Agreements that involve investors and private partners are key to successful bike infrastructure

High Speed Rail construction requires public-private partnerships- French and California High Speed Rail prove

(Yonah Freemark, August 27^th, 2011, independent researcher, Gordon Grand Fellowship from Yale University, writes about transportation and land use issues for The Transport Politic and The Infrastructurist, The Transport Politic, “Doing Right by thePublic: PPs in High-Speed Rail”, http://www.thetransportpolitic.com/2011/08/27/doing-right-by-the-public-ppps-in-high-speed-rail/, 7/17/2012

But because of more detailed projections, the 178-mile first phase of the project is now expected to cost far more than initially envisioned — $10 to $13.9 billion instead of $7.1 billion — and it will need an injection of funds from another source to be constructed. With a promise to the state’s citizens that another demand for California-wide funds will be avoided, few local dollars to contribute, and an utter inability to rely on Washington for practically anything, that means the system will have to find private investors to join in. Whatever the relative merits of allowing private companies to invest in what is fundamentally public infrastructure, California has no other place to turn for the successful completion of its system.¶ California is not alone; with a depressed economy and few public sector funds available, there is increasing recognition of the importance of engaging private-sector funds in the creation of infrastructure. Illinois Governor Pat Quinn signed a bill this week authorizing public-private partnerships (PPPs) to be used for the creation of infrastructure in his state.¶ Critics of the California High-Speed Rail Authority have repeatedly argued that the agency would be unable to locate businesses that might be willing to contribute to the system, but international examples suggest that there is significant private sector interest in infrastructure construction. The Authority will release a request for qualifications soon and select a winning bidder in early 2012. But it has yet to clarify the manner in which it would structure its relationship with private companies in terms of financing, construction, and operations.¶ For precedents, the state should to look at France, which has recently signed two very large deals with private financing and construction conglomerates for the completion of two new extensions of its already large high-speed rail network. They provide two different models for engaging PPPs.¶ Encouraging private investment in the California high-speed system now may make it more feasible to envision its construction in the short-to-medium-term. Delaying using future public sector revenues to pay for a project today is the basis of much long-term investment, so there is nothing particularly out of the norm about this idea. But the use of such investment will realistically mean a future of higher ticket prices resulting from the need to pay off the bonds taken out for the project’s completion.

2NC Solvency – High Speed Rail

(Tony Dutzik, Jordan Schneider, senior policy analyst with Frontier Group, specializing in energy, transportation and climate policy, Summer 2011, U.S. PIRG Education Group, “High Speed Rail: Public, Private or Both?”, http://cdn.publicinterestnetwork.org/assets/85a40b6572e20834e07b0da3e66e98bf/HSR-PPP-USPIRG-July-19-2011.pdf, 7/172012

(Tony Dutzik, Jordan Schneider, senior policy analyst with Frontier Group, specializing in energy, transportation and climate policy, Summer 2011, U.S. PIRG Education Group, “High Speed Rail: Public, Private or Both?”, http://cdn.publicinterestnetwork.org/assets/85a40b6572e20834e07b0da3e66e98bf/HSR-PPP-USPIRG-July-19-2011.pdf, 7/172012

Advantages in Speed, Cost or ¶ Quality¶ PPPs are often touted as being able to deliver infrastructure projects faster, cheaper ¶ or with better quality than a public-sector entity. This is not to say that private ¶ entities are inherently better suppliers ¶ of infrastructure than public agencies. ¶ Private entities bring many inherent disadvantages, including higher capital costs ¶ and the need to cover financial returns to ¶ shareholders. The process of undertaking ¶ a PPP also incurs transaction costs—such ¶ as the potential need to pay stipends to ¶ would-be bidders to help defray the cost ¶ of preparing proposals.¶ 24 ¶ States and localities that have pursued toll road PPPs in ¶ the United States, for example, typically ¶ pay millions to auditing, consulting and ¶ legal firms.¶ A key question for government agencies ¶ considering PPPs is the degree to which the ¶ savings purportedly delivered by private ¶ companies are real or illusory. Real savings ¶ can result from a private company’s access ¶ to expertise and experience, its ownership ¶ of proprietary technologies, or economies ¶ of scale. In the case of high-speed rail, there are several international firms that ¶ have amassed decades of experience in the ¶ construction and operation of high-speed ¶ rail lines, and may be effective competitors to build similar systems in the United ¶ States.¶ However, PPP savings can also be illusory if savings are merely generated by ¶ avoiding labor and wage requirements or ¶ regulatory standards that would otherwise ¶ govern projects built directly by government agencies. These changes might ¶ produce a nominal cost “savings” in the ¶ short run, but they are achieved by externalizing costs onto or transferring benefits ¶ from other residents and employees in the ¶ state rather than by adding unique value ¶ that can only be delivered by the private ¶ sector. ¶ To assess whether a PPP approach ¶ delivers added value to taxpayers, governments must carry out a “value for money” ¶ test, such as the public sector comparator. ¶ These tests are intended to determine ¶ whether a PPP or traditional public-sector contracting will deliver the greatest ¶ value, taking into account quality, price ¶ and risk.

