This post originally appeared on Orphan Road.
Faced with a budget shortfall, the Rocky Mountain News reports that Denver is considering a public-private partnership for part of its light-rail. The article notes several other transit projects that have been built with a PPP model called DBOM, for Design, Build, Operate and Maintain.
If that acronym rings a bell, it’s because the same system was used for the Seattle Monorail Project. The plan was for the board to raise the money and sign the contract, then hand the whole thing off to the Fluor Corporation (or, more accurately, a consortium of companies led by Fluor). Additionally, you have the price guarantee: once the SMP signed off on the contract, Fluor would have had to build it, come hell or high water. There would be no sudden tax increases down the road because the project had run over budget, they’d just have to eat the difference.
And that’s what makes PPPs attractive: you can hand off the whole thing to a company that presumably has more expertise in the area than you do. Halliburton providing food and laundry services to U.S. soldiers in Iraq is probably the most famous (infamous?) example of a PPP. But there are many others.
I’ve been skeptical of PPPs, because any efficiency you might gain in terms of expertise is usually eaten up by the higher cost of providing the service. And sometimes it’s just a stalking horse to try and break the public-sector unions by firing government employees and re-hiring them as contractors.
But the monorail didn’t fail because it was a PPP. The monorail failed because the board of directors was in way over its head and didn’t want to build the political support necessary for a large infrastructure project. As interim Chair Kristina Hill noted at the time, “You can’t build infrastructure by initiative. There is no infrastructure in the United States that has been built by petition—none!—and you have to ask yourself why.”
The RMN article suggests that Seattle’s forthcoming BRT system — RapidRide — may be run via DBOM, and that would make sense: King County Metro is an experienced transit operator, so subcontracting out this one piece is a good use of the PPP strategy.