Past Time to Privatize Bridge Replace
November 6, 2009
San Francisco Business Times
The Bay Bridge, which normally carries some 270,000 vehicles each weekday, was closed on Oct. 27 following a botched repair. The bridge re-opened for traffic six days later, but there’s more work to be done. Might the private sector help?
The bridge’s recent troubles were sparked by the 1989 Loma Prieta earthquake, which severely damaged the eastern span, killing one traveler and causing the bridge to be closed for a month. Caltrans first decided to rehabilitate the eastern span to enable it to withstand earthquakes, but then decided to replace it with a new one. The rebuilt span was to have opened this year, at a cost of a mere $1.1 billion. But the most recent estimate indicates that the new span will not open before 2013 and at a cost of at least $6.3 billion.
Two major issues are how to keep the existing eastern span operating safely and whether to build another crossing.
The best short-term solution might be to contract the damaged eastern span to a private concessionaire to rehabilitate, maintain and operate, for a term of, say, 10 years. The concessionaire would assume all risks relating to cost escalation, and to traffic levels, and would be paid only by tolls. Rehabilitation standards would be specified by Caltrans and would not require the span to withstand a major earthquake, as Caltrans plans to demolish it. Caltrans would specify in detail the results required from the concessionaire, but not the methods to achieve them. The concessionaire would be chosen by open bidding by pre-qualified firms, based on the lowest toll to be charged.
Selecting the bidder offering the lowest toll would safeguard the interests of the bridge users.
The simplest solution for the long term might be to retain the existing eastern span and to link it to a new western span, creating a “Parallel Bridge.” Alternatively, Sen. Feinstein and others have urged the construction of a new “Southern Crossing” to connect southern Alameda County with San Francisco and San Mateo counties. Whatever the long-term decision, its implementation could best be executed by contracting out toll facilities to the lowest private bidder, who would finance construction, assume the risks, and ensure that the toll revenues are not diverted to finance transit and other projects.
Gabriel Roth is a transport and privatization consultant and a research fellow at the Independent Institute. He is the editor of the new book, Street Smart: Competition, Entrepreneurship, and the Future of Roads.