Highway Public-Private Partnerships: Securing Potential Benefits and Protecting the Public Interest Could Result from More Rigorous Up-front Analysis
Published: 2008-07-24T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: The private sector is increasingly involved in financing and operating highway facilities under long-term concession agreements. In some cases, this involves new facilities; in other cases, firms operate and maintain an existing facility for a period of time in exchange for an up-front payment to the public sector and the right to collect tolls over the term of the agreement. In February 2008 GAO reported on (1) the benefits, costs, and trade-offs of highway public-private partnerships; (2) how public officials have identified and acted to protect the public interest in these arrangements; and (3) the federal role in highway public-private partnerships and potential changes in this role. The Senate Finance Committee asked GAO to testify on this report and to highlight its discussion of tax issues. GAO reviewed the experience of projects in the U.S. (including the Chicago Skyway and Indiana Toll Road agreements), Australia, Canada, and Spain.
section_title: What GAO Found
paragraphs: Highway public-private partnerships provide potential benefits, such as sharing risks with the private sector, more efficient operations and management of facilities and, through the use of tolling, increased mobility and more cost-effective investment decisions. There are also potential costs and trade-offs--there is no "free" money in public-private partnerships and it is likely that tolls on a privately operated highway will increase to a greater extent than they would on a publicly operated toll road. There are also financial trade-offs. Unlike public toll authorities, the private sector pays federal income taxes and can deduct depreciation on assets for which they have effective ownership. The extent of these deductions and the amount of foregone revenue, if any, to the federal government is difficult to determine. Demonstrating effective ownership may require lengthy concession periods and, according to experts involved in the lease of the Chicago Skyway and Indiana Toll Road, contributed to the 99-year and 75-year concession terms on these two facilities, respectively. Experts also told us that in the absence of the depreciation benefit, the concession payments to Chicago and Indiana would likely have been less than $1.8 billion and $3.8 billion, respectively. Highway public-private partnerships in the U.S. that GAO reviewed sought to protect the public interest largely through concession agreement terms prescribing performance and other standards. While these protections are important, governments in other countries, such as Australia, have developed systematic approaches to identifying and evaluating public interest and require their use when considering private investments in public infrastructure. Similar tools have been used to some extent in the United States, but their use has been more limited. Using up-front tools can also assist public agencies in determining the expected benefits and costs of a project and an appropriate means to deliver the project. Not using such tools may lead to certain aspects of protecting the public interest being overlooked. While direct federal involvement has been limited to where federal investment exists and while the DOT has actively promoted them, highway public-private partnerships may pose national public interest implications such as interstate commerce that transcend whether there is direct federal investment in a project. However, given the minimal federal funding in highway public-private partnerships to date, little consideration has been given to potential national public interests in them. GAO has called for a fundamental reexamination of our surface transportation policies, including creating well-defined goals based on identified areas of national interest. This reexamination provides an opportunity to identify emerging national public interests (including tax considerations), the role of the highway public-private partnerships in supporting and furthering those national interests, and how best to identify and protect national public interests in future highway public-private partnerships.

section_title: Letter
paragraphs: We appreciate the opportunity to testify on public-private partnerships and  their role in the surface transportation system. As you know, America’s  transportation system is the essential element that facilitates the  movement of both people and freight within the country. Nevertheless, the  current federal approach to addressing the nation’s surface transportation  problems is not working well. Despite large increases in expenditures in  real terms for transportation, the investment has not commensurately  improved the performance of the nation’s surface transportation system,  as congestion continues to grow and looming problems from the  anticipated growth in travel demand are not being adequately addressed.  We have called for a fundamental reexamination of our surface  transportation policies, including creating well-defined goals based on  identified areas of national interest, incorporating performance and  accountability into funding decisions, and more clearly defining the role of  the federal government as well as the roles of state and local governments,  regional entities, and the private sector.
The private sector has long been involved in surface transportation as  contractors in the design and construction of highways. In recent years,  the private sector has become increasingly involved in assuming other  responsibilities including planning, designing, and financing. Under some  of these arrangements, the private sector is being looked to not only to  construct facilities, but also to finance, maintain, and operate facilities  under long-term concession agreements—up to 99 years in one case. In  some cases, this involves financing and constructing a new facility and  then operating and maintaining it over a specified period of time. In other  cases, this involves operating and maintaining an existing toll road for a  period of time in exchange for an up-front payment provided to the public  sector and the right to collect tolls over the term of the agreement.
