The Colorado Transportation Commission on Thursday made the right decision w to help finance the $1.2 billion reconstruction of Interstate 70 through northeast Denver.
The move assigns all of the risk to the private sector to finance, build, maintain and operate the highway over several decades.
Colorado faces an uncertain funding future for roadways as the purchasing power of the gas tax erodes, and the public remains resistant to tax increases.
Projects like this one, however, are necessary to build safer, more efficient roadways. The I-70 project would put the highway below grade, install a cap, widen the interstate and add toll lanes.
The solution approved Thursday is clever and different than the U.S. Highway 36 project.
In both cases, the state owns the highway and sets the tolls.
But on U.S. 36, the contractor is financing and building the roadway and will maintain it, being paid back by toll revenue.
For I-70, private sector partners will be responsible for designing, building, financing, operating and maintaining the stretch of highway planned for reconstruction.
In return, the contractor will receive annual performance payments from the state.
“It places the financial risk on the private partners,” said Amy Ford, spokeswoman for the Colorado Department of Transportation.
It also places the onus on the private sector to pay the long-term maintenance costs.
The I-70 project remains underfunded, with the state still seeking an additional $90 million. Also, a federal environmental review is not complete.
Some have bristled at the thought of public-private partnerships for road construction.
But this doesn’t “privatize” our highways. It is a risk-free way to pay for necessary improvements at a time when other methods could be financially perilous given the state’s unstable highway funding sources.
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