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To: Alberta's Child

No; there were many tollways, in fact. One of the more poignant ones was the Middlesex and Essex Turnpike in New Jersey, which got converted into the Pennsylvania Railroad’s main line (today’s Northeast Corridor). Many toll bridges too, never mind tolled ferries.

International companies took over government toll roads here because of the bidding process that excluded domestic companies, never mind the regulatory bias against domestic companies. When the government controls the playing field, they tend to play favorites. Same goes for commuter rail and transit bus contracts, which favor foreign companies also.


28 posted on 06/07/2014 6:00:45 AM PDT by Olog-hai
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To: Olog-hai
The first major toll road in the U.S. was built between Philadelphia and Lancaster in the 1790s. It was privately owned. In colonial times, a number of smaller toll roads were built that were operated and maintained by local governments.

In terms of the private toll road situation today, your statement about the exclusion of domestic companies is flat-out wrong. Trust me -- if Goldman Sachs wanted to lease the Indiana Turnpike on behalf of its clients, it could do so tomorrow. It would probably get a preferential option for it, too.

The major reasons why foreign companies dominated these bids were:

1. These investors saw these toll roads as an opportunity to get their hands on a fairly predictable cash flow in U.S. dollars. You'll notice that many of these transactions took place right around the same time as the controversy about foreign-owned companies buying leases on U.S. port terminals. For these investors, the deal was as much about a currency exchange hedge as it was about long-term value as you and I might measure it.

2. Smart U.S. investors stayed away from these deals because they knew there was a huge risk that couldn't be measured accurately and was effectively unlimited: lawsuits. In a nation where 30,000+ people die in motor vehicle accidents every year, and where it sometimes seems like there are more lawyers than people, acquiring an ownership stake in a major highway is one of the dumbest investment decisions you can ever make. The private owner of the road immediately becomes a potential target in a civil lawsuit every time a crash occurs on the road, and since the road is now a "private" asset instead of a "public" thoroughfare the private owner doesn't have the protection of sovereign immunity that a government would have. In fact, there was a landmark court case in Indiana relating to this very issue just in the last year or two -- and the private company that holds the lease on the road lost the case.

34 posted on 06/07/2014 6:18:57 AM PDT by Alberta's Child ("What in the wide, wide world of sports is goin' on here?")
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To: Olog-hai

P.S. I agree with most of what you’ve posted here. I’m not a fan of government involvement in most of these things, but the history of the development of transportation infrastructure in the U.S. is riddled with examples of how seriously flawed the whole idea of “private ownership” actually is.


35 posted on 06/07/2014 6:26:19 AM PDT by Alberta's Child ("What in the wide, wide world of sports is goin' on here?")
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