Posted on 07/16/2006 10:30:40 AM PDT by cope85
Foreign Companies Are Buying Up American Highways and Bridges Built by U.S. Taxpayers
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
Well said. The secrecy surrounding the TTC should be a red flag to anyone who thinks about this stuff. Perry is selling us out for short term cash. The troubling thing is that there doesn't seem to be a damned thing we can do about it.
They are converting SH 121 here in Dallas into a toll road.
Cornyn also voted against funding for building a wall on the border last week. Something strange is going on with him IMO.
He won't believe you - he's not permitted to.
"They"?
In BobL's second link above you will see that "They" is the local transportation authority, not Governer Perry.
Additionally that second link accurately points out that there is much new constuction involved.
The whole point of creating the local/regional authorities was to put the decision making process in the hands of locals and not the state. It is consistent with the "Home Rule" part of the Texas Constitution. Plus, it prevents the metro areas from ganging up and forcing the cost of these local roads onto taxpayers statewide. You can see the same concept in the regional water boards.
One again, I am waiting for someone to document the mis-info that the guv is converting these roads.
They have to use speed traps for that instead.
It seems pretty clear that he feels that it is directly affecting his pocketbook. I also find it interesting that he finds the need to shill here for it.
Yes, it shows the incompetence of our public servants and agencies. My only gripe is that American companies aren't buying these roads and bridges. This is a step towards libertarianism and it should work out just fine. The roads will be operated for a profit and without political considerations.
I'm not too familiar with the libertarians. For some reason I didn't think they would go for tying up land and roadways for 70 to 90 years. Their children and grandchildren living close by these toll roads will never have a chance at democracy or liberty. Part of Perry's and the free trader's argument is that the census is growing so rapidly that in 10 years our infrastructure will be bursting at the seams. Well, we don't know what the census will be in 25 or 50 years either but rest assured that the future for your children will be tied up in a 70 year contract.
If they need a road they can just take the long way around and stay in traffic jams for hours. Cintra doesn't care about democracy for our children. As a matter of fact Cintra could if they wanted to tax those using the toll roads for the UN. What a can of worms!
Follow BobL's link where it is stated that if the road is built toll free, it won't be built for a long time. If it is built as a toll road, it will get built quickly.
You are just like BobL, you want someone else to pay for your ride. Screw you, it ain't gonna happen.
Where does it say that Perry must approve such action? Show me.
Any second grader can point out that isn't Perry.
Show mw where Perry is converting roads.
Hah hah hah. Show me.
And just think what will happen when they decide to pack-up all the bridges and roads and take them back to their country. ;~))
...And of course, we no politicians never lie....
Without support of the tax and spenders in Austin, it won't fly and you know it.
Who appoints whom to those commissions? They are not elective bodies. At least I don't recall ever having voted for these groups with apparent control over billions of dollars of property and other assets. I also do not like the idea of politicians with a year and a half time horizon selling off these assets for effectively pennies on the dollar, especially if we end up paying more and more to drive on the public's roads. The property to build the roads were condemed using a terrible (though sometimes necessary power. The state will spend whatever moneys are paid within a year or two and then where are they going to go to quench their never-ending thirst for more and more money?
Geez, You'd think that with a nick that is a obscure part of speech, I'd proof my writing.
...And of course, we no politicians ever lie....
Better :-)
For any public opinion that you, BobL, and the anti groups think you can generate against toll roads, it will never be but a small percentage of public opinion against raising the gasoline tax.
That's a fact.
Yes. The privacy issues surrounding these tollbooths around the state is also something that troubles me. Why is it that the toll authorities are so admadent about identifying people using tolltags?
They require that tolltag purchasers be identified and that they be tagged to a specific automobile. I find it to be extremely interesting that it is not possible to simply go to a 7-11 and buy one. What should the toll authority care as long as it gets its money?
If it runs out and the user doesn't put more money on it, they can always send out tickets the same way they do now for people who don't have one.
I've always thought the tollway authorities were a bit big brotherish for my taste.
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