We recently issued a report on public-private partnerships in the highway  sector. For this hearing, you asked us to discuss this report—in particular,  the financing and tax issues it raised. My remarks today are based on this  February 2008 report and focus on (1) the benefits, costs, and trade-offs  to the public sector associated with highway public-private partnerships;  (2) how public officials have identified and acted to protect the public  interest in highway public-private partnerships; and (3) the federal role in  highway public-private partnerships and potential changes in this role. We  performed our work in accordance with generally accepted government  auditing standards. Those standards require that we plan and perform the  audit to obtain sufficient, appropriate evidence to provide a reasonable  basis for our findings and conclusions based on our audit objectives. We  believe that the evidence obtained provides a reasonable basis for our  findings and conclusions based on our audit objectives.
We limited the term “highway public-private partnerships” to highway- related projects in which the public sector enters into a contract, lease, or  concession agreement with a private sector firm or firms, and where the  private sector provides transportation services such as designing,  constructing, operating, and maintaining the facility, usually for an  extended period of time. This definition included long-term concessions  for toll roads in which the private sector firm(s) receives some or all toll  revenues over the life of the lease or concession agreement with the public  sector. There are numerous other types of arrangements classified as  “public-private partnerships” that we did not include. For example, we did  not include fee-for-service arrangements in which effective ownership of a  transportation facility does not transfer to the private sector. We also  recognize that there may be other forms of highway public-private  partnerships. We did not include these types of public-private partnerships  in the scope of our work, and the findings and conclusions of our work  cannot be extrapolated to those or other types of public-private  partnerships.
Highway public-private partnerships have resulted in advantages for state  and local governments, such as obtaining new facilities and value from  existing facilities without using public funding. The public can potentially  obtain other benefits, such as sharing risks with the private sector, more  efficient operations and management of facilities, and, through the use of  tolling, increased mobility and more cost-effective investment decisions.  There are also potential costs and trade-offs. There is no “free” money in  public-private partnerships. They are potentially more costly to the public  and it is likely that tolls on a privately operated highway will increase to a  greater extent than they would on a publicly operated toll road. There is  also the risk of tolls being set that exceed the costs of the facility,  including a reasonable rate of return, should a private concessionaire gain  market power because of the lack of viable travel alternatives. There are  also financial trade-offs. Unlike public toll authorities, the private sector  pays federal income taxes and can deduct depreciation on assets for  which they have effective ownership for tax purposes. The extent of these  deductions and the amount of the foregone revenue, if any, to the federal  government is difficult to determine. Obtaining these deductions may also  require lengthy concession periods. According to experts involved in the  lease of the Chicago Skyway and the Indiana Toll Road, demonstrating  effective ownership contributed to the 99-year and 75-year concession  terms for the two facilities, respectively. Financial experts also told us that  in the absence of the depreciation benefit, the concession payments to  Chicago and Indiana would likely have been less than the $1.8 billion and  $3.8 billion, respectively.
Highway public-private partnerships in the U.S. we have reviewed sought  to protect the public interest largely through concession agreement terms  prescribing performance and other standards. While these protections are  important, governments in other countries, including Australia and the  United Kingdom, have developed systematic approaches to identifying and  evaluating public interest before agreements are entered into, including  the use of public interest criteria, as well as assessment tools, and require  their use when considering private investments in public infrastructure.  For example, a state government in Australia uses a public interest test to  determine how the public interest would be affected in eight specific  areas, including whether the views and rights of affected communities  have been heard and protected and whether the process is sufficiently  transparent. While similar tools have been used to some extent in the  United States, their use has been more limited. Using up-front public  interest analysis tools can also assist public agencies in determining the  expected benefits and costs of a project and an appropriate means to  deliver the project. Not using such tools may lead to certain aspects of  protecting the public interest being overlooked.
