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Does private cash benefit US urban roads over rural infra?

Private investment can address deficiencies in some of the nation’s worst roads but a public funding component remains necessary, a paper from the right-leaning AAF suggests.

An infrastructure plan funded by the private sector would benefit urban areas but provide limited help for rural roads, according to a centre-right think tank.

In a report, the American Action Forum pointed both to higher road usage in urban areas and the comparatively poor state of roads in and around cities as reasons rural roads were likely to see less private investment.

“The most likely candidates for increased private sector participation are the urban roads bearing the most vehicle traffic, and thus having the potential to generate enough toll or congestion-pricing revenues to offset costs,” the report states, detailing that toll roads are already more common in more congested areas.

The report cites increased usage of urban roads in recent decades, saying that the related share of total driving has increased by 14 percent in the last 34 years. Despite making up just 31 percent of total road length, urban roads contribute to 70 percent of vehicle miles.

Urban roads are also in greater need of repair, the paper suggests. In 2014, 19.9 percent of urban roads did not meet the standards of the Federal Highway Administration, compared to just 3.4 percent of rural roads.

The report reinforces both the opportunities and limitations of financing major infrastructure improvements through private sector investments. A paper issued by advisors to President Trump, released before the election, proposed using tax incentives to bring in private investors.

Since Trump’s election, Democratic lawmakers have cautioned against an overreliance on private infrastructure investment, reiterating that government funding would still need to play a large part in any infrastructure plan. During a meeting of the House Transportation and Infrastructure Committee earlier this year, one Democratic congressman asked expert panellists if they believe P3s alone are capable of fixing US infrastructure; none said yes.

The AAF report, coming from a right-leaning group, will not upend this consensus.
“The private sector alone cannot make the necessary improvements to the nation’s infrastructure problems but can be a powerful tool if employed correctly,” the paper concludes.