Foreign Control of U.S. Interstates Encouraged By Feds

American Chronicle ^ | June 29, 2006 | Diane M. Grassi

[A. Pole]

50 years ago President Dwight D. Eisenhower signed into law the 1956 National Federal-Aid Highway Act and since 1990 referred to as the Dwight D. Eisenhower System of Interstate and Defense Highways. He authorized the connectivity of 41, 000 miles of high quality highways across the United States. It would be financed by a combination of the Highway Trust Fund, federally imposed user fees on motor fuels and state user fees.

Eisenhower was prompted to persuade the nation’s people to build the interstate highway system, as a matter of national security. Although not at war at the time, he believed it was imperative the interstate be designed for mass evacuation of cities in the event of a nuclear attack, in the era of the Cold War. The Act dictated that one out of every five miles must be straight, in order to use as airstrips in times of war or other catastrophic emergencies. And to that end, the success of national defense was dependent upon the navigability of large numbers of military personnel and their equipment during such a crisis. And even today, 75% of the interstate highway system represents the Strategic Highway Corridor Network (STAHNET) utilized by the U.S. military.

And while in 1956 there was the fear of nuclear threat from the then Soviet Union, today’s national security, often referred to as homeland security, remains similarly threatened in an era where the threat of terrorism looms. Yet, at such time that it would appear imperative that U.S. strategic infrastructure such as the interstate highway system remain under American control, it is but one more public asset available for sale under the guise of Public-Private Partnerships. Unlike domestic privatization, however, states throughout the country are negotiating contracts solely with foreign corporations and conglomerates, primarily in Europe, Australia and Asia, in order to finance the maintenance, modernizing and extension of U.S. interstates.

As funding from federal gas taxes and state user fees have fallen behind the inflated costs associated with road construction and maintenance, more and more state governors and lawmakers no longer see the operation of roads solely as a public responsibility. However, the reason states initially took over handling roads at the beginning of the 19th century was because many roads, bridges and canals had previously fallen to bankruptcy in the hands of private owners.

According to the Secretary of the Department of Transportation, Norman Mineta, “We are like a poker game. We are inviting people to the table and saying, ‘Bring money when you come.’” And Mineta believes, “A big part of the answer is to involve the private sector more fully – not just as a contractor or vendor, not merely as a financier, but as a partner in the funding, management and expansion of our transportation infrastructure.” Yet when those partners are exclusively foreign entities, a whole new dimension is added to the management of the U.S. interstate highway system. It is unprecedented.

The deal which started a flurry of more than 18 proposed foreign financed interstate highway projects across the nation over the past year in amounts of over $25 billion was in Chicago, IL in December 2004. Chicago Mayor Richard Daley proposed an agreement to lease the Chicago Skyway for $1.83 billion dollars to Cintra-Macquarie Consortium, a Spanish-Australian conglomerate, doing business as State Mobility Partners in the U.S. The deal, finalized in January 2005, gave Cintra-Maquarie a 99-year lease for which it is responsible for the maintenance and structural quality of the 8-mile elevated structure.

In exchange for its upfront payment, Cintra-Macquarie will collect and keep all money from tolls from the Skyway and will be able to raise tolls as incorporated under the terms of the agreement. The company is modernizing toll collection with an electronic transponder system. Until the technology is fully operable, toll collectors have been newly but temporarily recruited. But instead of earning an average hourly wage of $20.00 as their predecessors did, they are paid a $10.00 to $12.00 hourly wage. And as contracted, the Skyway offers the buyer an asset without having to deal with improvements or debt.

Following the situation in Chicago, Indiana Governor and former Office of Management and Budget Director for President Bush in his first term, Mitch Daniels, explored a similar arrangement for Indiana’s $2.8 billion shortfall in its transportation budget over the next ten years. Daniels was able to get his highly contested proposal through the state legislature as well as the courts where it was challenged by a citizen advocacy organization.

A bid was accepted by the state of Indiana in the amount of $3.8 billion and an agreement was arrived at with Cintra-Macquarie, the same operator of the Chicago Skyway. The lease agreement will provide for the operation and maintenance of the 157-mile Indiana Toll Road, a part of the interstate highway system, for a period of 75 years. The deal is expected to close on June 30, 2006. The Indiana Toll Road will also have an upgraded electronic toll system installed, eventually ending the need for toll workers.

Here are just a few of the many other projects either approved or proposed across the country. In Virginia, the rights to manage, operate and maintain the Pocahontas Parkway, an 8.8-mile toll road outside of Richmond, were bought for $611 million by the Transburban Group, also an Australian entity in its first foray into U.S. road management. A lawmaker in New Jersey has proposed selling a 49% interest in the New Jersey Turnpike and Garden State Parkway to a private investor.

In August 2005, the same Macquarie Infrastructure Group took over operations of the Dulles Greenway Toll Road which operates between suburban Virginia and Washington, D.C., for the amount of $533 million. And the anticipated widening and extension of the Trans-Texas Corridor which runs 316 miles and parallel to I-35 in Texas, is slated to be built by Cintra, the Spanish company, and Zachry Construction, out of San Antonio, TX, who plan to invest $7.2 billion.

But windfall upfront payments while attractive to states to reinvest in other transportation projects, have their limitations and pitfalls too. States will need to learn how to enforce and write explicit contracts. And the proceeds from the sale or lease of roads should be earmarked for specific projects. Non-compete clauses are often inserted in such contracts such as inducing lower speed limits on parallel free roads to drive traffic to the toll road. Others fear that operators will only maintain those parts of the route which remain profitable.

Other issues which are arising more often after the fact is the increasing worry that the public will have less and less input over the use of its public assets. Such is the case in Colorado and California where the enforcement of maintenance matters have already become problematic. Immediate increases in tolls and applied on a perennial basis, with higher tolls applied at rush hours have not sat well with commuters.

