Rebuilding the East Coast after Superstorm Sandy will be an expensive proposition. A new estimate of the cost of the storm now reaches $50 billion, and just protecting New York City from future disasters through the use of a seawall and other barriers would tack on another $15 billion, though that money would be as well spent as any you can devise. (It would also make far more economic sense than a campaign to “fix the debt”).
But anyone who watches the underrated HBO series Treme understands that, in the aftermath of a life-changing event like a hurricane and flood, the shock doctrine starts to factor in. All of a sudden, developers see their chance to hollow out the undergrowth and remake cities and towns in an image that means more private profits for them. We’re already starting to see talk of this in places like the Philly Inquirer:
Rebuilding the shattered Shore and the swamped New York tunnels, along with badly needed updates to the Northeast’s exhausted roads and rails, will be an opportunity to implement streamlined construction laws backed by Republicans and pro-business Democrats in Congress and the states, says Frank Rapoport, Berwyn-based partner at New York law firm McKenna Long & Aldridge L.L.P., and counselor to contractors who support “public-private partnerships” (P3).
That’s a label for a group of strategies that replace lengthy government-led construction with private contractors and financiers, financed by “sharing” user fees – like road tolls – once the project is built, instead of borrowing money and charging taxpayers….
P3 funding – which Corbett’s predecessor, Democrat Ed Rendell, also supported and has continued to champion in his part-time retirement gig as an investment banker for Greenhill & Co. – is coming along “just in time” to aid in Sandy reconstruction, Rapoport says. Virginia is pushing a high-profile, privately run, toll-funded expansion of I-495 that P3 backers call a model. Pennsylvania “is following Virginia and Texas” in pushing privately run public projects, he added. Cash-strapped Puerto Rico is using P3 projects “for everything from bridges to schools.
The right-wing governors in Pennsylvania and New Jersey and the pro-business New Democrat Andrew Cuomo in New York will be all too happy to facilitate privatization in these projects. There could be billions of dollars sloshing around in these different projects. Chris Christie is already talking about a “faster storm recovery”, which includes taking a week of vacation away from public schools. No word yet on selling public infrastructure, but that’s probably on the menu.
Yves Smith notes that these deals, which government seek to quickly fill gaps in their funding, often come with hidden implications that ramp up the costs. They should be entered into, if at all, with the utmost scrutiny. But emergency response tends to put the focus on speed over diligence.