Direct federal involvement in highway public-private partnerships has  generally been limited to projects in which federal requirements must be  followed because federal funds have or will be used. While direct federal  involvement has been limited, the Department of Transportation (DOT)  has done much to promote highway public-private partnerships, but  comparatively little to either assist states and localities in weighing  potential costs and trade-offs, or to assess how potentially important  national interests might be protected in such arrangements. Given the  minimal federal funding in highway public-private partnerships to date,  little consideration has been given to potential national public interests in  them. Highway public-private partnerships may pose national public  interest implications such as interstate commerce that transcend whether  there is direct federal investment in a project. The historic test of the  presence of federal funding may have been relevant at a time when the  federal government played a larger role in financing highways but may no  longer be relevant when there are new players and multiple sources of  financing, including potentially significant private money. We have called  for a fundamental reexamination of federal programs to address emerging  needs and test the relevance of existing policies. Such a reexamination  provides an opportunity to identify emerging national public interests  (including tax considerations), the role of highway public-private  partnerships in supporting and furthering those national interests, and  how best to identify and protect national public interests in future public- private partnerships. We believe DOT has the opportunity to play a  targeted role in ensuring that national interests are considered, as  appropriate, and have suggested that Congress consider directing the  Secretary of Transportation to develop and submit objective criteria for  identifying national public interests in highway public-private  partnerships, including any additional legal authority, guidance, or  assessment tools that would be appropriately required. We recognize this  is no easy task—any potential federal restrictions on highway public- private partnerships must be carefully crafted to avoid undermining the  potential benefits that can be achieved.
subsections: section_title: Highway Public- Private Partnerships Can Potentially Provide Benefits but Also Entail Costs, Risks, and Trade-offs
paragraphs: Highway public-private partnerships have the potential to provide  numerous benefits to the public sector. There are also potential costs and  trade-offs.
subsections: section_title: Potential Benefits
paragraphs: Highway public-private partnerships created to date have resulted in  advantages from the perspective of state and local governments, such as  the construction of new infrastructure without using public funding and  obtaining funds by extracting value from existing facilities for  reinvestment in transportation and other public programs. For example,  the state of Indiana received $3.8 billion from leasing the Indiana Toll  Road and used those proceeds to fund a 10-year statewide transportation  plan. As we reported in 2004, by relying on private-sector sponsorship and  investment to build roads rather than financing the construction  themselves, states (1) conserve funding from their highway capital  improvement programs for other projects, (2) avoid the up-front costs of  borrowing needed to bridge the gap until toll collections became sufficient  to pay for the cost of building the roads and paying the interest on the  borrowed funds, and (3) avoid the legislative or administrative limits that  govern the amount of outstanding debt these states are allowed to have.  All of these results are advantages for the states.
Highway public-private partnerships potentially provide other benefits,  including the transfer or sharing of project risks to the private sector. Such  risks include those associated with construction costs and schedules and  having sufficient levels of traffic and revenues to be financially viable.  Various government officials told us that because the private sector more  reliably analyzes its costs, revenues, and risks throughout the life cycle of  a project and adheres to scheduled toll increases, it is able to accept large  amounts of risk at the outset of a project, although the private sector  prices all project risks and bases its final bid proposal, in part, on the level  of risk involved. In addition, the public sector can potentially benefit from  increased efficiencies in operations and life-cycle management, such as  increased use of innovative technologies.
Highway public-private partnerships can also potentially provide mobility  and other benefits to the public sector, through the use of tolling. The  highway public-private partnerships we reviewed all involved toll roads.  These benefits include better pricing of infrastructure to reflect the true  costs of operating and maintaining the facility and thus improved  condition and performance of public infrastructure, as well as the  potential for more cost effective investment decisions by private investors.  In addition, through congestion pricing, tolls can be set to vary during  congested periods to maintain a predetermined level of service, creating  incentives for drivers to consider costs when making their driving  decisions, and potentially reducing the demand for roads during peak  hours.
section_title: Potential Costs, Risks, and Trade-offs
paragraphs: Although highway public-private partnerships can be used to obtain  financing for highway infrastructure without the use of public sector  funding, there is no “free money” in highway public-private partnerships.
Rather, this funding is a form of privately issued debt that must be repaid.  Private concessionaires primarily make a return on their investment by  collecting toll revenues. Though concession agreements can limit the  extent to which a concessionaire can raise tolls, it is likely that tolls will  increase on a privately operated highway to a greater extent than they  would on a publicly run toll road. Tolls are generally set in accordance  with concession agreements and, in contrast to public-sector practices,  allowable toll increases can be frequent and automatic. The public sector  may lose control over its ability to influence toll rates, and there is also the  risk of tolls being set that exceed the costs of the facility, including a  reasonable rate of return if, for example, a private concessionaire gains  market power because of the lack of viable travel alternatives. In addition,  highway public-private partnerships also potentially require additional  costs to the public sector compared with traditional public procurement,  including the costs associated with (1) required financial and legal  advisors, and (2) private-sector financing compared with public-sector  financing.
