California mulls privatising highway rest stops

The privatisation is one of several options Will Kempton, the state’s director of transportation, is putting on the table as the state struggles with a $11.2bn budget shortfall.

The State of California is considering privatising its highway rest stops and other assets as it prepares to tackle a monumental budget shortfall of $11.2 billion in an emergency legislative session called by its governor, Arnold Schwarzenegger.

California rest stops: for

“We want to privatise our roadside rest areas. We have about 87 roadside rest areas across the state of California. We have not been able to maintain them to the standard that they should be maintained and we certainly have not been able to expand the system,” Will Kempton, the director of the California Department of Transportation, told delegates gathered at the California Infrastructure Summit in Anaheim.

The state's transportation department has applied for a federal permit to privatise highway rest stops along the state’s Interstate 5 highway, which would be the first part of the privatisation programme.

Rest stops might only be the beginning, though. Kempton also is a proponent of privatising the state’s fleet of changeable message signs along highways, as well as leasing roadside landscaping space to private companies to use as advertising.

The state Legislature is not supporting all these initiatives, though. 

“I got crucified by suggesting statewide that we ought to look at our changeable message signs and privatise [them] for advertisement that produces a revenue stream that we put back into the roads. We aren’t going to do anything that is unsafe, but the jury is still out on this point”, Kempton said.

“I have not seen any hard evidence or data to show that they would be a problem,” he added.

A similar revenue-raising idea, leasing the roadside landscaping rights to companies such as McDonald’s for advertising purposes, has a precedent in other countries. In Malta, government officials sold the landscaping rights to the Mediterranean island nation’s roundabouts to Environmental Landscapes Consortium in 2003. That transaction, though, was structured as a public private partnership, not as a privatisation of a state asset.

In California, the state’s legislature has yet to approve general enabling legislation for PPPs. Previous attempts to create such a law have been shot down by the state legislature three years in a row, which Kempton blames on local union opposition to PPPs.