In ominous sign for Trump's infra plans, Texas sinks P3 bill

The legislation, which would have allowed for partnerships on 18 roads, was routed in the state’s House of Representatives.

The Texas legislature has voted down a bill to allow P3s to be used for certain highway projects, raising red flags for those expecting a Trump-led surge in road privatisation.

The bill, which would have allowed Texas’ department of transportation to enter development agreements for 18 projects, was soundly defeated in the state’s House of Representatives on 5 May, with just 52 of the chamber’s 150 legislators voting in favour and 79 voting against. The bill would have paved the way for tolls to be used to fund road improvements.

Texas Representative Larry Phillips, the author of the legislation, told Infrastructure Investor that the bill was put forward so as to dovetail with discussions in Washington about fresh incentives for private investment in infrastructure projects. Phillips said many lawmakers voted against the bill because they feared constituents would oppose new tolls.

“You've got a large part of the body that probably is not as educated on these types of projects and their benefits,” Phillips said. “This tool needs to be in the toolbox for transportation.”

US President Donald Trump, who has promised to spur $1 trillion in infrastructure spending, has indicated that he envisions a greater role for the partnerships to draw in private capital. But as the Texas bill shows, any plan that relies on a dramatic rise in tolling may receive pushback from the public. While 37 states including Texas have passed legislation allowing for P3s, according to a report published by Moody’s Investor Service, variation in state laws has made completing such projects more difficult.

Despite his bill’s defeat, Phillips does not think the public is opposed to using tolls to pay for road improvements. Nor does he believe other states will be discouraged.

“You can't look at Texas and say, ‘That's what the rest of the nation is going to do,’” he said. “Other states are going to take advantage of [P3s], and I certainly think it is a great way to leverage tax dollars.”

For Texas, it will likely be some time before there is another chance to greenlight these projects. After this spring’s legislative session ends, lawmakers are not scheduled to meet again until January 2019.