In addition to potentially higher tolls, the public sector may give up more  than it receives in a concession payment in using a highway public-private  partnership with a focus on extracting value from an existing facility. In  exchange for an up-front concession payment, the public sector gives up  control over a future stream of toll revenues over an extended period of  time, such as 75 or 99 years. It is possible that the net present value of the  future stream of toll revenues (less operating and capital costs) given up  can be much larger than the concession payment received. Concession  payments could potentially be less than they could or should be.  Conversely, because the private sector takes on substantial risks, the  opposite could also be true—that is, the public sector might gain more  than it gives up.
Using a highway public-private partnership to extract value from an  existing facility also raises issues about the use of those proceeds and  whether future users might potentially pay higher tolls to support current  benefits. In some instances, up-front payments have been used for  immediate needs, and it remains to be seen whether these uses provide  long-term benefits to future generations who will potentially be paying  progressively higher toll rates to the private sector throughout the length  of a concession agreement. Both Chicago and Indiana used their lease  fees, in part, to fund immediate financial needs. Both also established  long-term reserves from the lease proceeds. Conversely, proceeds from  the lease of Highway 407 ETR in Toronto, Canada, went into the  province’s general revenue fund.
subsections: section_title: Financial Trade-offs
paragraphs: Trade-offs from the public perspective can also be financial, as highway  public-private partnerships have implications for federal tax policy.  Private firms generally do not realize profits in the first 10 to 15 years of a  concession agreement. However, the private sector receives benefits from  highway public-private partnerships over the term of a concession in the  form of a return on its investment. Private-sector investors generally  finance large public-sector benefits early in a concession period, including  up-front payments for leases of existing projects or capital outlays for the  construction of new, large-scale transportation projects. In return, the  private sector expects to recover any and all up-front costs, as well as  ongoing maintenance and operation costs, and generate a return on  investment. Furthermore, any cost savings or operational efficiencies the  private sector can generate, such as introducing electronic tolling,  improving maintenance practices, or increasing customer satisfaction in  other ways, can further boost the return on investment through increased  traffic flow and increased toll revenue.
Unlike public toll authorities, private-sector firms pay federal income tax.  Current tax law allows private sector firms to deduct depreciation on  assets involved with highway public-private partnerships for which they  have “effective ownership.” Effective ownership of assets requires, among  other things, that the length of a concession agreement be equal to or  greater than the useful economic life of the asset. According to financial  and legal experts, including those who were involved in the lease of the  Chicago Skyway in Chicago, Illinois, and the Indiana Toll Road, the useful  economic life of those facilities was lengthy. The requirement to  demonstrate effective asset ownership thus required lengthy partnership  concession periods and contributed to the 99-year and 75-year concession  terms for the Chicago Skyway and Indiana Toll Road, respectively. These  financial and legal experts told us that as effective owners, the private  investors can claim full tax deductions for asset depreciation within the  first 15 years of the lease agreements.
Determining the extent of depreciation deductions associated with  highway public-private partnerships, and the extent of foregone revenue to  the federal government, if any, from these deductions is difficult to  determine because they depend on such factors as taxable income, total  deductions, and marginal tax rates of private-sector entities involved with  highway public-private partnerships. Financial experts told us that in the  absence of the depreciation benefit, the concession payments to Chicago  and Indiana would likely have been less than the $1.8 billion and $3.8  billion paid, respectively.
However, foregone revenue to the federal government from tax benefits  associated with transportation projects can potentially amount to millions  of dollars. For example, as we reported in 2004, foregone tax revenue  when the private-sector used tax-exempt bonds to finance three projects  with private sector involvement—the Pocahontas Parkway, Southern  Connector, and Las Vegas Monorail—were between $25 million and $35  million.
section_title: Highway Public- Private Partnerships Have Sought to Protect Public Interest in Many Ways, but Use of Public Interest Criteria Is Mixed in the United States
paragraphs: The public interest in highway public-private partnerships can and has  been considered and protected in many ways. State and local officials in  the U.S. projects we reviewed heavily relied on concession terms. Most  often, these terms were focused on, among other things, ensuring  performance of the asset, dealing with financial issues, and maintaining  the public sector’s accountability and flexibility. Included in the  protections we found in agreements we reviewed were:    Operating and maintenance standards: These standards are put in place to  ensure that the performance of the asset is upheld to high safety,  maintenance, and operational standards and can be expanded when  necessary. For example, based on documents we reviewed, the standards  on the Indiana Toll Road require the concessionaire to maintain the road’s  condition, utility, and level of safety including a wide range of roadway  issues, such as signage, use of safety features such as barrier walls, snow  and ice removal, and the level of pavement smoothness that must be  maintained.
