58° Good Morning
58° Good Morning

New York should enable public-private partnerships

President Donald Trump applauds as he attends the

President Donald Trump applauds as he attends the Bastille Day parade in Paris, Friday, July 14, 2017. Credit: AP / Markus Schreiber

Your editorial suggesting President Donald Trump get on with rebuilding our nation was appropriate [“Where is Trump the builder?” July 2].

However, selling cheap bonds to finance this renewal is the reason our infrastructure is deplorable in the first place. Bonds pay only for the low bidder’s initial cost of construction. The operation and maintenance don’t get funded or accomplished.

On the other hand, public-private partnerships (P3’s) are used all over the world. Repayment by the government is conditioned on the P3 team staying on to operate and maintain the infrastructure, according to rigorous performance standards.

This way, a public building or road will be in great shape even after decades. There are no tax credits or other gimmicks. The government uses sales tax proceeds, motor vehicles liscensing fees or other revenue to repay the P3 team. The expected return to the investors is about 7 percent.

Now you know why pension funds are eager to join institutional investors such as life insurance companies to finance such construction. New York and New Jersey are among a few states that have not passed P3 enabling legislation. The Port Authority has it, but that’s a separate entity.

Frank Rapoport, Paul Smiths, N.Y.

Editor’s note: The writer is the chief strategy adviser for the Association for the Improvement of American Infrastructure, which lobbies for public-private partnership legislation.