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Private Toll Operators Salivate Over Donald Trump’s Infrastructure Plan
The Intercept ^ | June 6, 2017 | Lee Fang

Posted on 06/11/2017 11:05:39 PM PDT by Tolerance Sucks Rocks

Investors are hoping to seize upon the $1 trillion infrastructure plan proposed by President Donald Trump to transform the nation’s highways, bridges, and tunnels into assets they can monetize by adding tolls and other user fees.

The Trump infrastructure plan, which the administration plans to roll out this week, is centered on the idea of “asset recycling,” which refers to the process of securing new infrastructure spending by leasing the operations of existing public property to private operators.

The privatization-centered scheme has the nation’s largest toll operators salivating. Transurban, Cintra, and TransCore, three major toll operators, have retained federal lobbyists to influence the upcoming plan.

Transurban, which operates Washington-area Beltway tolls, has been accused of price gouging and predatory debt collection practices. In one lawsuit, a driver claimed that she was charged $3,413.75 for unpaid tolls, fees, and fines after Transurban failed to accept her initial payment for $104.15 for missing tolls on the Beltway toll lanes. Washington Post writer Fredrick Kunkle assailed Transurban for “price gouging” after the company hiked its rates to $30 during a winter snowstorm.

During an investor day presentation last month, Transurban’s Jennifer Aument, in charge of North America operations for the Australian company, hailed the Trump infrastructure plan as an opportunity for toll operators like Transurban to expand.

“The people that Trump has put in his administration, they are people who get our business,” Aument said. Trump, Aument added, had appointed several individuals who “were personally involved in working on Transurban’s projects under the Bush administration,” including the Beltway express lane tolls.

Watch:

At least one prominent Trump official involved in the infrastructure plan has recent financial ties to toll operators. Jeffrey Rosen, the deputy secretary of the Department of Transportation, previously provided legal services to Kapsch TrafficCom North America, according to his ethics disclosure. Kapsch TrafficCom provides tolling technology to several public agencies, including the Port Authority of New York and New Jersey.

The concession model has been used in the past to finance infrastructure deals without raising taxes or securing other sources of revenue.

Former Indiana Gov. Mitch Daniels negotiated a deal in 2006 to lease a stretch of Indiana highway to a consortium of investors. The money raised from the deal financed construction in other parts of the state, while the investors were promised toll proceeds for 75 years. The Indiana Toll Road went from $4.65 to $8 for a car traveling the length of the highway, with semitrailers now paying double.

The public-private partnership model now favored by Trump administration officials is being spearheaded by White House economic adviser Gary Cohn and Transportation Secretary Elaine Chao. “We like the template of not using taxpayer dollars to give taxpayers wins,” Cohn told reporters on Friday, explaining his preference for the asset-recycling approach.

But many fear that such privatization schemes simply shift the burden from taxpayers to motorists and truckers, while creating a two-tier system that unfairly impairs the ability of low-income drivers from accessing the nation’s interstate highway system. In the process, a small group of investors reap the most rewards.

Cohn and Chao, notably, have ties to the financial firms positioned to exploit the tolling of America’s highways. Cohn is the former chief operating officer of Goldman Sachs and Chao is a former board member to Wells Fargo. Both firms have expressed interest in toll road deals. Though both Cohn and Chao have said they will recuse themselves from matters that directly affect their former companies, it is unclear if they will recuse themselves from private-public infrastructure policies that will attract interest from investment banks.

The rush to embrace a public-private model based on tolling and other private financing methods is seen as a political winner that can bring infrastructure-friendly Democrats together with Republicans concerned about the cost to taxpayers. But the short-term solution based on political expedience may have long-lasting societal impacts.

Alan Pisarski, a travel consultant, noted in a recent column that the fundamental justification for the interstate system was to connect America for military, economic, and social reasons. There was a reason the first 50 years of the national highway system prohibited tolling.

“Where do those people and trucks go if they are priced off the interstate highways by tolling? What national interest can justify that action?” Pisarski asked.