Expansion trigger requirements: These triggers require that a  concessionaire expand a facility once congestion reaches a certain level.  Some agreements can be based on forecasts. For example, on the Indiana  Toll Road, when service is forecasted to fall below certain levels within 7  years, the concessionaire must act to improve service, such as by adding  additional capacity at its own cost.
Revenue-sharing mechanisms: These mechanisms require a concessionaire  to share some level of revenues with the public sector. For example, on  one Texas project, if the annual return on investment of the private  concessionaire is at or below 11 percent, then the state could share in 5  percent of all revenues. If it is over 15 percent, the state could receive as  much as 50 percent of the net revenues.
While these protections are important, governments in other countries,  including Australia and the United Kingdom, have developed systematic  approaches to identifying and evaluating public interest before agreements  are entered into, including the use of public interest criteria, as well as  assessment tools, and require their use when considering private  investments in public infrastructure. These tools include the use of  qualitative public interest tests and criteria to consider when entering into  public-private partnerships. For example, a state government in Australia  uses a public interest test to determine how the public interest would be  affected in eight specific areas, including whether the views and rights of  affected communities have been heard and protected and whether the  process is sufficiently transparent. These tools also include quantitative  tests such as Value for Money and public sector comparators, which are  used to evaluate if entering into a project as a public-private partnership is  the best procurement option available.
While similar tools have been used to some extent in the United States,  their use has been more limited. For example, Oregon hired a consultant  to develop public-sector comparators to compare the estimated costs of a  proposed highway public-private partnership with a model of the public  sector’s undertaking the project. According to the Innovative Partnerships  Project Director in the Oregon DOT, the results of this model were used to  determine that the added costs of undertaking the project as a public- private partnership (given the need for a return on investment by the  private investors) were not justifiable given the limited value of risk  transfer in the project. While this study was conducted before the project  was put out for official concession, it was prepared after substantial early  development work was done by private partners. Neither Chicago nor  Indiana had developed public interest tests or other tools prior to the  leasing of the Chicago Skyway or the Indiana Toll Road.
Using up-front public interest analysis tools can assist public agencies in  determining the expected benefits and costs of a project and an  appropriate means to undertake the project. Not using such tools may lead  to certain aspects of protecting public interest being overlooked. For  example, concerns by local and regional governments in Texas helped  drive statewide legislation requiring the state to involve local and regional  governments to a greater extent in future highway public-private  partnerships. Elsewhere, in Toronto, Canada, the lack of a transparency  about the toll rate structure and misunderstanding about the toll structure  of the Highway 407 ETR facility was a major factor in significant  opposition to the project.
section_title: Direct Federal Involvement with Highway Public- Private Partnerships Has Generally Been Limited, but Identification of National Interests in Highway Public- Private Partnerships Has Been Lacking
paragraphs: Direct federal involvement in highway public-private partnerships has  generally been limited to projects in which federal requirements must be  followed because federal funds have or will be used. At the time of our  February 2008 report, minimal federal funding has been used in highway  public-private partnerships. While direct federal involvement has been  limited, the administration and the DOT have actively promoted highway  public-private partnerships through policies and practices, including the  development of experimental programs that waive certain federal  regulations and encourage private investment. For example, until August  2007, federal regulations did not allow private contractors to be involved  in highway contracts with a state department of transportation until after  the federally mandated environmental review process had been  completed. Texas applied for a waiver to allow its private contractor to  start drafting a comprehensive development plan to guide decisions about  the future of the corridor before its federal environmental review was  complete. These flexibilities were pivotal to allowing highway public- private partnership arrangements in both Texas and Oregon to go forward  while remaining eligible for federal funds. The Federal Highway  Administration (FHWA) and DOT also promoted highway public-private  partnerships by developing publications to educate state transportation  officials about highway public-private partnerships and to promote their  use, drafting model legislation for states to consider to enable highway  public-private partnerships in their states, creating a public-private  partnership Internet Web site, and making tolling a key component of  DOT’s congestion mitigation initiatives.
