Posted on 01/25/2006 1:42:20 PM PST by Willie Green
For education and discussion only. Not for commercial use.
INDIANAPOLIS — Whether the plan to lease the Indiana Toll Road succeeds or fails, the deal is worth millions to those working behind the scenes.
As lawmakers in the House prepared to vote on the plan, the Indiana Finance Authority on Tuesday began releasing the cost of putting together the state's bid package.
The global investment banking firm of Goldman Sachs and Co. stands to earn more than $19 million from the winning $3.85 billion bid. The contract calls for Goldman Sachs to earn 0.48 percent of the first $1 billion, 0.54 percent of the second billion and 0.50 percent of anything over $3 billion.
"It is a large number but a small percentage," Office of Management and Budget Director Chuck Schalliol told House Ways and Means Committee members Tuesday morning.
He compared it to paying the broker's commission when buying a stock.
Gov. Mitch Daniels announced Monday that the same Spanish-Australian consortium that won the right to run the Chicago Skyway submitted the highest of four offers to run the Indiana Toll Road — $3.85 billion for 75 years.
Schalliol told committee members that Goldman Sachs is taking a risk, since the deal must go through for the firm to be paid. But even if the deal falls through, the five-page letter from Goldman Sachs showed the investment banker would be allowed to reclaim its costs for legal services, consultants and engineers hired for the deal. The contract is retroactive to Aug. 15, which was early on in the effort to construct the bids.
Aside from what the state is paying Goldman Sachs, the state has its own outside contracts. It has hired the Indianapolis-based law firm Ice Miller to compile the contract.
Ice Miller subcontracted the work to the Chicago law firm Mayer Brown Rowe and Maw — the same firm used in the city of Chicago's lease of the Chicago Skyway to foreign investors.
The Indiana Finance Authority released the outside counsel agreement and a list of bills: three from Ice Miller totaling $150,831 and one from Mayer Brown totaling $196,136.
Schalliol told lawmakers the state's tab for outside legal counsel is expected to top $1 million. So far, the state has spent another $500,000 on engineering studies, including $300,000 to Chicago-based Wilbur Smith Associates, which compiled traffic studies for the bidders. He
Schalliol estimated the whole package will cost the state $23 million to $25 million.
Under the agreement, the administration does not have to release the losing bids until the winner signs a contract.
Schalliol also hinted to members of Ways and Means that the joint bid by Madrid-based Cintra Concesiones de Infraestructuras de Transporte and the Australian-based Macquarie Infrastructure Group — which bid under the name Statewide Mobility Partners — was significantly higher than the other three, including the lone American firm in the mix.
The governor is moving quickly to promote support for the Toll Road lease. The bill passed out of committee Tuesday. The deadline to vote a bill out of the House is a week from Thursday.
OOIDA Opposes Indiana Toll Road, Calls Drivers to Action
2006/01/25 13:18:00
Layover.com
(Grain Valley, MO)-The Owner-Operator Independent Driver's Association is urging its Indiana members to contact their state lawmakers and Governor Mitch Daniels to oppose legislation that would permit the state to lease the Indiana Toll Road.
The governor has reviewed bids received to operate the Indiana Toll Road for the next 75 years. A Spanish-Australian consortium has emerged as the frontrunner with a $3.8 billion bid from Cintra of Madrid, Spain, and Macquarie Infrastructure Group of Sydney, Australia.
"The toll road is an integral part of the National Interstate Defense Highway System - and the governor wants to sell it to a foreign country," says Todd Spencer, OOIDA Executive Vice President. "This isn't thinking outside the box. It's thinking outside the planet. Truckers have even more at stake than anyone else. If the heavily traveled Indiana road can be auctioned off so can every other route in the nation."
The governor says the money would be used for various transportation projects in the state including extending Interstate 69 from Indianapolis to Evansville with this section, too, being a privately owned toll road.
With more than 4,600 members across the state, OOIDA believes the lure for supporters is having a hand in or sharing in the billions that will be raised up front with little or no thought to where the state will be just a few years down the road.