TOPICS: Business/Economy; Constitution/Conservatism; Government; News/Current Events; Philosophy; Politics/Elections; US: Indiana; US: Virginia
KEYWORDS: assetrecycling; cintra; elainechao; ethics; fines; garycohn; hotlanes; indiana; indianatollroad; infrastructure; investors; lease; mitchdaniels; p3s; ppps; tolls; transcore; transportation; transurban; travel; trump; userfees; virginia
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To: AndyJackson

“You some sort of shill for these crooks?”

I certainly hope that’s the case, or why even have this website otherwise...since it’s not working.


61 posted on 06/12/2017 6:15:48 AM PDT by BobL (In Honor of the NeverTrumpers, I declare myself as FR's first 'Imitation NeverTrumper')
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To: BobL

Sounds not unlike the Mass Pike, which was supposed to have been made free decades ago, when the original bonds were sold off.


62 posted on 06/12/2017 6:16:13 AM PDT by 9YearLurker
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To: Tolerance Sucks Rocks

I don’t mind tolls as long as it is only for the road you are on and can’t be used for financing other projects.

All road work has to be bid on by private contractors.

The idea of tolling a road that is already paid for through taxes makes me mad.


63 posted on 06/12/2017 6:18:38 AM PDT by dila813 (Voting for Trump to Punish Trumpets!)
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To: Tolerance Sucks Rocks

Article from 2008: “Pennsylvania accepts bid to lease Turnpike”.

This isn’t new, and it is working just fine.


64 posted on 06/12/2017 6:19:46 AM PDT by jdsteel (Give me freedom not more government.)
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To: vooch

Private has to price it attractively unless it is for all intents and purposes a monopoly created by the state because there are no other alternatives for travel. That is a sure enough public (political) private “partnership”. Have you been to Austin or Houston or tired to drive from Joplin to Tulsa or Oklahoma City without using a toll road?

Privitazition of public assets is not a solution for bad government management and it usually only leads to more corruption. Privitazition has only one motive and that is to make a profit above what the service costs. Not a modest profit but as much as the traffic will bear.

Pure capitalism is just as bad as pure socialism and eventually they are equal.


65 posted on 06/12/2017 6:20:20 AM PDT by Sequoyah101 (It feels like we have exchanged our dreams for survival. We just have a few days that don't suck.)
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To: Spktyr

“1. Some of the toll companies are American.”

Not the big players - I have yet to see an American-only proposal. The big players like (Australian) Cintra will drag along Williams Brothers because they have to...but it is Cintra that cleans up on these deals.

“2. The politicians only get to sell the rights once and the proceeds from that don’t come from the taxpayers. It’s not a continuing income stream that they can regulate and increase when they need to meet a budget hole that they created.”

Why not? The politicians can tax ANYTHING they want. If they want to slap toll road operators with taxes, starting with property taxes based on revenue stream, they sure as hell can tax them.

“3. I fully expect them to waste the one-time payment - but once it is gone there will be no more and they can’t stealth-increase a tax they couldn’t levy. This is unlike gas tax, road tax, registration and plate fees, etc.”

Tell that to anyone in Texas that has ‘paid off’ their house.


66 posted on 06/12/2017 6:20:45 AM PDT by BobL (In Honor of the NeverTrumpers, I declare myself as FR's first 'Imitation NeverTrumper')
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To: Spktyr

“Highway disbursements are how we got the double nickel, uniform mandatory drinking ages and a host of other bad centralist ideas. They’re also one of the largest payments that a state gets from the Feds.”

Again, if you SERIOUSLY think that people like Obama and Hillary will stop imposing mandates on states, just because the roads are ‘privately owned’, you need to join us on some other threads. That is NOT how they operate.


67 posted on 06/12/2017 6:22:35 AM PDT by BobL (In Honor of the NeverTrumpers, I declare myself as FR's first 'Imitation NeverTrumper')
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To: Tolerance Sucks Rocks

“Cohn and Chao, notably, have ties to the financial firms positioned to exploit the tolling of America’s highways. Cohn is the former chief operating officer of Goldman Sachs and Chao is a former board member to Wells Fargo. Both firms have expressed interest in toll road deals.”

