Governor John Hickenlooper recently spoke at The P3 Conference in Dallas, commenting on Colorado's business friendly environment and support for P3s and infrastructure development. He has been a supporter of P3s and the positive effects they've had on economic growth in the Rocky Mountain State. Colorado maintains that it is 'open for business' and seeks to attract industry to compete on its many projects. The legislature, however, is sending different signals through its introduction of SB-123. The state might not be as friendly as originally thought.
As written, the bill looks to amend an existing contract through legislation. AIAI is not alone in its opinion that it is never good policy to reopen exisiting, long-term P3 contracts that are under the management of state agencies. In this case CDOT, the Colorado Department of Transportation, is the responsible government entity.
While at first blush it may look that this issue is contract specific - the potential implications of the proposed bill can and will be far-reaching. AIAI's concern is the real cost on future programs. Changing contract terms after the fact through legislation creates a precedent and challenges the future for the business climate in general, and the P3 model specifically.
From a programmatic point of view, AIAI believes that any effort to reopen or revisit long-term P3 contractual terms after the fact will hinder future procurement decisions. Indeed, that appears to be a very harmful result of this proposal which could impact all P3 agreements in the state, now and in the future. In addition to the transponder issue, this year's proposal also includes an amendment which changes the date of implementation of HOV+2 to HOV+3. This is a prime example of how the bill would directly impact the financial performance of an existing contractual relationship between the state and its private partner, and most importantly, why AIAI opposes it from a programmatic point of view.
SB-123 would directly amend an existing contract - a deal that is already done. The result, if they are successful, would be a tremendous cost impact to the state: a compensation event that would ultimately harm the taxpayers.
AIAI's Government Affairs committee and Board of Directors are urging Colorado state legislators to oppose this bill and are encouraging all AIAI members to express their opposition to this bill as well.