Traditionally, public works projects in the United States are financed and operated by the government. In recent years, budgetary shortfalls plaguing many state and local governments have prompted them to look to private companies in order to fund and operate new development projects.

The practice of privatizing public projects, known as Build-Operate-Transfer (BOT) projects, runs like this: a local government sees the need for a new or improved transportation infrastructure, hospital, school, or health care program and offers the contract to private developers or financiers.  Working with government officials, the private company funds and oversees the development project.  Following project completion, the sponsor enters a "concession" period in which they operate and maintain the new structure and recoup expenses. 

Though BOT has long been popular in countries whose governments can't afford large-scale public works projects, it has only recently become common practice in the United States, mostly in the transportation industry. One example is the Las Vegas Monorail, which is operated by the Las Vegas Monorail Company - a private firm that recoups their expenses through ticket revenues. Though the city benefits from the services provided by the transit system, it has no hand in the railway's operation.

In Southern California, the South Bay Expressway is operated and owned by a combination of private and public agencies. Even New York's Central Park is operated by a private not-for-profit company.

The main advantage of the BOT system is that if the government is unable to fund a needed public project, it can still be built without sapping the local treasury or levying higher taxes. Another advantage of BOT is that a given project's risk is put on the shoulders of the investing company; if an extravagant construction project proves unprofitable, the financier takes the hit. The private sponsor can only recoup their expenses through the project itself and not at the cost of the taxpayer at large, unlike some public works projects that weigh down the taxpayer for years when the local government is forced to settle its losses.

But BOT also has its problems, many of which are repeatedly highlighted by opponents of the practice. Privatization requires an abdication of power on the part of the government. Giving a private firm financial control of a project also gives them license to conduct their affairs as they see fit, not necessarily to the best interests of the public. Because many of the contracts are no-bid, the private sponsor is often free to gouge those who use their services, effectively annulling the economic benefits of free-market capitalism. Also, as the private sponsor dictates the project's direction, construction can be sluggish and inefficient.

Remember how long it took the contractor to complete your kitchen? Just be glad he wasn't building you a hospital.

While increased privatization might be written off as a sign of the times, many concerned citizens begin grumbling when foreign companies operate public projects. Recently, the management of the already constructed Chicago Skyway Toll Bridge was leased to Australian and Spanish companies for $1.83 billion for a period of 99 years, meaning that commuters' toll money will land in overseas pockets for the next century.  This same Spanish company, Cintra, has also taken hold of other U.S. road systems, specifically the Indiana East-West Toll Road and the planned Trans-Texas Corridor (TTC), a privately owned highway system composed of 4,000 miles of high-volume freeway space that includes a super-highway between the U.S. and Mexico.

According to Wendy Abrams, Public Information Officer of Chicago's Office of Budget and Management, the city's decision to lease out the Skyway was a matter of necessity rather than preference: "The reality is that the federal government no longer has the ability to provide the substantive financial assistance we need to keep our cities moving forward. As local governments are continually challenged to do more with less, we must find new and innovative ways to finance municipal projects and services."

Though many private firms were qualified to operate the Skyway, Cintra's bid was highest, and thus control of a domestic public works project landed in foreign hands, and domestic dollars in foreign pockets.

Critics of this kind of foreign privatization come from all regions of the political spectrum, from staunch conservatives along the lines of the John Birch society, to local citizens wary of foreign influence, to those concerned about the threat of terrorism at public sites at our nation's borders. For many, it is an issue of trust: why place our public works in the hands of those whose interests are purely financial?

Most controversial of the aforementioned foreign-controlled public projects is certainly the TTC, which has brought the public out in mass outcry and has some comparing the project to the Dubai Ports deal of 2006, in which operational control of 22 U.S. ports were sold to a United Arab Emirates company before legislation was passed forbidding the sale.

Terri Hall, Executive Director of Texans Uniting for Reform and Freedom (TURF), had this to say to OhMyGov! about the TTC: "[foreign privatization] essentially [allows] the government, in this case the State of Texas, to hand over its power to tax to a private entity without a public vote and without proper taxpayer protections...It allows a foreign company to exploit the government's unique power of eminent domain for its own personal profiteering.  A private company's primary purpose is profit, not the public interest."

So why has Uncle Sam allowed private companies - domestic or foreign - into the public works business? Should the U.S. be forced to acquiesce to private enterprise just to keep the trains running on time?

Certainly, private businesses run more efficiently than government bodies (for the most part).  And private funding eliminates the drain on taxpayers.  But in today's high-security world, it is irresponsible to hand over control of public projects to private organizations in exchange for a quick buck without extensive government oversight.  The FAA regulates privatized air travel; why shouldn't government bodies exist to regulate other aspects of privatized public works projects? The country was built upon a system of checks and balances; infusing that system into public works schemes is practical, necessary, and as American as apple pie. 

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