2NC Solvency – High Speed Rail

Only access to private capital can successfully fund high speed rail networks

Dutzik and Schneider 11

(Tony Dutzik, Jordan Schneider, senior policy analyst with Frontier Group, specializing in energy, transportation and climate policy, Summer 2011, U.S. PIRG Education Group, “High Speed Rail: Public, Private or Both?”, http://cdn.publicinterestnetwork.org/assets/85a40b6572e20834e07b0da3e66e98bf/HSR-PPP-USPIRG-July-19-2011.pdf, 7/172012

Access to capital is not typically a strong ¶ suit of private entities. Government ¶ agencies are capable of borrowing large ¶ amounts of money to finance public infrastructure at relatively low cost. However, ¶ in the current atmosphere of constrained ¶ public budgets, access to private capital ¶ may make the difference between building necessary high-speed rail projects and ¶ leaving them on the drawing board for ¶ years to come. ¶ Because of the multi-billion dollar price ¶ tag of most high-speed rail projects, governments in both Europe and the United ¶ States have stated that private investment ¶ will be necessary to build out their highspeed rail networks.

1NC Privatization CP – Ports/Waterways

Peter Van Doren, senior fellow at the Cato Institute and Chris Edwards, the director of tax policy studies at the Cato Institute, 12/09/08, Dhttp://www.cato.org/publications/commentary/jumping-government-bridge, “Jumping off the Government Bridge”; AB

2NC Solvency – Ports/Waterways

Britain privatizes 19 ports to form Associated British Ports. The private ports earn profits, pay taxes, and return dividends to shareholders. Two-thirds of British cargo goes through privatized ports, which are highly efficient. By contrast, nearly all U.S. ports are still government-owned and less efficient than the best private ports in the world.

Seaports. Nearly all U.S. seaports are owned by state and local governments. Many operate below world standards because of inflexible union work rules and other factors. A Maritime Administration report noted that "American ports lag well behind other international transportation gateways such as Singapore and Rotterdam in terms of productivity."5 Dozens of countries around the world have privatized their seaports. One Hong Kong company, Hutchinson Whampoa, owns 30 ports in 15 countries. In Britain, 19 ports were privatized in 1983 to form Associated British Ports. ABP and a subsidiary, UK Dredging, sell port and dredging services in the private marketplace. They earn a profit, pay taxes, and return dividends to shareholders.6 Two-thirds of British cargo goes through privatized ports, which are highly efficient. Because of the vital economic role played by seaports in international trade, this should be a high priority reform area in the United States.

To address this problem, Government should continue to give priority attention to ensuring the provision of adequate and reliable infrastructure for road, rail, air and waterways transportation, including effective road transport system management in order to achieve supply chain efficiencies. "For effectiveness (PPP, Government should continue to explore the Public-Private Partnership) arrangement, in line with Build, Operate and Transfer (B.O.T) options/models nationwide for the following: Rail (Interstate, East-West to link Calabar with Lagos, and Lagos with Kano and Calabar with Maiduguri); Metro lines within cities to facilitate intra-city movement; Roads - Coastal Road from Lagos to Calabar, Lagos - Kano road and Calabar - Maiduguri road; Rural Road to support agricultural produce and evacuation to markets; Water Ways - Develop inland water ways and deep 17 to 20 metres ports to permit construction of local oil rigs., etc. "

