Posted on 05/21/2008 7:51:41 AM PDT by BGHater
I’ll take some of that toilet paper if anyone has extra.
With a 25% rise in charges at no additional spending, we are talking an out of the gate profit of almost $400 Million per year.
Divide that into 12.8 Billion you get a payback period of a little more than 30 years - but the lease runs for 75.
Conclusion: this would be very profitable for the company and is just another way Rendell is trying to rip off the taxpayers.
Divide that into 12.8 Billion you get a payback period of a little more than 30 years - but the lease runs for 75.
$400 million/$12.8 billion = 3.125% a year.
Conclusion: this would be very profitable for the company
You bet, especially when you consider they could make 3.8% by buying 10 year US Treasury bonds. LOL!
There needs to be a balance but we do not need to let foreign interests own infrastructure or defense based companies.
This is crazy! Our asshat politicians divert all our tax money to socialist causes and end up having to find the lowest bidder from overseas to cover the basics like transportation?.....frick’in lovely!
So after 10 years of continuous 2.5% increases, (that is, the 11th or 12th year), they are up another 25%.
I didn't cover that case because it would take a spreadsheet to go over all of the possible scenarios.
So fast Eddie, how much did you get?
Don't be an idiot, I read the 2004 CAFR - did you?
The costs are $80 million per year for workers and maintenance, and that is as performed by our goldbricking PennDOT workers or under bid proposals that they put out.
Current take (2004 numbers) is $400 million, leaving $320 million per year as profit.
Wow - last time I drove the Pa Turnpike (admittedly a few years ago) it was like driving along a creek bed with 4 flat tires. Between the potholes, cracks and leftover material from previous ineffectual repairs, driving the speed limit in a stiff-suspension vehicle was similar to the old “magic fingers” hotel bed experience. Add in the “convenience” of plaza monopoly food and gas, and you had a complete “why would anyone ever pay to drive on this pig trail” moment. Maybe private ownership is a good thing.
First Kennywood, and now the Turnpike.. guess its time to just start accepting that PA is a Spanish satellite state.
If you think 76 is bad, go try riding the free I 80 east to west.
Rendell’s basically a full time employee of the clinton campaign anymore... PA has no governor at the moment.
Remember when those dumb, unpatriotic Americans sold Pebble Beach to those brilliant Japanese many years ago and then bought it back at a discount?
This possibility is even more frightening as this is the group that has a contract to take over a major chunk of Texas highways as part of the corridor to Canada.
With a 25% rise in charges at no additional spending, we are talking an out of the gate profit of almost $400 Million per year.
Divide that into 12.8 Billion you get a payback period of a little more than 30 years -
...that ignores the cost of capital or the risk free rate of return, I automatically assume the poster is a moron.
When foreigners buy our debt, it's bad.
When foreigners buy our stocks, it's bad.
When foreigners invest in our infrastructure, it's bad.
Remember when those dumb, unpatriotic Americans sold Pebble Beach to those brilliant Japanese many years ago and then bought it back at a discount?
Even when foreigners buy our real estate and lose big, it's bad.
If you look over the article a little more closely, you will see that they will be raising the toll rates a great deal year over year, and those increases will be compounding, e.g. for a $10 toll which is increased (a minimum of) 2.5% each year, after a decade the toll will not be $12.50 but more like $12.80. And we are not talking a decade but 7.5 decades.
I didn't put all that in, because future toll increases and future costs will at the least offset each other.
As a rough, "back of the envelope" calculation, I would have thought it was pretty obvious that the costs to those using the Turnpike will be higher and the corporation will be making a boatload of money - all while the original bondholders were paid off years ago and the Turnpike was supposed to be returned to the taxpayers at that point.
Yeah, 2.5% or the rate of inflation.
and those increases will be compounding,
You bet.
I didn't put all that in, because future toll increases and future costs will at the least offset each other.
Sure.
As a rough, "back of the envelope" calculation, I would have thought it was pretty obvious that the costs to those using the Turnpike will be higher
Right, by 2.5% a year.
and the corporation will be making a boatload of money
I bet they will make money. Maybe big money. But to ignore their cost of capital and claim they'll earn back their investment in 30 years may be pushing it.
What if they borrowed at 6%? They need to clear $768 million, just to pay their annual interest. Should be easy, they're making $400 million a year in profit.
I live in Illinois, you don't have to tell me about getting screwed by corrupt tollway authorities.
It will be more than mildly interesting, frightening is the word, when Americans wake up and find who’s buying their municipal water systems.
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