Recent highway public-private partnerships have involved sizable  investments of funds and significant facilities and could pose national  public interest implications such as interstate commerce that may  transcend whether there is direct federal investment in a project. For  example, both the Chicago Skyway and the Indiana Toll Road are part of  the Interstate Highway System; the Indiana Toll Road is part of the most  direct highway route between Chicago and New York City and, according  to one study, over 60 percent of its traffic is interstate in nature. However,  federal officials had little involvement in reviewing the terms of either of  these concession agreements before they were signed. In the case of  Indiana, FHWA played no role in reviewing either the lease or national  public interests associated with leasing the highway, nor did it require the  state of Indiana to review these interests. Texas envisions constructing  new international border crossings and freight corridors using highway  public-private partnerships, which may greatly facilitate North American  Free Trade Agreement-related truck traffic to other states. However, no  federal funding had been expended in the development of the project.  Given the minimal federal funding in highway public-private partnerships  to date, few mechanisms exist to consider potential national public  interests in them. For example, FHWA officials told us that no federal  definition of public interest or federal guidance on identifying and  evaluating public interest exists.
The absence of a clear identification and furtherance of national public  interests in the national transportation system is not unique to highway  public-private partnerships. We have called for a fundamental  reexamination of the nations surface transportation policies, including  creating well-defined goals based on identified areas of national interest,  incorporating performance and accountability into funding decisions, and  more clearly defining the role of the federal government as well as the  roles of state and local governments, regional entities, and the private  sector. Such a reexamination provides an opportunity to identify emerging  national public interests (including tax considerations), the role of the  highway public-private partnerships in supporting and furthering those  national interests, and how best to identify and protect national public  interests in future public-private partnerships.
section_title: Concluding Observations
paragraphs: Highway public-private partnerships show promise as a viable alternative,  where appropriate, to help meet growing and costly transportation  demands. The public sector can acquire new infrastructure or extract  value from existing infrastructure while potentially sharing with the  private sector the risks associated with designing, constructing, operating,  and maintaining public infrastructure. However, highway public-private  partnerships are not a panacea for meeting all transportation system  demands, nor are they without potentially substantial costs and risks to  the public—both financial and nonfinancial—and trade-offs must be made.
Highway public-private partnerships are fairly new in the United States,  and, although they are meant to serve the public interest, it is difficult to  be confident that these interests are being protected when formal  identification and consideration of public and national interests has been  lacking, and where limited up-front analysis of public interest issues using  established criteria has been conducted. Consideration of highway public- private partnerships could benefit from more consistent, rigorous,  systematic, up-front analysis. Benefits are potential benefits—that is, they  are not assured and can only be achieved by weighing them against  potential costs and trade-offs through careful, comprehensive analysis to  determine whether public-private partnerships are appropriate in specific  circumstances and, if so, how best to implement them.
Despite the need for careful analysis, the approach at the federal level has  not been fully balanced, as DOT has done much to promote the benefits,  but comparatively little to either assist states and localities weigh potential  costs and trade-offs, nor to assess how potentially important national  interests might be protected in highway public-private partnerships. We  have suggested that Congress consider directing the Secretary of  Transportation to develop and submit objective criteria for identifying  national public interests in highway public-private partnerships, including  any additional legal authority, guidance, or assessment tools that would be  appropriately required. We are pleased to note that in a recent testimony  before the House, the Secretary indicated a willingness to begin  developing such criteria. This is no easy task, however. The recent report  by the National Surface Transportation Policy and Revenue Study  Commission illustrates the challenges of identifying national public  interests as the Policy Commission’s recommendations for future  restrictions—including limiting allowable toll increases and requiring  concessionaires to share revenues with the public sector—stood in sharp  contrast to the dissenting views of three commissioners. We believe any  potential federal restrictions on highway public-private partnerships must  be carefully crafted to avoid undermining the potential benefits that can be  achieved. Reexamining the federal role in transportation provides an  opportunity for DOT, we believe, to play a targeted role in ensuring that  national interests are considered, as appropriate.
Mr. Chairman, this concludes my prepared statement. I would be pleased  to respond to any questions that you or other Members of the  Subcommittee might have.
section_title: GAO Contact and Staff Acknowledgment
paragraphs: For further information on this statement, please contact JayEtta Z.  Hecker at (202) 512-2834 or heckerj@gao.gov. Individuals making key  contributions to this testimony were Steve Cohen (Assistant Director),  Bert Japikse, Richard Jorgenson, Carol Henn, Matthew Rosenberg, and  James White.
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