Senate to consider testing privatized road maintenance

Monday, April 7, 2008 at 2:38am

A resolution is working its way through the state Legislature that urges the state to test the concept of privatized road maintenance.

But the Tennessee Road Builders Association is standing as an obstacle, fighting the idea.

Tomorrow, the House Transportation Committee considers the joint resolution requesting the Tennessee Department of Transportation to create a pilot project for what is called asset management.

With asset management, government establishes a long-term contract with a private company to handle such work as mowing, repair work, removal of dead animals and trash pick up.

Virginia and Florida are pioneers in the trend toward asset management, shifting that direction in an effort to cut costs amid tightening budgets.

Brentwood-based Infrastructure Corporation of America (ICA) has been a leader in the industry for the past several years, winning contracts in Virginia and Florida. The company is pushing for the resolution but ICA likely would have competition from Richmond, Va.-based Virginia Maintenance Services and Hazelton, Pa.-based DBi Services, two other major players in the industry.

“Tennessee is not unlike many other states and is facing tremendous challenges of how to do more with less,” said Butch Eley, ICA’s president. “This new approach has a proven track record now of being able to preserve our current infrastructure and stretch the maintenance dollar.”

The state’s road builders, though, don’t think the state needs to consider the concept.

Kent Starwalt, the road builders association’s executive vice president, said TDOT already has privatized contracts. The department does one-year contracts for maintenance such as repairing guardrails.

“If you don’t get the contract one year, you can come back a year later,” Starwalt said.

He said the contracts go to the lowest bidder each time while asset management contracts are awarded through a request for proposals process that doesn’t always mean lowest price.

With the low-bid competition, “you know you are getting the best price,” Starwalt said.

In Virginia, asset management contracts have been awarded through low-bid competitions, however.

According to presentations from the Florida Department of Transportation, the state will have contracts ranging from six to 10 years in length and total $929 million by July 28. The Sunshine State estimates $139 million in savings over the terms of those contracts.

“It’s an interesting concept but we don’t think it saves the money they say it will,” Starwalt said.

But the concept does have the eye of Gerald Nicely, TDOT’s commissioner. Nicely said the department had considered the idea a couple of years ago.

“I’m willing to look at it again,” he said.

Nicely said a pilot program would be appropriate in a select area initially.

“I don’t think it will solve all of our problems,” he said. “But we have to look at new ways of doing things.”

Nicely said the resolution, however, may not make it out of the state Senate.

Filed under: City Business
By: imdyinhere on 12/31/69 at 6:00

Socialize the costs, privatize the profits.