I’ll just bet they have “expressed interest”. More like foaming at the mouth to get their hands on something that produces never ending cash flow with government protections and guarantees.

We know that Goldman Sucks and Wells Fargo both are companies of stellar integrity and have only our best interest at heart. If this isn’t more crony capitalism influence peddling I’ve never seen it.

Lying, cheating, stealing bastards are in every administration and the Trump administration is surely no exception at all.


68 posted on 06/12/2017 6:24:22 AM PDT by Sequoyah101 (It feels like we have exchanged our dreams for survival. We just have a few days that don't suck.)
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To: Spktyr

“If you don’t want to drive on the tolled part of I-635, you can ride in the free lanes. Walking is not required.”

Sure, if that were all that Trump is talking about.

Tell me the options to I-10 to get through West Texas (without diverting for hundreds of miles) if tolling were set up on the EXISTING I-10 lanes in El Paso, as Governor Perry had proposed a decade ago.


69 posted on 06/12/2017 6:24:36 AM PDT by BobL (In Honor of the NeverTrumpers, I declare myself as FR's first 'Imitation NeverTrumper')
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To: BobL

They’ll have to resort to far more blatant methods. Withholding highway money is far and away the easiest thing for them to do to compel compliance. Getting Interstate highway funding away from having to be dependent on FedGov to pay you what they’re supposed to is a huge step in the right direction.

It’s also a step back towards the original intent in the Constitution. Originally, all government made highways were tollways in the US. You may know them better by their original name - turnpikes. When the Constitution talks about Congress’ power “...to establish post roads,” the Framers meant turnpikes.


70 posted on 06/12/2017 6:27:00 AM PDT by Spktyr (Overwhelmingly superior firepower and the willingness to use it is the only proven peace solution.)
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To: 9YearLurker

“Sounds not unlike the Mass Pike, which was supposed to have been made free decades ago, when the original bonds were sold off.”

Yep. But believe it or not, Kentucky was the ONE STATE that actually kept its word, and about 7 years ago the booths were removed from the final toll road. I still have an atlas from 1985 and the state was covered with them (something some people here salivate for, for yet unknown reasons).


71 posted on 06/12/2017 6:27:08 AM PDT by BobL (In Honor of the NeverTrumpers, I declare myself as FR's first 'Imitation NeverTrumper')
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To: Tolerance Sucks Rocks

““We like the template of not using taxpayer dollars to give taxpayers wins,” Cohn told reporters on Friday, explaining his preference for the asset-recycling approach.”

Not increasing taxes? In name only. Who the hell does he think is going to pay the tolls, gnomes?

Tolls and user fees are just a tax increase for what you are already supposed to be paying for.

Note that the fees for tolls in Indiana almost DOUBLED when the Gov. did such a great deal in privatizing the road. And the tolls are doubled for 75 years with escalation clauses.


72 posted on 06/12/2017 6:28:03 AM PDT by Sequoyah101 (It feels like we have exchanged our dreams for survival. We just have a few days that don't suck.)
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To: 9YearLurker

I got so used to Houston’s ring roads that I decided to never live there. :P I live in Dallas; we have had our own experience with flubbed tollroad projects, but we’ve also had our share of successful ones too.


73 posted on 06/12/2017 6:28:07 AM PDT by Spktyr (Overwhelmingly superior firepower and the willingness to use it is the only proven peace solution.)
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To: Spktyr

Ha ha!

I’m drawn to Austin, other than for the liberals there.


74 posted on 06/12/2017 6:29:39 AM PDT by 9YearLurker
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To: BobL

More recent proposals and contracts for that sort of thing in Texas *require* the converted tollway to retain the original capacity free lanes. Other states too.

Also, the proposal for El Paso was to convert the HOV lanes into toll lanes IIRC. Free passage was still to be available.

FYI, HOV lanes were forced on states by (wait for it) withholding Federal highway money until they agreed to put the useless things in. I like them when I’m riding my motorcycle because basically it means I legally get a free express lane all to myself. Not so much when I’m alone in my car, though - it’s an empty lane that could be used for traffic but isn’t.


