Proponents are hopeful that Maryland will expand public-private partnerships on state infrastructure and facilities, with the state House of Delegates' March 26 vote to approve a bill authorizing use of private financing.
The bill now goes to the state Senate. Gov. Martin O’Malley (D) , who supports infrastructure privatization, will likely sign the measure if it clears the legislature, which is set to adjourn on April 9. Separate legislation authorizing development of an offshore wind farm also is set for a House vote by week's end.
The P3 bill would authorize the Maryland Dept. of General Services to use P3s for design, construction, operation and maintenance of transportation, transit systems, ports, hospitals, courthouses, schools, and other state-owned assets, which would be leased to private partners for up to 50 years. State agencies would also be allowed to consider unsolicited proposals.
Expanded use of P3s could contribute up as much as $315 million, or 10%, of Maryland’s $3.1 billion annual capital budget, according to the governor’s office.
Currently, only agencies of the Maryland Transportation Dept. have P3 procurement authority. In early March, the state Transportation Authority finalized a 35-year, $400-million agreement with Spanish-owned Areas USA to redevelop and operate two large travel plazas along I-95/John F. Kennedy Memorial Highway toll road in northeast Maryland.
Ports America began a 50-year contract to operate the 1.0 million-TEU Seagirt Marine Terminal for the state-owned Port of Baltimore in January 2010. The company is currently building a 50-foot container berth that will be serviced by four super Post Panamax cranes.
While P3 legislation in other states has come under fire by organized labor, Maryland’s bill has garnered union support by including a requirement that P3 employees be paid “living wages,” and ensuring the involvement of minority-owned businesses.
The legislation also gives the state broad negotiating power, expedites the start-up of a P3 once a deal is finalized and limits the window for such agreements to be challenged in court.
Opponents have criticized these and other aspects that would circumvent current safeguards against corruption and unfair procurement. They also worry that the bill would free the state from complying with recent court rulings ordering the release of documents regarding the controversial $1.5-billion, 28-acre State Center P3 redevelopment project in downtown Baltimore.
Another construction-related measure—a plan to develop a wind farm using an offshore wind renewable energy credit (OREC)—received the endorsement of the House Economic Matters Committee. To be located about 11 miles east of Ocean City, the 40-turbine wind farm would be built over five years and produce up to 200 MW annually when operations are set to begin in 2017.
That same year, Maryland residents and businesses would start contributing to the facility’s operational costs via a monthly surcharge to their electric bills. The surcharge would be collected for 20 years.
Because a similar proposal failed last year, the O’Malley administration scaled back both the proposal and surcharge amount in order to gain the committee’s backing. Proponents have expressed hope that approval by the House in a vote scheduled for later this week will help the measure overcome opposition in the Senate.