Pennsylvania one step away from PPP legislation

A key piece of transportation PPP legislation has advanced in the Pennsylvania House of Representatives, positioning the Commonwealth closer than ever to formal policy. Public officials hope a legislative framework will entice private investors back.

The Commonwealth of Pennsylvania reached a milestone last week when House Bill 3 (HB 3) – a key piece of public-private partnership (PPP) legislation for transportation projects – survived its second of three considerations in the House of Representatives chamber.

Policymakers must still enter the ring for yet another round, spotlighting the roller coaster that Pennsylvania has ridden when it comes to PPP legislation. However, it is safe to say that the bill has indeed advanced seeing as round two of consideration is deemed the most challenging in the House chamber, as it is where the vast majority of debates and amendments occur.

Nonetheless, the PPP bill has been tied up in the state’s General Assembly for eight years, during which time State Representative Rick Geist, House Transportation Committee Chairman, has not reneged on his support for the policy. 

To be clear, there remain two separate PPP pieces of legislation in the Pennsylvania General Assembly: HB 3 in the House and Senate Bill 344 (SB 344) – also for transportation – in that chamber. According to a public sector source, both chambers agree on nearly all points with the exception of one item, on which they continue to wrangle.

Once a PPP transportation law is enacted in Pennsylvania, a seven-member board, authorised to provide preliminary approval on PPPs, must be formed. The chambers cannot agree on whether or not General Assembly members should be allowed on this board. The House says no. “We don’t want public officials on the board,” the public sector source said. “We want qualified experts to be at the table to determine whether a project has enough merit to move forward.”

But first, the PPP transportation bill has to pass. If it does, private capital will be able to help Pennsylvania address its need for $3 billion in funding annually for transportation infrastructure projects alone. One of the first highway expansions that might be up for PPP contention is the rehabilitation of Interstate 95 (I-95), through the city of Philadelphia, a project that could involve the addition of toll lanes.

Luckily for Pennsylvania, private investors are patient: “The private investment community has made it clear they’re ready to invest in Pennsylvania but they won’t come back until there’s legislation on the books,” the source explained.

Pennsylvania last tried its hand at transport PPPs back in 2008, when a consortium led by Spanish developer Abertis offered $12.8 billion for a 75-year concession of the Pennsylvania Turnpike. But political opposition prevented the leasing.