Date: Jan 27, 2017
Press Release Number: 16-2017
Agency's Proposed 10-Year Capital Plan Makes Unprecedented Investment in Core Transportation Assets; Port Authority Already Established National Leader in Public-Private Partnerships
The Reason Foundation's recently issued report "Reinventing the Port Authority of New York & New Jersey" ignores the fact that the Port Authority has already established itself over the last five years as a national leader in public-private partnerships, and has taken decisive steps towards focusing on its core transportation assets and mission
The agency has attracted billions of dollars in private capital investment in recent years, and divested more than $1.4 billion in non-core assets as it refocuses on its core transportation mission. And while the agency has succeeded in attracting billions in private capital, it is more focused than ever on thoughtful planning for the region's long-term transportation needs.
The report by Robert Poole advocates for privatization and public-private partnerships. Yet here are the facts and reality: The Port Authority's $1.5 billion Goethals Bridge Replacement, nearly 70 percent complete, is being done through the first true surface transportation PPP in the Northeast. The $4 billion LaGuardia Terminal B replacement, which broke ground last summer, represents the largest transportation PPP in the United States. Overall, the agency is evaluating all of its major capital projects for delivery under the public-private partnership model.
While the report is critical of the region's port facilities, it fails to recognize the Port Authority does not operate them, but leases the land to private operators and infrastructure investors under long-term arrangements. The agency long has recognized the private sector is best suited to develop and operate these capital intensive facilities that compete in a volatile and often financially challenging global shipping sector.
The report also argues the Port Authority's current model has led to underinvestment in the agency's core facilities. Yet the agency's proposed 10-year $32 billion capital plan – the largest in its history - undertakes an unprecedented cycle of capital investment. The Goethals Bridge PPP is 70 percent complete and will provide an entirely new replacement bridge by 2018. The $1.6 billion Bayonne Bridge project will effectively provide a brand new bridge for travelers, retrofitted to allow for modern container ships to pass underneath to keep the ports competitive. The report states “there are no other known PA plans for revitalizing its core [highway] transportation assets.” That overlooks the $2 billion Restoring the George program in the Capital Plan, which includes a complete overhaul and revitalization of the George Washington Bridge – the world's busiest bridge. The proposed plan also commits $3.5 billion towards a replacement of the Port Authority Bus Terminal, which plays a crucial role in the trans-Hudson transportation network. Over the next decade, the agency is investing $10 billion in tunnels, bridges and bus terminals.
At Port Authority airports, nearly all the passenger terminals are developed, financed, and operated by airlines or other private operators – including the $4 billion LaGuardia Terminal B project. From United's Terminal C at Newark, to Delta's Terminal C&D at LaGuardia, to American Airline's Terminal 8, British Airways' Terminal 7, JetBlue's Terminal 5, IAT/Delta's Terminal 4, and the Air France/Japan Airlines/Lufthansa/Korean Air consortium at Terminal 1 – all at JFK – are privately developed and operated. The proposed 10-year Capital Plan allocates $11.6 billion towards the modernization and redevelopment of the agency's major airports. The Port Authority's airport infrastructure investments are expected to spur billions of dollars in additional private sector investment. If anything, the Port Authority should play a bigger, stronger role in planning and coordinating private development at the airports in order to have a more unified, holistic long-term approach to development.
The report's argument against cross-subsidization between Port Authority operating units is misplaced, and fails to recognize the critical value that public transit contributes to the economic health and competitive advantage of the New York-New Jersey region. While it is true that tunnel and bridge tolls help subsidize the PATH rail transit system and deficits at the existing PABT, all transit systems operate at a deficit and rely on public subsidies. From a policy standpoint, subsidizing mass transit makes sense when doing so to facilitate jobs, mobility and the economic health of our region. While that often is done with federal or state support the Port Authority receives no money from either state.
The report's call for the Port Authority to divest current non-transportation assets fails to recognize the agency's efforts in recent years to systematically review its non-core assets for divestiture. Most notably, the Port has divested retail assets at the World Trade Center to Westfield for $1.4 billion. Additionally, the Port Authority is in the process of or has divested its economic interests in the Essex County Resource Recovery Facility, Newark Legal Center, Bathgate, and the Teleport on Staten Island.
As further evidence of the agency's commitment to its core mission and purpose, the proposed Capital Plan includes $2.7 billion to support debt service towards the critical trans-Hudson Gateway rail tunnel program. This program will build, on an expedited basis, a new rail tunnel under the Hudson to add capacity and replace the century-old Amtrak North River tunnels that were badly damaged in Superstorm Sandy.
Port Authority of New York and New Jersey
Founded in 1921, the Port Authority of New York and New Jersey builds, operates, and maintains many of the most important transportation and trade infrastructure assets in the country. The agency's network of aviation, ground, rail, and seaport facilities is among the busiest in the country, supports more than 550,000 regional jobs, and generates more than $23 billion in annual wages and $80 billion in annual economic activity. The Port Authority also owns and manages the 16-acre World Trade Center site, where the 1,776-foot-tall One World Trade Center is now the tallest skyscraper in the Western Hemisphere. The Port Authority receives no tax revenue from either the State of New York or New Jersey or from the City of New York. The agency raises the necessary funds for the improvement, construction or acquisition of its facilities primarily on its own credit. For more information, please visit http://www.panynj.gov.