The Chicago Skyway.
I used to drive that when I was young. It gives an amazing view of the area but it was always in disrepair and virtually empty. It let off in a rather bad area of town.
Posted on 07/15/2006 12:40:58 PM PDT by Flavius
WASHINGTON (AP) -- Roads and bridges built by U.S. taxpayers are starting to be sold off, and so far foreign-owned companies are doing the buying.
On a single day in June, an Australian-Spanish partnership paid $3.8 billion to lease the Indiana Toll Road. An Australian company bought a 99-year lease on Virginia's Pocahontas Parkway, and Texas officials decided to let a Spanish-American partnership build and run a toll road from Austin to Seguin for 50 years.
Few people know that the tolls from the U.S. side of the tunnel between Detroit and Windsor, Canada, go to a subsidiary of an Australian company -- which also owns a bridge in Alabama.
Some experts welcome the trend. Robert Poole, transportation director for the conservative think tank Reason Foundation, said private investors can raise more money than politicians to build new roads because these kind of owners are willing to raise tolls.
"They depoliticize the tolling decision," Poole said. Besides, he said, foreign companies have purchased infrastructure in Europe for years; only now are U.S. companies beginning to get into the business of buying roads and bridges.
Gas taxes and user fees have fueled the expansion of the nation's highway system. Thousands of miles of roads built since the 1950s changed the landscape, accelerating the growth of suburbia and creating a reliance on motor vehicles to move freight, get to work and take vacations.
In 1956, President Eisenhower pushed to create the interstate highway system for a different: to move troops and tanks and evacuate civilians.
The Bush administration's plan to let a foreign company manage U.S. ports met a storm of protest in February. But plans to sell or lease highways to companies outside the United States have not met such resistance.
John Foote, senior fellow at Harvard's Kennedy School of Government, said the government can take over a highway in an emergency. But he objects to selling roads to raise cash.
But that is just what Chicago has done.
Last year, the city sold a 99-year lease on the eight-mile Chicago Skyway for $1.83 billion. The buyer was the same consortium that leased the Indiana Toll Road -- Macquarie Infrastructure Group of Sydney, Australia, and Cintra Concesiones de Infraestructuras de Transporte of Madrid, Spain.
Chicago used the money to pay off debt and fund road projects. Skyway tolls rose 50 cents, to $2.50; By 2017, they will reach $5.
The Indiana Toll Road lease is a better deal, Foote thinks, because the proceeds will pay for urgent projects such as road and bridge improvements.
That need is precisely why cities and states have begun to look to foreign investors.
Between 1980 and 2004, people drove 94 percent more highway miles, according to Federal Highway Administration statistics. But the number of new highway lane miles rose by only 6 percent.
Washington is not likely to produce more money to build roads. The federal highway fund -- which will have a balance of about $16 billion by the end of 2006 -- will run out in 2009 or 2010, according to White House and congressional estimates.
About half the states now let companies build and operate roads. Many changed their laws recently to do so.
So Illinois lawmakers are examining privatizing the Illinois Tollway, New Jersey lawmakers are considering selling 49 percent of the state's two big toll roads and a gubernatorial candidate in Ohio wants to sell the turnpike.
Indiana Gov. Mitch Daniels, who championed his state's toll road deal, now wants investors to build and operate a toll road from Indianapolis to Evansville.
Patrick Bauer, the Indiana House's Democratic leader, says such deals are taxpayer rip-offs.
Bauer believes Macquarie-Cintra could make $133 billion over the 75-year life of the Indiana Toll Road lease -- for which Indiana got $3.8 billion.
"In five, maybe 10 years, all that money is gone, and the tolls keep rising and the money keeps flowing into the foreign coffers," Bauer said.
Orange County, Calif., got burned by a toll-road lease for a different reason.
The road, part of state Route 91, was built and run for $130 million by California Private Transportation Company, partly owned by France-based Compagnie Financiere et Industrielle des Autoroutes. The toll road opened in 1995.
Seven years later, Orange County was looking at gridlock. But it could not build more roads because of a provision in the lease. So it bought back the lease -- for $207.5 million.
To encourage more domestic investment in highways, former Transportation Secretary Norman Y. Mineta made a pitch to Wall Street on May 23.
"The time is now for United States investors -- including our financial, construction and engineering institutions -- to get involved in transportation investments," said Mineta, who left office July 7.
U.S. companies are getting the message.
San Antonio-based Zachry Construction Co., along with Cintra, received approval on June 29 for a 50-year lease to build and run a toll road from Austin to Seguin for $1.3 billion.
That is part of Texas Gov. Rick Perry's vision to attract more than $80 billion in private funds for roads by 2030. He wants a new tollway from Oklahoma to Mexico and the Gulf Coast, and one from Shreveport, La., and Texarkana to Mexico. Cintra-Zachry reached a $7.2 billion deal last year to develop the project's first phase. The announcement of a $1.3 billion deal in June was part of that $7.2 billion agreement, said Perry's spokesman, Robert Black.
