New York’s State Commission on State Asset Maximization, a panel charged with studying whether leases of state assets or other “public-private partnerships” (PPPs) should be used to help the state pay for its massive infrastructure needs, heard over 20 pieces of testimony last week at its first public meeting, at the Borough of Manhattan Community College. (Testimony is available here.)

Many who testified singled out the $16 billion Tappan Zee Bridge project, which will replace the existing bridge with a new one accommodating bus rapid transit and commuter rail lines, as one which a public-private partnership could undertake. A representative from engineering and construction firm Fluor went so far as to submit a proposal describing how Fluor (or some “other private partner”) could design and build the bridge in a partnership with state agencies. Other assets cited in testimony included the Port Authority’s three Staten Island bridges, the Peace Bridge between Canada and Buffalo, and the New York Container Terminal.

Testimony was littered with examples of successful and unsuccessful PPPs. Ken Brynien of the Public Employees Federation offered a list of toll road partnerships that, because of “no-compete” clauses in the partnership agreements, had prohibited government from making improvements to nearby roads. Bob Yaro of the Regional Plan Association identified the Hudson-Bergen Light Rail (which is owned and funded by NJ Transit but was designed and built, and is operated by, a private company) as a success.

Advocates said that partnership agreements must follow certain principles to serve the public good. Mike Repogle of the Environmental Defense Fund said that outcome-based environmental and performance goals should be clear in the bidding process, that enforceable penalties must be levied if these goals are not met, and that contracts need independent review of performance. Yaro said that transportation agencies needed to find ways to capture some of the real estate value created from projects like the Second Avenue Subway. Kevin Corbett of the Empire State Transportation Alliance, a coalition of which TSTC is a member, said that PPPs could be successful, but not if they were motivated by “clever financial engineering.”

Another common theme was the need to streamline government procedures. NYCDOT and NYSDOT representatives argued for legislative changes that would give them the option of using “design-build” delivery, a process where agencies contract with one entity to design and build a project instead of executing separate contracts for design and construction. They said these reforms would let them deliver some projects faster and at less cost.

Another hearing is scheduled for November 20, from 2:30 to 4:30 pm, at the Albright-Knox Art Gallery Auditorium in Buffalo. The panel is expected to release preliminary recommendations in January 2009 and final recommendations in April.