Arizona DOT set to loosen PPP gridlock

Despite a three-year-old law, Arizona has never privatised a road. A project to improve cross-border commerce might undo what has been a PPP stall.

Enabling legislation aside, Arizona is a perennial non-starter when it comes to getting the private sector to develop its transportation infrastructure. But a federal government project might provide the impetus to change that.

Federal funding to enlarge and modernise the Mariposa Land Port of Entry in Nogales, Arizona, has led the Arizona Department of Transportation (ADOT) to investigate tolling, admitted P3 director Gail Lewis.

Mariposa Port is a crucial thoroughfare for importing winter produce from cross-border Mexico. Bettering it would drive trade. But adjacent State Route 189 (SR 189) is aging and inadequate. Leaving it unable to accommodate increased traffic volume would defeat the purpose of upgrading the port.

“We are going to have a big, nice, new port and just a little, sad road,” Lewis said.

A toll road concession for SR 189 is receiving serious consideration, Lewis admitted. Moreover, Arizona in April signed a bill authorising electronic tolling enforcement into law, further incentivising tolling.

While SR 189 is the most immediate potential public-private partnership (PPP), Lewis noted the department is developing an incipient deal pipeline.

A proposed 45-mile north-south corridor from Phoenix to Tucson is a strong candidate for private sector involvement, said Lewis. Also, a more speculative project, a “greenfield” interstate route connecting Phoenix to Las Vegas, Nevada, is being discussed.

In each case “tolling is under consideration for everything we mention,” Lewis confirmed.

In 2009, House Bill 2396 (HB 2396), a supposed public-private partnership (PPP) creator that authorised alternative procurement, went into effect.

But Arizona lacked a project pipeline, making HB 2396 inapplicable. That year, the Canyon State also announced its openness to unsolicited bidding, though the private sector remained unmoved.

Meanwhile, similarly highway dependent California and Texas introduced tolling. Today, Arizona is still without a toll road and, as Lewis pointed out, without much needed capital.

“With improved gas mileage, people can drive a lot farther on a gallon, so the purchase power from gas tax has eroded,” Lewis said.