As public funds decrease, Cezary Podkul discusses why infrastructure projects are shifting to the private sector.
When the city of Chesapeake, Va., considered closing a crumbling, 80-year-old bridge over the Elizabeth River in 2008, local officials knew that neither the state nor the federal government would pay for a replacement. Just tearing down the old one would cost millions of dollars. So they sold it.
“We paid them $10,” said Bob Hellman, one of the investors, but “what we gave them wasn't just $10.”
Hellman's investors group, American Bridge Partners, agreed to remove the old bridge — and to build a brand-new one, solely with private money. Tolls of about $2 a trip, up from the old 75-cent fee, will pay back the company's $130 million investment in the new South Norfolk Jordan Bridge, due to open in the spring.