Posted on 07/03/2006 5:37:03 AM PDT by 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
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.
Freeway comes from California where the roads are free from additional fees, unlike say, the Indiana Toll Road (recently on the auction block to some Spanish company).
I've driven on both, I have no trouble telling the difference.
I'd still submit that those places where they have free parking are being true to the American way. Democrats want people to pay to park so they can restrict their mobility and create dependence. Free Parking is independence. No, I'm not kidding.
What "free market"?
Oh. Right. Your original post had nothing to do with wages.
Oh well, the search for something more interesting begins in the fall...
CFR's grants received list reads like a who's who of socialists, commies, fascists, globalists, diversity-perversity advocates, doesn't it?
Well, let's look at the Pennsylvania Turnpike System. If you want a job as a toll collector, you have to have political connections to powerful pols who view Turnpike revenues as their personal playpen - while the road remains in crappy shape.
I personally would be in favor of removing the tolls altogether - that is what was supposed to have happened once the bonds used to build the turnpike were paid off.
Are you studying globalism in school? Is that why you can't see it?
Once, I said that women may understand this concept better than men. We know how to live on someone else's money. Just hand me your credit card and I'll go shoppiing at the mall while you enjoy your football.
Toll collectors do mindless jobs but can sometimes be paid a lot because they are political patronage jobs. In Nj they were earning $70.000/an and Bret Schonberg wanted to just take the toll booths out.
Very soon, we are going to see a very, very tight labor market in the US. All this cheap labor talk has been a lot of hooey. Scarce labor has always driven automation in US economic history.
Since you're going to stick with that; my community's library is usually quite busy, actually. Popular new releases and reference materials are very hard to come by because the demand for them causes to be checked out continually, causing long waiting lists.
At our library, you have to pay to park in the adjacent lot and it's almost always near full (it's downtown).
PA TP is instituting an E-Z Pass arrangement where if you don't use the pass, you have to pay double at the booth. It's a ripoff.
OMG It's the end of the republic!.....or not
I've heard nothing of that, and I drive it every workday (ungh). Do you have a link?
If anything, toll roads initially offered a discount for EZ-Pass and then took it away once people started widely using it.
I personally refuse to get one - I won't cater to any kind of tracking system.
Oh the CFRs are significant.
Most are missing the electronic toll collection angle too.
RFID systems in the transportation were are at an estimated $767 million return on investment 2005, with hardware representing approximately 40% of the market.
I was on a thread last night trying to point out the data collection that goes with the electronic toll systems and got pretty roughed up.
While doing a few searches I even saw EZ Pass was a partner of Verichip. Cintra is too.
See, what Verichip does is creates independent business ventures with businesses such as Cintra. When that is done, the venture usually takes on a business name that makes it a little rough to trace back to Verichip unless you are specifically looking for it.
The business gains a percentage of the profit but the data is also shared.
The applications involed with these RFID systems and electronic toll collection is for future investment. The investment industry sectors include: electronic toll
collection (ETC); asset management; real-time location systems (RTLS); security/access control; supply chain management (pallet, case/carton, and item tracking); and transportation ticketing. ETC and rail car tagging are the more established. The future market will be driven by open-loop applications.
This is why the foreign entities that are already partnered with Verichip ventures can do the bidding so cheap. They are counting on the return on investment from the future applications. If a domestic business doesn't have this venture set up, the cost of leasing the roads will be higher.
Why is it a ripoff? Get an EZPass. It's not like the government isn't already taking pictures of your license plate a the toll plaza anyway.
That would be true if there were perfectly flat roads. Roads are not perfectly flat and when the heavier trucks start bouncing around, the unit loadings of the tires in contact with the pavement temporarily increases, pounding the (insert favorite #2 word here) out of the roads.
This combined with a climate where most winter days go through a freeze/thaw cycle and lots of trucks, the roads don't last long.
It's a ripoff for those that only use the road once or twice a year and forget going through the trouble of getting a pass for each jurisdiction.
See what I mean? People actually think roads are free.
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