Privatizing part of the state Department of Transportation is on the table for discussion in addressing crumbling roads and bridges around Mississippi.
At a scarcely publicized hearing of the House Transportation Committee at the Capitol on Monday, lawmakers heard from a national trade organization whose members consist of engineering and consulting firms around the country.
Rep. Charles Busby, R-Pascagoula, chairman of the committee, said the meeting was designed to educate legislators and transportation officials to the possibilities of outsourcing road maintenance to private companies.
Peter Loughlin, executive director of the Association for Management and Operations of Transportation Infrastructure Assets, said in his presentation that the nation’s “infrastructure owners,” which includes public transportation systems, face a $836 billion shortfall by 2020 at current rates of funding and needs continue.
A July analysis by Mississippi Today found a similar looming crisis based on funding projections. At the current funding rate, all of Mississippi’s state-owned roads could be in very poor condition in five years.
One solution: Privatization, otherwise known as asset-maintenance contracting, where governments and private companies share in the costs and risk of construction projects. President Donald Trump has made privatization a hallmark of his national highways agenda, proposing earlier this year to spend $200 billion to attract about $800 billion in private investment.
Loughlin offered the example of Florida, which conducted a study to see how much the state could save through privatization and found that the state’s annual maintenance costs would total $146 million through asset management compared to $173 million if infrastructure maintenance remained in-house at Florida’s Department of Transportation.
Lawmakers who attended the hearing seemed receptive to the proposals, although several raised concerns about contracts going to out-of-state companies and workers.
“There are not a lot of private companies (that can handle the work) in the area because they aren’t set up for it,” said Rep. Robert Foster, R-Hernando.
David Rader, another representative from the trade group, said the contracts can be structured so that smaller firms can get work as subcontractors, build themselves up over time and eventually grow big enough to compete for big prime contracts.
“We don’t come in and build an in-house performance-based (businesses) to usurp the local contracts,” Rader said.
The hearing follows a pair of Senate Transportation committee hearings held at the Capitol last week.
Melinda McGrath, the executive director the Mississippi Department of Transportation, said she believes asset-management could augment what the department is already doing, adding that approximately 45 percent of MDOT’s maintenance budget is already contracted out to private vendors.
McGrath added that lawmakers should be aware how further privatization could affect the agency’s budget — half of which comes from the state and half from the federal government, which requires a match for its grants.
With Hurricane Harvey causing massive flooding in the Houston area over the weekend, McGrath also raised questions about how the state and private companies would work together during natural disasters.
“We would have to be mindful of the structure when we talk about sharing risk. We don’t know when the next storm or ice storm is going to hit. Or worse, the next hurricane,” she said.