not been reached. From what I understand of the preliminary data of the GAO audit on the private screening contractors, it states, "The flexibility that TSA has given private screening contractors in implementing airport specific practices has enabled them to achieve some efficiencies." I understand that the TSA is looking to granting similar freedoms and flexibilities to federal security directors at federal airports. And, therefore, those airports could also have significant efficiency improvement. Again, I reiterate that the congressional intent behind the TSA was establishing a uniform level of security. Therefore, I do not believe that the PP5 airports should be granted more flexibility than federal airports.

So, whether an airport opts out or in the system, it is imperative that the federal government continue to set uniform security standards for that system, provide strong federal oversight, provide a federal screening workforce where needed, and provide the investment dollars needed to make sure that they can accomplish these goals.

Private screening contractors at four of the six SPP airports we visited stated that they believed that unnecessary redundancies exist between supervisory TSA and contract screening personnel. For example, contractor officials at one airport said that TSA’s screening managers perform the same responsibilities as the contractor’s supervisors. No TSA personnel were assigned at the remaining two SPP airports that we visited.

Why hasn’t privatization caught on? Private companies balked in 2004 because Congress did not grant them a waiver from liability. I honestly don’t know where that issue stands today. It troubles me that companies like Lockheed Martin, who conduct the recertification testing of TSOs, are part of the consortium. Aviation screening policy was dictated by the FAA before 9/11. If screening is privatized it will only the staffing, the uniforms will remain the same, and the policies will be managed by TSA managers. Private companies will have no say in policy, period. So the agency could be downsized into simply an oversight agency but I still think it is an unpredictable landscape for firms and opting-out won’t happen. Kansas City was one of the five airports that remained private as part of a pilot program. Those screeners as private employees had collective bargaining rights. When they voted to unionize, the airport threatened to go federal.

Hawley goes on to explain how we arrived at such a sorry state of affairs, a crisis bred fear. Fear bred a knee-jerk demand for safety, but there was nothing in place to accomplish the security sought. So the government largely made it up, doing what seemed like a good idea at the moment. Today, we attribute the birth and growth of TSA screening methods to venal motives. According to Hawley, it was just plain, old stupidity. They had a problem and no real clue how to solve it. So they just made stuff up that seemed, to a bunch of people who had no real clue, like it ought to work. The procedures then became part of the bureaucratic myth, the internal inertia that once done cannot be undone. It became what they do, and they did it, and we suffered for it. Most fascinating is that the concern wasn’t to seek the input and methodology of security experts, but rather management consultants to speed up the lines. Rather than ask the question, why are we doing this, the primary focus was how can we make people hate us less.

Even if the deal had gone forward, Emanuel would have had to persuade a wary City Council to go along with it. Aldermen were stung by public criticism for approving Mayor Richard Daley's roundly reviled 75-year lease of the city's parking meters in 2008, and have pledged to be more than rubber stamps for Emanuel's plans to lease public assets. Emanuel has shown the ability to get other controversial revenue-raising packages past the City Council, however. Daley thought he had a deal to lease the Southwest Side airport for 99 years to a consortium led by a unit of Citigroup Inc., an agreement that would have brought in $2.5 billion. The plan died in 2009 when the financial markets froze. After taking office, Emanuel refused to commit to another deal to privatize Midway but petitioned the FAA to maintain the privatization slot for the airport to keep his options open.

In the US, a market offering more promising rewards than Western Europe, progress in introducing PPPs to the transport sector has seen only mixed success of late. Here, rather than financing or rewards, the obstacles are political and popular opposition to private operation of infrastructure. A prime example is the failure of the Midway Airport privatisation in September 2013. The project fell through due to unappealing terms as the Mayor tried to appease taxpayers, and failed to appeal to private companies ( see, 'Midway Grounded As Politicians Struggle To Find Middle Ground', September 17 2013). Despite this, our core view has been, and remains that we will see growing employment of the PPP model in the US, especially in highway projects. Investor interest is high, and financing, through various government funding programmes and a number of investment vehicles, is available. Indeed, in September 2013, Cintra and Meridiam Infrastructure closed financing on a concession to extend the North Tarrant Express in Texas.