However, questions will continue to arise in a process still in its in infancy. Yet states must have the ability to learn from mistakes made in doing business in this brand new way. Will a private firm maintain the roadways as well as the U.S. government? Will a foreign corporation care about the needs of the American people? And will selling off public assets to pay debts now be regrettable down the road? One would think that Eisenhower would have thought so.

Copyright 2006 Diane M. Grassi

contact: dgrassi@cox.net

[Sarajevo]

Does anyone wonder why there are no American companies bidding on these contracts?~Alberta's Child

Why are there no American companies that are willing to keep and maintain toll roads?~Doohickey

Actually, Zachary Construction of San Antonio is teamed with Cintra for the Trans-Texas Corridor portion of this abortion. They are catching he!! here for their secretive practice of withholding information from the public. One of their main practices is the taking of public roads and converting them to toll roads.

For those familiar with the San Antonio area, I'm referring to portions of FM1604, 281, 16 and Rt46.

[ex-snook]

TFP.

Washington FUBAR

[hedgetrimmer]

Its a problem. You vote them in (provided that our electronic voting machines haven't be calibrated for a pre-selected nominee), then they never ask you again about vital issues. They do have 'working groups' made up of internationalists to advise them, however.

[Clintonfatigued]

If low wages, control of everything by the privlidged few, and lack of respect for individual property rights were the makings of a prosperous nation, Mexico would be the world's economic powerhouse.

[hedgetrimmer]

Good tagline.

[butternut_squash_bisque]

Thanks for explaining that, C. It makes sense, now.

[Calpernia]

>>>They do have 'working groups' made up of internationalists to advise them, however.

Big bump

[zeugma]

I am in total agreement with you. We are fighting the TTC here in Texas.

Ditto. No votes for Gov. Goodhair either. I'm NOT going to subsidize his retirement plan. 

[zeugma]

I wonder if the idea to call it "homeland" security instead of "national" security was to down play the idea of nation status. From what I understand they would like to eliminate our northern and southern borders and have a continental homeland.

Every time I hear the word "homeland" in relation to our country I cringe. I guess I'm not teutonic enough. 

[muawiyah]

Having grown up a couple of blocks from Pendleton Pike in Indiana, and knowing that it was built in the early to mid-1800s, I'd suggest the Pennsylvania Turnpike was quite a latecomer.

[muawiyah]

But he's still got a problem cutting around the South side of Lake Michigan.

But, whatever route the trucker follows, as long as he's driving on a Michigan highway, the peope of Michigan are paying for it. Saves wear and tear on the Indiana Toll Road fur shur!

[hedgetrimmer]

Every time I hear the word "homeland" in relation to our country I cringe.

Every red blooded American does. 'Homeland' is globalese.

[hedgetrimmer]

Every time I hear the word "homeland" in relation to our country I cringe.

Every red blooded American does. 'Homeland' is globalese.

[Dog Gone]

I wonder where all the Bushbots are when crap like this rears it's head.

They're rolling their eyes at the diaper-wetters.

[petitfour]

Isn't there a toll to go across the Mackinaw Bridge?

[butternut_squash_bisque]

Actually, no it wasn't...

The History of the Pennsylvania Turnpike

Turnpike history

President George Washington publicly favored the establishment of roads to promote the westward expansion of our nation. In 1791, the legislature of the Pennsylvanian Commonwealth approved a state-wide transportation plan and a year later created the Philadelphia and Lancaster Turnpike Company. The turnpike charter called for the construction of a 62-mile log-surfaced road, which provided successful transport for settlers and their goods over the muddy territories.

The Lancaster Turnpike route was later replaced by a canal after 1800 and then the beginnings of a railroad in the 1880s. The Allegheny Mountains posed a barrier to William Vanderbilt and Andrew Carnegie, who at the time were building a railroad from Harrisburg west to Pittsburgh to compete with a more northerly route provided by the booming Pennsylvania Railroad. Over one-half of the roadbed was constructed and seven tunnels partially excavated before Vanderbilt went broke in 1885.

http://www.paturnpike.com/geninfo/history/history.aspx

[Alberta's Child]

That's a lot of nonsense. "Free parking" and "free highways" are a Marxist's dream -- where the taxpayers subsidize the construction and maintenance of infrastructure that is used by any and all. Sound great in concept, but it's no accident that California's "freeways" have been the most congested in the nation for decades. As with anything else in life, those things that are most heavily subsidized by the government will always be used to excess.

As far as parking is concerned, just take a ride down any street in a residential neighborhood in New York City. The curbside parking is all "free," and there isn't a parking space to be found anywhere.

I like Alberta, but have never had to pay to park while there, though I'm sure that those who demand to pay to park are accommodated by some sharp people fulfilling that need.

Funny you should mention that. The City of Calgary is considered one of the most innovative in North America when it comes to minimizing congestion in the downtown area by limiting the number of parking spaces under the city's zoning codes and charging pretty exorbitant prices at facilities operated by the Calgary Parking Authority.

[muawiyah]

Different name ~ you said "Pennsylvania Turnpike", not a "turnpike in Pennsylvania".

[Alberta's Child]

There's no way to fix a crowded freeway, because every attempt to provide sufficient capacity to accommodate the current traffic volumes will always be followed by "induced congestion" as more and more users take advantage of the "free" asset that has been provided to them.

[absolootezer0]

funny you should mention that, there was an aritcle in the lansing state journal about the governors and their ideas on what to do about roads.
http://www.lsj.com/apps/pbcs.dll/article?AID=/20060703/NEWS01/607030326/1001/news
article mentions something about devos liking the idea of high speed toll lanes. i'd really like to know what that means.