"We think this is more than a lousy idea. It's an outrageous one for the state, for truckers and for the nation," Spencer says. "The toll road isn't the governor's to sell. It belongs to the people of Indiana and to the highway users who have paid for it and continue to pay for it with their tolls and taxes."
Documents produced by the governor's office show that the toll road is a moneymaker for the state right now. Even at the toll road's existing toll rates, the road netted nearly $12 million in income in 2005. Increasing the tolls as planned by the governor -120 percent for big trucks -could likely net $100 million a year over expenses.
In addition to highways, this legislation also gives the governor the authority to lease other transportation infrastructure including river ports and airports.
The House Ways and Means Committee is expected to consider the bill today. Lawmakers have until Feb. 2 to vote the legislation out of the House and send it to the Senate.
BWAAHAHAHAHAHA! What are they going to do, put a couple of barriers out and stop people from driving on it? Or cut it up and take it with them when they leave?
They are putting a huge amount of money up front to build these roads, money this state doesn't or couldn't ever get any other way and they are going to then hurt the thing that they spent the money on? I hate to see the money going overseas for 75 years yes, but this clown is a moron to think they would build these roads and then screw the cash cows that they need to get their money back.
The road is already built and paid for, dummy.
The governor is auctioning it off dirt-cheap to cronies who will gouge the traveling public with excessive tolls.
Should not that toll road have paid itself off by now and converted to a free interestate? Wonder what the original law said.
Revenue over 75 years (until 2080) if at 12M$ now, plus 3% more per year would be 3,271 Million dollars. 3 Billion. A modest increase in rates would allow the revenue to match the 3.85B$ offer.
Revenue over 75 years if at 100M$ now, plus 3% more per year, would be 27,263 Million dollars. 27 Billion for those of us in USA. (Not sure how the math is working that a 120% increase on truckers would take the net revenue from 12M to 100M per year, but that's what the news blurb said)
So, Indiana is willing to give up future revenues of as much as 27 Billion dollars for 3.85 Billion now, a net loss of 23 Billion dollars
Brilliant work there, governor.
The money isn't necessarily going overseas. For example, I hold shares in Macquarie Infrastructure Trust. So the revenues could end up in Indiana anyway.
Cintra is going to own the whole hemispheric transportation corridor, when all is said and done.
The taxpayer built that roadway, and the taxpayer owns it. The governor has no more right to sell it to a foreign country, than you have the right to sell the Eiffel Tower.
Aren't they the ones who are involved in the Trans-Texas Corridor?
What do we know about them?
Who are the cronies behind this crap?
(as if I really need to ask.)
Why do yankees love their toll roads so much? Just about every state from Illinois to Maine is loaded with toll roads. I spent nearly 50 dollars in tolls recently going from Chicago to Portland,Maine in a class c motorhome.
We southerners are pretty dumb but we aren't dumb enough to let our politicians turn all of our interstate highways into turnpikes.
To all those people decrying the Toll Road Lease, what would be YOUR solution to Indiana's road problems? I'm sure most of you would oppose a gas tax increase right off the bat.
Any knowledge of whether the Indiana transportation fund, if it even exists, is being plundered to balance the budget or fund skrools or whatever the political preference of the day is? Would anyone be willing to seal off the transportation fund to plundering, even when that plundering is used to further conservative social policy?
Indiana Toll road is Interstate 80.
I-90/94
From Portage to the Ohio state line it's Interstate 80/90.
It's Interstate 80/90 from Ohio to Portage, Indiana, then it's 90 from Portage to Illinois.
I avoid using the I-80 Tollway through northern Indiana as MUCH as possible.
The tollway IS Interstate I-80. It's the same I-80 that crosses ALL the way across the entire United States from East to West.
I-94 is NOT the Indiana Tollway. I-94 continues on around the bottom of Lake Michigan and goes up through Battle Creek and continues on east over to Detroit MI.
OK, I knew there was a "90" in there.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.