Last month, the White House released details of President Obama's initiative to upgrade our national infrastructure, as first announced in the State of the Union. Naturally, the $50 billion program has been met with skepticism in Washington.
Of course, massive government investments in infrastructure during a time of budget cuts and sequestration sounds like pie in the sky. But as Washington cries poor, mayors and governors are showing a way forward, striking innovative public-private partnerships to rebuild our nation's highways and runways.
By any measure, our travel infrastructure lags behind that of our economic competitors. Take, for example, our aviation infrastructure, which ranks only 30th in the world, behind the likes of Panama and Bahrain. Our highest globally ranked airport comes in at 24th. The three major airports serving New York, where I proudly live and do business, are all ranked among the world's worst.
The implications for our economy are dire. Our aviation system causes cancellations and delays on the tarmac that cost our country billions in lost productivity. Delays at New York's major airports alone cost the region an annual $2.6 billion, and the cumulative impact could total $80 billion by 2025.
But the growing problem could cost our national economy billions more as millions of international travelers decide that the hassles of flying into the U.S. just aren't worth it and take their money and business to other countries.
The world is in the midst of a global travel boom led by the expanding middle classes of China, Brazil and India. More people than ever can now afford to visit our country and spend their money at our airports, shops and restaurants. But unless we act now to overhaul our aging infrastructure, we will miss out on the windfall of jobs and tax revenues that increased travel creates.
Fortunately, the government doesn't have to pay the full tab on many of these improvements. Private capital is ready to be invested in public infrastructure projects, and there is a way to use that money effectively.
Public-private partnerships are a proven and efficient means to the end we all seek. They create greater accountability and transparency, making sure investment decisions are based on long-term needs, not nearsighted policies. They introduce innovation and competition into the bidding and construction of infrastructure projects, while ensuring that they get completed on time and on budget, saving precious taxpayer dollars.
Adopting public-private partnerships could leverage the private sector's efficiencies while reducing public sector costs. Importantly, it will restore public confidence and bipartisan support for such projects at a time when both are a scarce commodity.
Despite the clear benefits of such partnerships, the U.S. still trails the rest of the world when it comes to leveraging them to finance large-scale projects. Nearly half of all public-private infrastructure partnerships are in Europe, while less than 10% are in the U.S.
To help the U.S. keep pace, government can play its part. Fewer than half of the states have legislation that allows public-private partnerships for transit projects. Only seven states have dedicated offices to tackle bottlenecks that often inhibit these projects.
While public-private partnerships are not right for all projects, they can be an effective solution for many. But without legislative authority and executive oversight, they can hardly get off the ground.
At the same time, we need political leaders with the courage and foresight to fight public misconceptions about public-private partnerships and help push them across the finish line. In addition to the benefits listed above, we can now point to powerful examples of cities and states that got it right.
In Denver, a public-private partnership is leading the financing, building, operation and maintenance of a new rail line that will speed travelers from the airport to downtown destinations. Originally led by a private investment firm, the partnership will save Colorado taxpayers $300 million through lower construction and operation costs. Moreover, it will deliver a state-of-the-art transit line far more quickly than if it had to rely only on public funds. That's a good deal for investors, and that's a good deal for the people of Denver.
Washington lawmakers should learn from Denver's model and encourage more creative approaches to addressing America's infrastructure challenge.
In unveiling the president's new initiative, the White House said that taxpayers should not "shoulder the whole burden" of rebuilding America's infrastructure. That's right. The private sector is ready, willing and able to partner with government to invest the right funds in the right places.
If we hope to make our infrastructure a competitive advantage for the 21st century, public-private partnerships are a path we must pursue.
Jonathan M. Tisch is chairman of Loews Hotels and chairman emeritus of the U.S. Travel Association.