Editor's note: This is the first in a two-part series on the successes and failures of public-private partnerships, a funding mechanism that President Donald Trump has proposed to accomplish his $1 trillion dollar infrastructure plan to rebuild America. Today, we take a look at a project that's gone very wrong; on Tuesday, we will examine a success story.
Texas had high hopes for the southern segments of SH 130, a 41-mile stretch of the high-speed toll road east of San Antonio.
The state had put off building that stretch of road until a pair of investors stepped forward and offered what sounded like a great deal: Texas would get a big check for turning the rights to build and operate the toll road over to a private entity, a move that would give the state a new highway and a share of the tolls. The state would own the road and rake in revenue, but wouldn't have to put up the cash for its construction.
That's the kind public-private partnership model that President Donald Trump and some conservatives say the nation needs to rebuild its crumbling infrastructure without adding to the debt and deficit. Trump vowed a $1 trillion dollar infrastructure plan funded by public-private partnerships in his first joint address to Congress in January and hired an expert in such deals, D.J. Gribbin, as the special assistant to the president for infrastructure policy. Since then, few details of Trump's plan have been released.
But a decade after Texas and its partners first shook hands, the corporation running the road is in bankruptcy — with more than $430 million still owed to U.S. taxpayers stemming from a loan approved by the U.S. Department of Transportation when Gribbin was general counsel in 2008 — and more than a billion owed to other investors, too.
It's the latest in a slew of toll road public-private partnerships that have fallen apart in the wake of the recession 10 years ago, at times leaving taxpayers struggling to recover their investment. The pitfalls could serve as a yellow caution light for lawmakers considering Trump's plan.
In Texas, the road has been blamed for flooding a small town, feral hogs roam dangerously across it and unrepaired potholes make for a bumpy ride, according
The state expected $245 million in toll payments over 50 years, but less than 4 years in it's seen just $3 million.