Private Toll Road Investors Shift Revenue Risk to States

[xchrom]

http://www.bloomberg.com/news/2013-11-27/private-toll-road-investors-shift-revenue-risk-to-states.html

Companies that build private toll roads are pressing states to assume more financial risk of traffic not meeting expectations, a change that benefits the operators while threatening to increase taxpayer costs.

Illinois and Indiana are among states offering set payments instead of the right to keep toll revenue, the standard financing method in the past. A similar approach is being used in Florida to expand highways in Fort Lauderdale and Orlando, and by the Port Authority of New York and New Jersey for a bridge to Staten Island.

The new financing arrangement decreases the risk for operators, which include Madrid-based Ferrovial SA and Sydney-based Macquarie Atlas Roads Group, after at least 11 private U.S. toll projects since 1995 have struggled financially due to traffic not meeting projections.

“We are seeing more of that because investors are a bit skittish about the U.S. market,” said Richard Geddes, director of Cornell University’s Program in Infrastructure Policy in Ithaca, New York. “If it’s a new road, there is a lot of risk on how many vans, trucks, motorcycles and other vehicles will end up paying the tolls.”

[Eric J in MN]

1. Private toll roads are something out of the Middle Ages.

21st century roads should be owned by the public.

Not a corporation trying to privatize profits and socialize losses.

[One_Life_To_Give]

10. 19th Century IIRC

Their bonds were traded as common currency at the dawn of the 19th Century.

[octoberlib]

2. When Macquarie built a privatized toll road in San Diego ,

the toll fees were so high that customers started taking residential roads to get where they needed to go. I think San Diego ended up buying the highway from Macquarie after they went bankrupt. Privatization of infrastructure just doesn't work. Hear that Bill and Hillary, with your public/private partnerships?

At ALEC’s 40th anniversary party in Chicago this past August, the corporate lobbyists and legislators on the Commerce, Insurance, and Economic Development Task Force brushed off a statement of principles on transportation urging “a market-driven highway system” that operates “on a user-pays basis.”

ALEC’s vision would implement a fractured system of toll roads crisscrossing the country, with the proceeds going directly into the coffers of private corporations and their shareholders. This is a far cry from Eisenhower’s vision of “mighty network of highways spread across our country” seamlessly enhancing the nation’s economy, public safety and the national defense.

http://prwatch.org/news/2013/11/12301/corporate-expressways-brought-you-macqaurie-and-transurban

[Renew Deal]

3. Let them fail

[HereSince1628]

4. Guaranteed revenue tollways...what's the point of privatization?

How does that help the state to meet taxpayer needs with the 'legendary' nimbleness of a private corporation?

Half the country can't have medicaid expansion, as a nation we must cut Medicare and SS, but we MUST guarantee toll-revenue for private companies?

[Laelth]

8. Good question.

If you ask me, the point of privatization is and always has been to move public wealth into the pockets of private individuals. It has been remarkable successful in this endeavor. It is only rarely beneficial to the people.

-Laelth

[Laelth]

5. Roads should not be privately financed.

Roads are, and always have been, public concerns. Involving private industry in this very public endeavor leads to cronyism and, by design, shifts wealth from the public to the private sector.

-Laelth

[jsr]

6. Recommend

[marmar]

7. k/r

[winstars]

9. In CA, how can "freeways" cost $$$ to drive on them???

Moved out here 10 years ago and just when I start calling them freeways instead of highways like in NY, they start this toll BS on some of the roads... WTF?

[Eleanors38]

11. Same crap in Texas, where a Spanish company built

a toll road around Austin, and is losing $ big-time with its toll scheme. If course, to save this darling company from collapse, the state may buy the road "back" at a very reasonable rate -- for the company. A plane could safely land on this toll road, and take off again without encountering much traffic. I have yet to use it, and won't.