Court kills Pennsylvania P3 bridge program, questions state law

BY SourceMedia | MUNICIPAL | 07/05/22 02:02 PM EDT By Caitlin Devitt

Pennsylvania?s Commonwealth Court on June 30 squashed the state?s ambitious plan to use public-private partnerships and tolling to repair or replace nine major bridges across the state.

The state had already tapped Macquarie Infrastructure Developments LLC as private partner on the program.

Judge Ellen Ceisler also called into question the constitutionality of the state?s entire P3-enabling statute, Act 88. But she did not ultimately weigh in on the question, saying that ?other grounds exist for disposing of the instant matter.?

It?s not clear yet whether the Pennsylvania Department of Transportation will appeal to the Supreme Court of Pennsylvania. A PennDOT spokesperson said only that the General Assembly has ?failed to offer any solutions, beyond their approval of this P3 initiative, that will assist the administration?s desire to phase out the gas tax,? which Gov. Tom Wolf has said is ?no longer a dependable source of funding to meet all bridge and highway needs in this commonwealth.?

The $2.2 billion Major Moves plan is one of four P3 initiatives from PennDOT's Public-Private Transportation Partnerships Office, and the most recent. The program called for the state to rely on tolling to fund the accelerated construction or repair of up to nine interstate and expressway bridges.

The state has more than 3,200 spans that are classified as structurally deficit, according to the American Road & Transportation Builders Association.

The Rapid Bridge Replacement Project, the state?s first P3, was also the first P3 in the U.S. to bundle multiple bridges into a single procurement. It targeted hundreds of spans and was structured as an availability-payment P3.

None of the Rapid Replacement bridges featured tolls, which sparked the most popular opposition to the Major Bridges program.

?There?s a lot of controversy in Pennsylvania with regard to P3 projects,? said Bob Latham, executive vice president of Associated Pennsylvania Constructors, a group that Latham said is ?not particularly enamored with the P3 procurement model? and prefers the conventional design-bid-build or design-build process.

?The long and the short of it is that this [ruling] will give an opportunity for folks to step back and see how to move these projects forward,? Latham said, adding that he expects the projects to advance with another funding method like general obligation bonds or tapping the state?s surplus.

?The ruling will require PennDOT and the General Assembly and maybe even the governor himself to work together to look at the best way to go forward with these projects," he said.

If PennDOT doesn?t appeal or the top court doesn?t side with the state, lawmakers may need to re-write parts of Act 88 to clarify aspects of the law, such as which members of the public can challenge projects, said Baruch Feigenbaum, senior managing director of transportation policy at Reason Foundation.

?The way the law is written raises questions,? Feigenbaum said. ?If PennDOT were to do another P3, they would probably get sued so unless they get clearance from a higher-level body, they?re going to have to make some changes to the law.?

The decision likely won?t carry any national ramifications, as it was largely a procedural ruling and Pennsylvania isn't considered a leader in the P3 transportation space, Feigenbaum said.

In her opinion, Ceisler said the P3 Board violated Act 88 by not specifying in the beginning what bridges it would target, which meant that affected parties were not consulted as required by the law.

?The board essentially approved a multibillion-dollar transportation project based on what was essentially a four-page PowerPoint recommendation from DOT that failed to delineate which, or how many, pieces of public infrastructure the Initiative would affect,? the judge wrote. ?Given these concerns, we strongly question the constitutional viability of Act 88. However, as other grounds exist for disposing of the instant matter, we will not further address the constitutionality of Act 88.?

Patrick Jones, executive director and CEO of the International Bridge, Tunnel and Turnpike Association, said that tolling remains a good financing solution to infrastructure needs.

"While higher gas prices may impact their return to pre-pandemic levels of traffic, toll facilities are well established, are better maintained and safer than non-toll roads, and are incubators for technologies that make highways smarter and safer for everyone," he said.

The lawsuit is one of two court cases brought by municipalities that challenged the program. In the other case, a Commonwealth Court judge in May imposed a temporary injunction on tolling projects, a ruling that halted all Major Bridges work, such as studies, hearings and meetings.

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