75 posted on 06/12/2017 6:33:19 AM PDT by Spktyr (Overwhelmingly superior firepower and the willingness to use it is the only proven peace solution.)
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To: Tolerance Sucks Rocks

Trump better not be in favor of toll roads. I do not like paying more taxes.
He is driven everywhere himself or flown and he writes it all off as a business expense. I do not want someone out of touch deciding I should pay more money.


76 posted on 06/12/2017 6:34:46 AM PDT by minnesota_bound
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To: dila813

“I don’t mind tolls as long as it is only for the road you are on and can’t be used for financing other projects.”

They offered that to Pennsylvania on I-80 recently. No big cities on that highway, so lots of pass-throughs, particularly trucks between the Northeast and Midwest.

Pennsylvania had been bitching about the cost to maintain I-80 for decades. So they finally got their chance. The Transportation Bill passed back then allowed for 3 ‘tolling experiments’, one of them being I-80 in Pennsylvania. So Pennsylvania put in their proposal to the Obama Administration and it got REJECTED.

Why? Because Pennsylvania also wanted to use I-80 as a ‘revenue engine’ (a little toll road lingo) for other purposes, particularly mass transit in Phili and Pittsburgh. The law didn’t allow it...the money collected could ONLY be used to maintain that highway. The state was invited to re-submit, but decided it wasn’t worth the effort.

Bottom line, and the DIRTY LITTLE SECRET about freeways - they are VERY CHEAP to operate once built. Their value is in their right-of-way. That’s why these crony ‘operators’ are salivating at the chance to monopolize these highways, because they cost next to nothing to operate, but when they connect NYC to Chicago/Cleveland/Detroit they can collect HUGE amounts of revenue.


77 posted on 06/12/2017 6:35:49 AM PDT by BobL (In Honor of the NeverTrumpers, I declare myself as FR's first 'Imitation NeverTrumper')
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To: 9YearLurker

You are correct, it is horrible but what I don’t see are the non-toll ring roads. Unless that is you are referring to the “surface streets” along the toll roads that are almost constantly jammed worse than the toll roads, often flooded and are full of stop lights. Some alternative that.


78 posted on 06/12/2017 6:36:18 AM PDT by Sequoyah101 (It feels like we have exchanged our dreams for survival. We just have a few days that don't suck.)
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To: BobL

Ahem. You missed one.

https://en.wikipedia.org/wiki/Interstate_30

“The Dallas–Fort Worth Turnpike was a 30-mile (48 km) toll highway in the Dallas-Fort Worth Metroplex. It operated between 1957 and 1977, afterward becoming a nondescript part of I-30. The road, three lanes in each direction but later widened, is the only direct connection between downtown Fort Worth and downtown Dallas, Texas. -snip-

The proposed expressway was studied as early as 1944, but was turned down by the state engineer due to the expense. However, in 1953, the state legislature created the Texas Turnpike Authority, which in 1955 raised $58.5 million (equivalent to $1.27 billion in 2015) to build the project. Construction started later that year. On August 27, 1957, the highway was open to traffic, but the official opening came a week later on September 5. The turnpike’s presence stimulated growth in Arlington and Grand Prairie and facilitated construction of Six Flags Over Texas. On December 31, 1977, the bonds were paid off and the freeway was handed over to the state Department of Transportation, toll collection ceased, and the tollbooths were removed during the following week.”

The article doesn’t mention that the Feds also didn’t see the point of what would become the Dallas Fort Worth Turnpike and refused to fund it, which is why the state engineer also turned it down. People with more of a clue said, “Okay, we’ll build it as a tollway instead.”

Seems to have worked out really well - I-30 is a massive thoroughfare in DFW now and the area would long ago have gridlocked without it.


79 posted on 06/12/2017 6:37:11 AM PDT by Spktyr (Overwhelmingly superior firepower and the willingness to use it is the only proven peace solution.)
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To: Alberta's Child

Yeah buddy, I wants me some of that deal! /s

Only extremely high profit could motivate me to invest in that.


80 posted on 06/12/2017 6:37:20 AM PDT by Sequoyah101 (It feels like we have exchanged our dreams for survival. We just have a few days that don't suck.)
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