Tuesday, December 19, 2006

You are not going to like this


Dulles toll road

Sorry to be the one to bring you the bad news, but better you know than not.
Fifty years to the day after Ike put his pen to the Highway Act [creating the 41,000 mile interstate highway system], another Republican signed off on another historic highway project. On June 29, 2006, Mitch Daniels, the former Bush administration official turned governor of Indiana, was greeted with a round of applause as he stepped into a conference room packed with reporters and state lawmakers. The last of eight wire transfers had landed in the state's account, making it official: Indiana had received $3.8 billion from a foreign consortium made up of the Spanish construction firm Cintra and the Macquarie Infrastructure Group (mig) of Australia, and in exchange the state would hand over operation of the 157-mile Indiana Toll Road for the next 75 years. The arrangement would yield hundreds of millions of dollars in tax breaks for the consortium, which also received immunity from most local and state taxes in its contract with Indiana. And, of course, the consortium would collect all the tolls, which it was allowed to raise to levels far beyond what Hoosiers had been used to. By one calculation, the Toll Road would generate more than $11 billion over the 75-year life of the contract, a nice return on mig-Cintra's $3.8 billion investment.

The deal to privatize the Toll Road had been almost a year in the making. Proponents celebrated it as a no-pain, all-gain way to off-load maintenance expenses and mobilize new highway-building funds without raising taxes. Opponents lambasted it as a major turn toward handing the nation's common property over to private firms, and at fire-sale prices to boot.

...

Across the nation, there is now talk of privatizing everything from the New York Thruway to the Ohio, Pennsylvania, and New Jersey turnpikes, as well as of inviting the private sector to build and operate highways and bridges from Alabama to Alaska. More than 20 states have enacted legislation allowing public-private partnerships, or P3s, to run highways. Robert Poole, the founder of the libertarian Reason Foundation and a longtime privatization advocate, estimates that some $25 billion in public-private highway deals are in the works—a remarkable figure given that as of 1991, the total cost of the interstate highway system was estimated at $128.9 billion.

Not only can private companies raise tolls to obscene levels unless controlled*, but they will surely slight maintenance unless carefully regulated. Even with control and regulation, it'll be a constant battle between government and these private companies.

How do these maroons get into office? Just asking.

(read more)

* And why in hell is there a second "L" in controlled? I know, its just to piss me off.

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