When Outsourcing Public Services to Private Companies Goes Wrong


The Australian company Transurban recently teamed up with a construction firm to build new express toll lanes in a congested part of the Washington, DC-area beltway. Under a 40-year contract with Virginia, the state must reimburse the private companies up to 70 percent of toll revenues lost when the number of carpoolers in the express lanes exceeds 24 percent of the total traffic, making taxpayers foot the bill when carpooling cuts into contractor revenues.

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