Unlike the regulations affecting other transportation sectors, maritime regulations and subsidies have been strikingly resistant to reform. A hodgepodge of conflicting and costly policies—subsidization, protectionism, regulation, and taxation—unnecessarily burdens the U.S.-flag fleet, forces U.S. customers to pay inflated prices, and curbs domestic and international trade. The list of rules and regulations governing shipping is too exhaustive to catalog here, but one thing is clear: shipping policies must be thoroughly reviewed and revamped. Congress should pay special attention to deregulation of ocean shipping and other trade- and consumer-oriented reforms. In particular, Congress should repeal the Jones Act (sec. 27 of the Merchant Marine Act of 1920). The Jones Act prohibits shipping merchandise between U.S. ports ‘‘in any other vessel than a vessel built in and documented under the laws of the United States and owned by persons who are citizens of the United States.’’ The act essentially bars foreign shipping companies from competing with American companies. A 1993 International Trade Commission study showed that the loss of economic welfare attributable to America’s cabotage restriction was some $3.1 billion per year. Because the Jones Act inflates prices, many businesses are encouraged to import goods rather than buy domestic products. The primary argument made in support of the Jones Act is that we need an all-American fleet on which to call in time of war. But during the Persian Gulf War, only 6 vessels of the 460 that shipped military supplies came from America’s subsidized merchant fleet. Repealing the Jones Act would allow the domestic maritime industry to be more competitive and would enable American producers to take advantage of lower prices resulting from competition among domestic and foreign suppliers. Ships used in domestic commerce could be built in one country, manned by citizens of another, and flagged by still another. That would result in decreased shipping costs, with savings passed on to American consumers and the U.S. shipping industry. The price of shipping services, now restricted by the act, would decline by an estimated 25 percent.

In addition to opening up the woefully protected land and air services industries, maritime transports one area where the government could immediately save consumers and taxpayers some money. The Merchant Marine Act of 1920 (commonly known as the “Jones Act”) stipulates that all cargo shipped between U.S. ports be carried on U.S.-built, U.S.-operated, and U.S.- owned vessels, in order to protect the domestic shipping industry from foreign competition and to encourage the viability of the domestic shipping industry for use in times of war. Given that a substantial part—over onethird—of U.S. water-borne commerce in 2006 was between U.S. ports, the potential savings from allowing foreign ships to compete for this business would be significant. A 1995 study by the International Trade Commission estimated that the Jones Act alone costs U.S. businesses and consumers $2.8 billion annually (1995 dollars) in increased shipping costs, mainly because of the relatively high cost of domestic labor for maintenance and staffing. In addition, cargo preference laws dictate that most government owned cargo, military cargo, and most U.S. food aid must be shipped on U.S.-flagged, U.S.-built, and U.S.-operated vessels. Overall, the U.S. International Trade Commission estimates that U.S.-flagged tankers cost over $10,000 a day more to operate than do their foreign competitors, and U.S.-flagged containerships over $12,000 a day more.

In particular, the 107th Congress should repeal the Jones Act (section 27 of the Merchant Marine Act of 1920). The Jones Act prohibits shipping merchandise between U.S. ports ‘ in any other vessel than a vessel built in and documented under the laws of the United States and owned by persons who are citizens of the United States.’’ The act essentially bars foreign shipping companies from competing with American companies. A 1993 International Trade Commission study showed that the loss of economic welfare attributable to America’s cabotage restriction was some $3.1 billion per year. Mayors, such as John Norquist of Milwaukee, complain that, because it raises shipping costs and thus reduces shipping, the Jones Act is responsible for underused port facilities and lost revenues for municipalities. Because the Jones Act inflates prices, many businesses are encouraged to import goods rather than buy domestic products. For that reason, Sen. Jesse Helms of North Carolina introduced legislation that would open domestic shipping to foreign-flag vessels. Helms called the Jones Act ‘‘ a harmful anachronism that enables a few waterborne carriers to cling to a monopoly on shipping.’’ He noted that the Jones Act has forced many North Carolina pork and poultry farmers to buy grain from Canada rather than the Midwest, because certified shipping vessels are unavailable and rail is an inefficient alternative. The primary argument made in support of the Jones Act is that we need an all-American fleet on which to call in time of war. But during the Persian Gulf War, only 6 older vessels of the 460 that shipped military supplies came from America’s subsidized merchant fleet. Rob Quartel, then a commissioner at the Federal Maritime Commission, wrote, ‘‘In short, the success of the military sealift— a brilliant feat of logistics— occurred despite [rather than because of] 75 years of government subsidies, protectionism, regulation, and energy and management controls.’’ Since the Jones Act requires American sailors to staff domestic vessels, it also has significant support from organized labor.

Robert Puentes, Senior Fellow, Brookings Institution, 2011 [http://www.brookings.edu/research/testimony/2011/11/16-infrastructure-puentes]