Bills Fixing Deficiencies in the Knik Arm Bridge Statute Introduced; Will Require Public Comment and a Legislative Vote on the Public-Private Partnership Contract

Anchorage, AK - Recognizing the bare-bones nature of the existing Knik Arm Bridge and Toll Authority's authorizing statute, Alaska Senator and Majority Leader Johnny Ellis and Representative Les Gara today introduced common-sense amendments to the law covering the toll authority.  The amendments in SB 268 and HB 365 ensure that the public has the opportunity to comment – and the legislature will vote – on any contract with private investors for the proposed $600 million to $1+ billion toll bridge across Knik Arm that would connect Anchorage to an undeveloped part of the Mat-Su Borough.  Additionally, the bill requires that bridge toll increases will be inflation-based.

The Knik Arm Bridge and Toll Authority (KABATA), a state agency, was created by the Alaska legislature in AS 19.75 in 2003.  KABATA, which is holding a board meeting today in Juneau, currently is negotiating with two foreign investors – Macquarie Bank of Australia and Bouygues Travaux Public of France – on the terms the private investor must meet to receive the bridge's toll revenue as part of a "public-private partnership" agreement.  One of these investors will win a 55-year contract from KABATA to build and operate the proposed bridge at a profit, similar to the arrangement the state plans to reach with a North Slope natural gas pipeline builder/operator.  The Alaska Gasline Inducement Act (AGIA), however, includes public comment and a legislative vote on the gasline license while the KABATA statute does not include such provisions for its contract with the bridge builder/operator. The current KABATA statute only allows public (and legislative) review of the contract after KABATA has issued its notice of intent to award a contract.

The toll increase provisions in SB 268 and HB 365 will avoid problems experienced by Virginia which did not include adequate toll increase language in its public-private partnership statute. As a result, toll increases in Virginia have been both unpredictable and large, resulting in increases that adversely impact commuters' finances and place traffic on nearby roads.

"HB 365 provides the necessary checks and balances on the Knik Arm Bridge and Toll Authority's contract negotiations with private investors. Without these changes to the KABATA statute, KABATA may not sufficiently protect the interests of the State of Alaska and the affected communities in its public-private partnership contract," stated Lois Epstein, Director of the Alaska Transportation Priorities Project, a non-profit, statewide transportation watchdog organization.

"Private investors naturally are looking for the best deal possible, but the state needs to protect its long-term financial interest" said Steve Cleary, Director of the Alaska Public Interest Research Group, a
consumer watchdog organization. "The best way to protect state and local interests is to require that the public-private partnership agreement process be open, transparent, and accountable."

"Since our grandchildren will be forced to live with KABATA's contract terms, the public and the legislature needs to have input into the contract before it's final," said Bob French, Anchorage’s Government Hill Community Council KABATA Committee Co-Chair.

Download Press Release, February 13th, 2008 (MS Word format, 221k)

Read the bills: SB268  HB365

Read related Anchorage Daily News coverage: February 14th and February 16th