Question

As the U.S. grapples with a growing list of transportation infrastructure needs and limited public funds, more states are looking to public-private partnerships as a means of fixing and replacing aging bridges, tunnels and roads. Should the private sector help rebuild American infrastructure? Is there a downside for taxpayers?​ what would be the engineer's opinion?

Answer 1

With a lacking fund for the investments in the public sector like building of bridges and roadways , there is a fiscal challenge to it. The state must have sufficient funds in order to provide investments given the reserves or the capacity of the govt.

Given the condition of US, with time as the bridges wear off , there is replacement needs for safety and convenience reasons. If the funds are not present , public Pvt partnership is the way out. PPP works when the state subject ventures are taken up by the Private players. The costing is comparatively higher because of the open market prices and absense of subsidies which earlier are taken care by the public sector . The arrangements including raw material , labour , design , professionals etc are all supplied by the private players .

Then the question arrises , why and how would the private players derive out the profits and Costing of such bulky projects . The extraction of profits is a long run project. Long run meaning the revenue generated from projects like tolls from the new bridges and the highways built , goes directly to the private investor who built it in the first place. Hence over a time the revenue generated takes care of cost , profits and later the maintenance. Hence yes private sector can help rebuilding the American infrastructure.

For tax payers it is a long run liability. The individuals , in addition to the tax given to the state for development and infrastructure , give added toll taxes to use the resources built by the private sector. In addition to this , the pricing is also high, given the costing of an open market is being held up while building the projects.. Hence this is not the most profitable deal for the tax payer. For professionals like engineers, the wage they get could be comparatively higher, because of higher profits , and regulations by the govt. But incase the govt decides not to get involved in wage pricing, to maximize the profit , private players might deny paying large sums to the wage takers . Hence situation can vary for varying circumstances. But in both the cases employment is generated , especially for professionals like engineers.