Schwarzenegger proposes public-private partnerships for California infrastructure improvements

SACRAMENTO, CALIF.—In his State of the State 2008 address in December, California Governor Arnold Schwarzenegger proposed expanding the use of tools California can use to build, operate, and maintain its infrastructure, including public-private partnerships. "California must improve its infrastructure. The bonds approved by voters last year marked the first major investment in California’s infrastructure in decades, but the job is far from finished," said Schwarzenegger.

Schwarzenegger is proposing that California be permitted to broadly use what he called Performance Based Infrastructure (PBI)—commonly called public-private partnerships (P3)—when that method can help California build, operate, or maintain its infrastructure better, faster, or for less. Based on application of P3 in Europe, Canada, and Australia, Schwarzenegger estimated that PBI has the potential to provide about $75 billion to $100 billion of new infrastructure in California. (For more information on P3, see "Public-private partnerships: What’s old is new again.")

Schwarzenegger called on the state to pass legislation to expand the types of projects, services, and government entities that can enter into PBI arrangements; increase contracting flexibility so the state can better negotiate with potential contractors; and establish PBI California, a center for excellence to help determine which projects can benefit from PBI, represent the state in negotiations with PBI participants, ensure transparency, and monitor performance.

In addition, Schwarzenegger has proposed legislation to increase the speed and efficiency of transportation projects built with transportation funds, including Proposition 1B funds that are part of an infrastructure bond package approved by voters in 2006; and design-build legislation to ensure that projects using transportation funds can be delivered more quickly, saving taxpayer dollars.

More engineers
Citing projections of a shortfall of almost 40,000 engineers in California by 2014, Schwarzenegger also proposed bringing approximately 20,000 new engineers into the state’s workforce during the next decade. The Labor and Workforce Development Agency forecasts that California will need approximately 20,000 to 24,000 additional engineers educated in California to begin meeting the growing engineering needs of both the private and public sectors during the next decade.

Schwarzenegger’s proposals include the following:

• establish programs at the University of California (UC) and California State University (CSU) to expedite certification for veterans with engineering backgrounds to open up employment opportunities to the approximately 3,000 service members discharged to California each year who hold engineering-related military jobs;
• direct $1 million in federal Workforce Investment Act funds to develop new apprenticeship programs that partner private industry and California Community Colleges (CCC);
• launch the Engineering Education Council to bring more private funds into programs at UC, CSU, CCC, and other engineering programs to help move math and science students into the engineering field; and
• expand the statewide charter of High Tech High, a California charter school organization, to build out engineering-focused charter schools.

"California needs more engineers to achieve the improvements to our roads, schools, and other infrastructure that voters envisioned when they passed the Strategic Growth Plan bonds last year," said Schwarzenegger. "As my administration works to deliver these improvements better, faster, and for less through Performance Based Infrastructure, we must also ensure that our colleges and universities can attract and graduate the best and brightest engineers to build the Golden State."