Earlier this month, The Wall Street Journal ran an article about the state engineers’ lawsuit over the Presidio Parkway’s public-private partnership with Germany-based HOCHTIEF Concessions (which includes subsidiary Flatiron). This is hardly a surprise, since the 9,000-member Professional Engineers in California Government (PECG) has been opposed to P3s from the get-go. Problem is, the lawsuit, if it proceeds, would tie up the project for the foreseeable future, affecting the 13,000 jobs the Doyle Drive rebuild would create.

As we’ve reported before, the P3 plan for some state transportation projects came about after the passage last year of state Senate Bill XX4, an amendment to the state Streets and Highways Code. The governor gave a thumbs up to the plan and says P3s are a way to build projects “more efficiently and achieve faster delivery while transferring risk to the private sector and reducing overall project costs.”

But PECG says that the P3 conversion of the project “abandons competitive bidding, doubles the cost of the project, denies 58 counties money to build local projects and create jobs and piles millions of dollars in new debt on California taxpayers.”

PECG adds that doing the $1-billion project in the competitively-bid contract way almost guarantees that bids would come in considerably under estimates, which is happening, of course, throughout the country during the economic downturn.

There are good arguments for and against a P3 for the second phase of the Presidio Parkway project. The big question is: Can P3s work in this country?

The Bay Area Council says that "we can’t afford to let this project be derailed because of the considerable seismic risk of not repairing the 1.6-mi span, but also because the lawsuit may affect P3 investments all across the country if the union prevails.”

Paul Meyer, executive director of the American Council of Engineering Cos. California, says that PECG “is now alleging that the work will go ‘overseas.’”  

“That is pure smokescreen with no basis in fact,” he says. “PECG’s real motivation is to prevent Caltrans and the San Francisco Transportation Authority from using private-sector engineering firms located in California from working on and speeding up delivery of this badly needed project.

“What PECG does not say is that engineers—who are licensed by the state of California and who live and work and pay taxes in California—will design this project, and furthermore that skilled workers who live and work and pay taxes in California will construct this project.”

And the kicker to this whole lawsuit is that it will cost a bunch of money to litigate it, basically wasting taxpayers’ money. Of course, as you know, California is already in the hole with a $25-billion deficit for the coming fiscal year, so wasting money that’s hard to find in the first place is the real challenge.