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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: Spktyr

“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.”

And they won’t. Do you have any clue what Houston has to go through to get a chemical plant ‘approved’ by DC? And it has nothing to do with highway funds...it simply is the law.


81 posted on 06/12/2017 6:37:43 AM PDT by BobL (In Honor of the NeverTrumpers, I declare myself as FR's first 'Imitation NeverTrumper')
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To: Sequoyah101

Yeah, they both seem problematic.


82 posted on 06/12/2017 6:39:10 AM PDT by 9YearLurker
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To: 9YearLurker

The only thing I will give the toll roads is speed of construction. Getting the cash flow started is a massive motivation for speed of construction. The NW section of 99 seemed like it sprung up almost overnight.f

You will NEVER see any state project go that fast.


83 posted on 06/12/2017 6:39:21 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

“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.”

We’re talking DC, not Texas and we’re talking selling off Interstates. What Texas is doing is tolerable (for now)...but the BIG PRIZE, the one that has Goldman pounding the doors, is GETTING RID of the ‘free’ lanes, as is being proposed nationally.

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

Maybe later, but I drove that stretch many times before there were HOV lanes...and that was in the TTC days. All lanes at that time were open to all.

“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.”

I’m no big fan of HOV lanes or the mandates for them, but the hell if I’m going to support handing over our freeway system to Goldman and Cintra over it.


84 posted on 06/12/2017 6:42:37 AM PDT by BobL (In Honor of the NeverTrumpers, I declare myself as FR's first 'Imitation NeverTrumper')
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To: vooch

Pure capitalism is just as bad as pure socialism.

Those that have not learned that you can’t trust anybody, including the free market, are eventually going to learn a hard lesson.

John D. Rockefeller would be very proud of you.


85 posted on 06/12/2017 6:42:39 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: Sequoyah101

He’s thinking of 610 and the ring formed by 10/45/69 downtown, I suspect.


86 posted on 06/12/2017 6:45:41 AM PDT by Spktyr (Overwhelmingly superior firepower and the willingness to use it is the only proven peace solution.)
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To: vooch

In what fantasy world does that happen?

The companies I’ve worked with, and that is a lot of them, may think strategically for 5 or more years but it is rare that they act on more than a quarter to quarter mentality.

Planner’s droop shows up at about 5 years in the long range plan. The reason is you can seldom see that far in regulation, government or society.


87 posted on 06/12/2017 6:46:18 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

That’s not anywhere near the same. Getting a chemical plant approved is considerably different than telling a state “Hey, there’s going to be a $3 billion hole in your budget if you want to maintain those roads we put up and not get lynched by your constituents. Be a shame if you didn’t get re-elected because your voters got mad at you for a bridge collapse.” One is denial, the other is extortion.


88 posted on 06/12/2017 6:49:23 AM PDT by Spktyr (Overwhelmingly superior firepower and the willingness to use it is the only proven peace solution.)
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To: AndyJackson; vooch

You said it Andy and said it very well on two accounts.

“Reinventing Government” boy did that one turn out well. NOT! I can tell you one very efficient project that was destroyed by reinventing government and privatization. One need only look at the locks and dams of the corps of engineers to see what privititazition has done. Costs did not go down at all but the facilities bought at great cost now look like hell. The change is shameful. What was once something the taxpayer could look at, be proud of and use with pleasure is now becoming more like a slum. At least we once thought we were getting soemthing for our tax dollar.

Shill is a good title.


89 posted on 06/12/2017 6:52:11 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

“That’s not anywhere near the same.”

Not to Texans...all we see is DC putting us under their thumbs. If you don’t think they’ll find other ways to do that, you have NO CLUE as to how DC operates.


90 posted on 06/12/2017 6:52:51 AM PDT by BobL (In Honor of the NeverTrumpers, I declare myself as FR's first 'Imitation NeverTrumper')
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To: BobL

In the 90s they took away 1+ lane space each way for HOV usage on I-10 near El Paso. It was stupid but it was also mandated by the Feds. Perry’s proposal was to convert them to High Occupancy/Toll lanes, which was permitted by the Feds. There was no plan that I ever saw (and I was following the TTC era stuff closely) to convert I-10 to all toll at any time.