"In Texas, our population is going to double in the next 40 years and our current infrastructure can't handle that growth," Black said.
Not everyone in Texas buys the idea. Harris County officials recently voted against selling three toll roads. Also, independent gubernatorial candidate Carole Keeton Strayhorn opposes Perry's toll road plan.
"Texas freeways belong to Texans, not foreign companies," she said.
In addition, ask Marriot about those great hotel investments they made in Cuba.
Or maybe Chevron about those oil faciilities in Chavez land.
I bet Boston kind of wishes they would have leased the Big-Dig about now.
Not that there's anyone stupid enough to give them a dime.
Well, maybe Kennedy.
Or Kerry.
Or the American taxpayer.
Sigh.
"Someone should be put in jail for this. "
Why? for reducing operating costs to the taxpayer?
I don't care how much they make, it'll still be cheaper than creating the hundreds of patronage jobs that make a toll road impossible to operate efficiently.
What are roads for? If it's run by gov't they are places to put potholes to ignore. If they are run by a private entity, they are a place to generate revenue - and will be run better, cheaper and more efficiently than the government patronage jobs and state departments of transportation could ever manage.
I don't agree with our state leasing the toll road for 75 years so we can have a balanced budget today. That's just passing the problem down to future generations.
Remember what happened to the "Ports" deal in Baltimore? The same thing should happen to this sell out. Write your congressman, raise hell.
Huh? The money in the "Federal Highway Fund" comes from the federal tax on gasoline. How could it "run out"? Are people going to stop buying gasoline?
"I don't share your faith."
Mine is not faith, rather it is a lack of faith in government solutions.
This is good news. It shows the failure of government solutions to deliver on something as simple as a road.
Recognizing that failure sooner rather than later will result in lower costs to the taxpayer.
Governments will squander the money generated through the sale of these roads, to be sure, but that's another matter.
Take another look. This isn't such a bad thing.
Let's see, the Bolsheviks in Russia did that, Mao in China, Ho Chi Minh in Vietnam, Mossadeq in Iran, Castro in Cuba, and Mugabe in Zimbabwe. You are the company you keep. Your solution is not exactly the conservative view.
The Chicago Skyway.
I used to drive that when I was young. It gives an amazing view of the area but it was always in disrepair and virtually empty. It let off in a rather bad area of town.
correct me if I'm wrong but as I understand it the Indiana toll road lease money is off budget and going to capital investments, not to the current operating budget.......
It's going to be used to fund road projects. Even our NAFTA highway boondoggle. At least that's what our local news has been implying.
Because we have Executive Order 12803, by President Bush's Father.
Enjoy!
Section 1. Definitions. For purposes of this order: (a) “Privatization” means the disposition or transfer of an infrastructure asset, such as by sale or by long-term lease, from a State or local government to a private party.
(b) “infrastructure asset” means any asset financed in whole or in part by the Federal Government and needed for the functioning of the economy. Examples of such assets include, but are not limited to: roads, tunnels, bridges, electricity supply facilities. mass transit, rail transportation, airports, ports. waterways, water supply facilities, recycling and wastewater treatment facilities, solid waste disposal facilities, housing, schools, prisons, and hospitals.
http://waterindustry.org/12803.htm
Good Lord... it's scary the stuff that got past everyone pre-internet age, isn't it? Not that knowing seems to make a difference.
Good find.
Started disliking the old man as soon as the words "new world order" came out of his mouth.
Look what Cornyn wants to use American taxpayer money for in Mexico.
(a) In General- Grants shall be awarded from the Fund for projects to carry out the purposes described in section 3, including projects--
(1) to construct roads in Mexico to facilitate trade between Mexico and Canada, and Mexico and the United States;
http://thomas.loc.gov/cgi-bin/query/z?c109:S.3622.IS:
So Americans get to pay for Mexico's roads for NAFTA and our roads get eminent domained by foreigners.
Can we all sing Kumbuya?
My post #55 was for you.
Yes, but Free-to be-Traitors everywhere rejoice, call it Capitalism, rejoice some more, denegrate anyone who stands oppossed, rejoice some more all the way to the Bank. The sellout continues. I just can't seem to find anything in the "R"atpublican platform telling US this is why we were electing them to office. This kind of thing will accelerate, with the taking of the big bucks now, with no sight for the future, because they know America's future is short term. They know exactly what they are doing. America is just another "commodity" for them to trade on for profit. Sit back and be amazed! Blackbird.
Suggest viewing this:
http://www.minutemanpirateradio.com/extras/extras.html
and on that site:
http://www.minutemanpirateradio.com/bonus/Kaptur21June06.wmv
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