Privatized airports (within and outside the APPP) also may not be entitled to local and state property tax exemptions, unless specifically authorized, and would likely not be exempt from tort liability claims. In the Midway airport example, City officials had to negotiate with state lawmakers to maintain Midway’s property tax-exempt status and the state enabling legislation required the city to dedicate 90% of lease proceeds to fund capital infrastructure and maintenance or to fund municipal employee pension funds. According to the recent ACRP report on airport privatizations, with reduced protections for tort liability claims, privatization (within and outside the APPP) may create greater tort liability risk for a private operator than a public operator in the event of, for example, an aircraft accident, since the private operator would not likely be entitled to same immunities as a public entity.58

Apart from that, there are also many barriers to airport privatization in the U.S., from access to cheap tax-exempt debt to restrictions on revenue diversion to collective bargaining agreements and public sector unions, says Ernico. This makes the U.S. airport model unique. When considering airport privatization, Ernico says there are many resources airports should evaluate, including: Lessons learned from worldwide airport privatization; Lessons learned from privatization in non-airport transportation modes; Legal regulatory framework; Domestic policy context (AIP, PFC, tax-exempt bonds, municipal budget deficits, etc.); Stakeholder interests and concerns; Case studies; and Decision tree matrix and evaluation checklist. FAA compliance division's Kevin Willis explains that privatization is a local decision " ... and our role is to review that decision. We look at privatization as a management tool," adding that one size does not fit all when it comes to airport privatization. Explains Willis, "Privatization is not something that you create and then walk away from. What happens is a relationship change. You change from managing a workforce to managing a contract. "You have to map out how you plan to bring an airport through the initial implementation ... transparency and public outreach is important."

ALBANY, N.Y. (CBSNewYork/AP) – Sen. Charles Schumer called Wednesday for daily federal screening of airport and airline workers for weapons following last month’s arrests of five men accused of smuggling guns through the New York and Atlanta airports. The New York Democrat, joined in Washington by Brooklyn District Attorney Kenneth Thompson, said he’s asking the Transportation Security Administration to immediately require all U.S. airports to screen staff when they start work. “In this day and age of terrorism, rampant drug dealing and gun smuggling, we just can’t be too careful,” Schumer said. Currently, pilots and flight crews, as well as passengers, pass through the TSA metal detectors. But Schumer said many employees who work in the secure sections of airports are exempt. Schumer called the loophole “mind-boggling” and said criminals or terrorists could smuggle drugs, guns and explosives onto planes. While the TSA does a good job with background checks, he said they are “hardly foolproof” and not nearly as effective as metal detectors. The TSA has the authority to do the screening now and does not need a new law, Schumer said. He also said it would be an inexpensive fix that, at most, would add “pennies” to the cost of an airline ticket. Schumer said the gun-running scheme was “frighteningly bad news” that did not require a sophisticated smuggling scheme. Instead it was “a cakewalk for criminals to pull off,” he said. And the problem goes beyond Atlanta airport, Schumer and Thompson said. Very few, if any, airports require screening of these employees, Schumer said. Authorities have charged five people, including an airline baggage handler, with illegally shipping firearms between Atlanta and New York on passenger jets, including 153 guns seized during the seven-month investigation. Former Delta baggage handler, 31-year-old Eugene Harvey, is among those accused of helping smuggle guns aboard passenger jets bound for New York City. Investigators said the guns — some loaded — were hidden in carry-on baggage. Harvey was arrested Saturday in Atlanta. A FBI affidavit said there was enough evidence to charge him with trafficking firearms, violating airport security and aiding others in the scheme. An alleged accomplice, former Delta employee Mark Quentin Henry, was arrested in New York on Dec. 10 in a weapons trafficking investigation after an undercover agent bought a gun from one of his accomplices, according to the affidavit filed on Dec. 19. The investigation targeted firearms that were being sold in New York that had been purchased in the Atlanta area. “The ease by which airport employees are able to smuggle weapons and other contraband onto our commercial airliners is troubling and warrants immediate scrutiny and inspection,” Thompson said. That investigation, with the New York Police Department and federal authorities, identified “gaping holes in our nation’s airport security,” he said.