If DC’s conversion sales/leases/whatever were to be held to the same standards and restrictions as the I-635 conversion in Dallas (where free lanes were retained), would you have a problem with it? Because from what I’ve heard, they’ve called a bunch of guys from what used to be the Texas Turnpike Authority up to Washington to help them with this.


91 posted on 06/12/2017 6:55:44 AM PDT by Spktyr (Overwhelmingly superior firepower and the willingness to use it is the only proven peace solution.)
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To: BobL

Again - permitting an operation is nowhere near the strong arm extortion directly exerted by the Feds with the club of highway money. Keep in mind they use that club on *every* state and apply it mercilessly.


92 posted on 06/12/2017 6:57:16 AM PDT by Spktyr (Overwhelmingly superior firepower and the willingness to use it is the only proven peace solution.)
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To: AndyJackson

Andy, you are wasting your breath. Either nothing to work with or some other motivation is in control of your opponent.

As I have said before, pure capitalism is just as bad as pure socialism.

Paul Harvey said it well, “Self-government without self-control will not work.” Given the opportunity to feather their own nest most people do not have self-control and must therefore be controlled.

I found an answer to a question I have had for ages, Is man inately good or bad? The answer is in Genesis 6 or 7 and it is that man is inately BAD. God says so when He regrets the flood and promises not to do that again but then He says He should have known better than to expect man to become anything but wicked since He made man and gave him free will.


93 posted on 06/12/2017 6:58:45 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: vooch; AndyJackson

I’m giving benefit of doubt and assuming you are merely being sarcastic.

The alternate to being sarcastic is not very good.


94 posted on 06/12/2017 7:02:13 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

Raising tolls to reduce traffic congestio is EXACTLY what Houston did. Problem was, there was no other route to take.


95 posted on 06/12/2017 7:06:34 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

HCTRA has become the most powerful government entity in the Houston area. They operate like a slush fund.

The did increase tolls to reduce congestion but the alternative route was so bad people use the toll roads. To say they have a choice is at best an economy with the truth.

I’d like to see the deal made for Grand Parkway NW from I-10 to I-45. That must have been a sweet deal to have gotten built so fast.


96 posted on 06/12/2017 7:10:51 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: Sequoyah101

“Raising tolls to reduce traffic congestio is EXACTLY what Houston did. Problem was, there was no other route to take.”

I agree...Beltway 8 is badly overpriced. The temptation to address congestion by raising tolls certainly does spill over to the government side...but the difference being that there is at least some degree of recourse.

These 50 to 99 year contracts that a single corrupt administration can (and do) sign, has absolutely no recourse, as the Canadians were forced to learn with their 407 ETR highway, when they tried in court to re-open the contract. These companies hire some damn good lawyers - and people like Rick Perry, even if he weren’t corrupted, would not stand a chance against them in ‘negotiations’. It’s a scary thought that 90% of the country could easily be priced off the Interstates if our politicians screw up these deals. But, I guess, if I did have the extra $10k to $20k a year to drive on these roads, they’d probably be enjoyable...at least for me.


97 posted on 06/12/2017 7:18:47 AM PDT by BobL (In Honor of the NeverTrumpers, I declare myself as FR's first 'Imitation NeverTrumper')
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To: Spktyr

Looks like the web has been ‘cleansed’ of Perry’s antics back then...can’t find anything. So we’ll each have our recollections - and mine is some very noisy ‘hearings’ when the people of El Paso were told that their free days on I-10 were going to end. And there were several other similar cases and people were pissed and managed to stop it in all cases that I can think of...thankfully.


98 posted on 06/12/2017 7:21:59 AM PDT by BobL (In Honor of the NeverTrumpers, I declare myself as FR's first 'Imitation NeverTrumper')
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To: BobL

The nationwide network of toll roads would become the near exclusive territory of the well heeled and business use. Truckers would still use these roads almost exclusively since all their cost would either be tax deductible or simply passed on to the consumer.

I worked in the oilfield for 40 years in operations and financial positions. I laughed out loud when some knot head would either think costs could be passed on to the service company or the service company could somehow absorb costs.

Like government where the only revenue comes from the tax payer, in the oilfield the only revenue for anyone associated comes from the wellhead.


99 posted on 06/12/2017 7:25:49 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: Sequoyah101

well they sure enough did a good job squezzing service companies to lower their fracking costs.


100 posted on 06/12/2017 7:28:28 AM PDT by Undecided 2012
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