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Administration seeks transparency for new partnerships

ANNAPOLIS — Legislation creating rules of the road for public-private partnerships in Maryland would create a predictable and transparent process for awarding such contracts, according to Lt. Gov. Anthony Brown.

Brown, along with Transportation Secretary Beverley Swaim-Staley and a dozen supporters, testified before the Environmental Matters Committee and members of the Appropriations Committee on the merits of House Bill 576, which seeks to establish policy that would govern so-called public-private partnerships, or P3s.

The bill would exempt public-private partnerships from traditional procurement law and create a process by which the state comptroller, treasurer, specified legislative committees and the Department of Legislative Services have 45 days to review such a project proposal before a state agency seeks bids from private companies. A summary of the project would also have to be posted online.

“Its only goal is to provide the state with an alternative vehicle to finance development,” Brown testified Friday. “It’s a very focused bill.”

As written, the bill would not change any law that governs the state’s traditional procurement process, Brown said. Instead, the spirit of the legislation is to shore up the process by which public-private partnerships are advertised and awarded to companies.

A much-disputed public-private partnership to renovate two travel plazas on Interstate 95 in Harford and Cecil counties sought by the Maryland Department of Transportation has led to a lawsuit from a loser in the bidding process, Bethesda-based HMSHost. Areas USA Inc. is alleged to have received an unfair advantage in the process, and a hearing is scheduled for March 7 in Montgomery County Circuit Court.

“What the bill does is clarify the approval process,” Swaim-Staley said.

Rick Norment, executive director of the National Council for Public-Private Partnerships, said the legislation would allow Maryland to more effectively take part in what he called a “national trend.”

“This bill provides a supplement to your current procurement procedures,” Norment said. “This is not revolutionary … this is something that has a tried-and-true practice.”

Public-private partnerships allow states to leverage the technical expertise of private companies, while sharing in the financial risk of a development project, Norment said. In the partnerships, the private company provides funding and then also takes responsibility for maintenance and operation for a period not to exceed 50 years. All the while, the state retains ownership of the development.

Brown, the lieutenant governor, said anywhere from “6 to 10 percent” of state infrastructure projects could benefit from public-private partnerships, creating as many 4,000 permanent or temporary jobs.

He did not have specific projects in mind that could benefit from public-private partnerships. But, he said state agencies have been asked to begin identifying projects that made sense for such an agreement, with transportation projects taking the lion’s share.

While not every transportation project calls for the partnership, Swaim-Staley said such Requests for Proposal would be saved for “special projects,” with price tags potentially in the tens of millions of dollars.

“We have the potential to create thousands of jobs laying the foundation for long-term economic growth,” Brown said.