Monday, November 28, 2005

When Corporations Build the City "Public-Private Partnerships" are all the rage these days. Municipal governments, strapped for cash and facing crumbling public infrastructure are increasingly looking to private companies to inject much-needed cash into re-development of roads, public transit and sewers.

While these arrangements may be convenient--or even unavoidable--for many municipalities, they demand intense public scrutiny given the fact that the financiers have their own interests to look after.

Australian MP Malcolm Turnbull has an interesting op-ed piece in the Sydney newspaper, The Age that mentions the new 2.1km Cross City Tunnel that runs under Sydney's central business district. The Tunnel was built and financed by CrossCity Motorway which will own and operate the tunnel for 30 years. Apparently, in negotiating the deal, the government of New South Wales may have struck an unpublicized agreement with the developer to insure that they receive a healthy return on their investment.

Turnbull alleges that the government is ignoring other remedies for reducing congestion and increasing mobility in order to guarantee that people's only option for getting around Sydney's CBD is to take the Cross City Tunnel, giving CrossCity Motorway a good chance for reaping large profits at the public's expense.

The New South Wales Independent Commission Against Corruption is set to investigate emerging claims of wrongdoing, so the story is far from over. For urbanists, this example should make us extremely skeptical about private involvement in providing essential components of the public infrastructure.

Many Sydney bloggers offer more information on the situation: The Pigs Are Flying, Modia Miontaur, Spleenie's Rant.