Time – Thursday, Oct. 18, 2007:
For states and cities looking to upgrade or replace aging infrastructure, partnering with private players is the biggest idea to come along since the interstate highway system started ribboning the country with asphalt in the 1950s. The appeal: governments can stop worrying about roads, bridges and tunnels, and companies get lucrative leases that allow them to collect money from drivers for generations. The craze is being driven by investors who crave the steady cash flow of decades’ worth of tolls
So what’s not to love? The most common gripe is populist. Tolls often skyrocket under private owners, though with the blessing of elected officials, who avoid the political costs of raising tolls or taxes themselves. That’s how privatized roads deliver double-digit returns for investors and often lead to upgrades like electronic tolling. But there are other devils lurking in the details, like noncompete clauses that may prevent transportation agencies from building new roads, or the inability to use roads for economic development by, say, adding a new exit to attract businesses. Some officials get queasy about locking themselves into long leases; Colorado officials already regret offering a 99-year lease for the Northwest Parkway. Others are turned off by the hard sell from investment bankers who advise states on some deals and bid on others. “This should be the last option,” says Texas state senator John Carona, “not the first.”
This really isn’t an issue of letting the free market work it out. Under a true free market it’d be nearly impossible for the private sector to buy the sufficient property under actual market prices to build roads, as property owners along the proposed roads would hold out for the very top dollar. Only the government, through its use of eminent domain, can force land owners to sell, not for whatever the market will bear, but for a government dictated “fair price.”
Once the government gives select corporations greater property rights than citizens and the right of eminent domain, the market is no longer free. It’s fascism.
#19 – LOL!
At least I know my civics! Good way to duck the issue though!
Good little neocon!
#24
I’ll remind you that you said that when all of your food comes from China because your local farm has become a golf course.
#3 – You lack vision.
“The wealthy will drive where and when they want no matter the tolls or the price of gas.”
True. So this is a bad idea because you are jealous of rich people? There’s an incentive for you to earn more…so you can drive more (if that is really how you want to spend your money).
The rest of us…might like to take the kids out to the mountains occasionally to get them out from in front of the tube.
Guess you’ll have to find some other way to entertain your kids. How about you start by getting rid of the “tube”?
I would like to entertain my kids by taking them on a cruise. Oh, wait, I can’t afford to do that because I’m not rich. That’s not fair. Cruises should be free!
So having more stores and businesses out farther from the city, nearer where we live, won’t cause more sprawl?
The businesses won’t continue to move outwards, genius, because you won’t continue to move outwards. It will be more cost-effective for you to live closer to work and shopping. There will be some shifting initially, but this will quickly put an end to the bulk of sprawl.
My son’s school is 4.5 miles from home; average commute, 45 minutes.
Thanks for proving my point. You can’t commute 4.5 miles in less than 45 minutes because there are too many cars on the road. How do you solve that? Introduce an incentive to remove the unnecessary drivers.
#17, No, the government is a tool established by “we the people” to preserve their rights; they are not necessarily one and the same.
And I think you have gotten yourself confused as to what neo-conservatives think about the abilities of government.
In the UK Private (as in, not government OR corporate) roads are usually the worst kept roads imaginable.
Toll roads are all government owned – the toll pays for the cost of building (say, a bridge) or upkeep (again, often a bridge, but other places too).
In france I never found a private road, at least in Paris, Verseille, Britaney, or Normandy.. outside there I have no idea.
So Frank – can you please provide some evidence for this statement that it’s “common” , and not just that it occasionally happens – because most Europeans I know (including this one) would think it a REALLY bad idea.
Sorry, that should have been Italy, not France.
And France, too.
Cofiroute has about 900 km of private toll expressways in west/central France.
37. Frank, so its OK with you if a foreign entity builds and owns roads and other infrastructure in the US?
http://tinyurl.com/2vjl44
Roads operated by Cintra include Highway 407 (Ontario), the Chicago Skyway, the Indiana Toll Road, and numerous roads in Spain, Portugal and Ireland, as well as the Trans-Texas Corridor (currently in development, to be operated as a partnership with San Antonio, Texas based Zachry Construction Company).
Why do you hate my country Frank?
I don’t have a problem with US investment in other countries, and I don’t have a problem if other countries invest in the US.
Although I will thank you for not using the phrase “NAFTA Superhighway”.
Trans-Texas Corridor more platable? You’re welcome. I guess I do have a problem paying foreign corp. to drive on US roads. Hell I have a problem paying tolls period. I pay enough in taxes already.
Actually, I would rather see highways paid for by tolls instead of by taxes. I would prefer that only the people that use them have to pay for them.
30 and 40
The ONLY reason that Texas chose to have a foreign company build this road is because Texans, being the good little conservatives they are, think that roads should be magically built by the road gnomes with no tax dollars spent.
Cintra got the contract becuase these roads will be built with virtually no public funds. You cannot have it both ways… whining about paying too much taxes and then screaming when states are forced to get creative to provide the roads the same screamers demand to get them to Dallas for the big NASCAR events.
Americans are pathetic when it comes to taxes. We pay lower taxes than almost any industrial country in the world and then cannot understand when we get less services.
Grow the fuck up and take a look around next time you cry about your “high” taxes.
Actually that should have read 38 and 40 not 30 and 40
41. That seems unfair to people who are exposed to them regularly. In Western Colorado there are zero toll roads, and the roads are kept up beautifully, not a pothole in sight. I drove cross country (east) this summer and could not believe how many tolls I had to pay outside this state. And the toll roads were without exeption, the worst.
#41 – Actually, I would rather see highways paid for by tolls instead of by taxes. I would prefer that only the people that use them have to pay for them.
My apartment has never been on fire nor has it been broken into by criminals. I want to stop paying for fire and police services that I don’t use.
42. “Americans are pathetic when it comes to taxes. We pay lower taxes than almost any industrial country in the world and then cannot understand when we get less services.
Grow the fuck up and take a look around next time you cry about your “high” taxes.”
OK, Fuck You. I am not one of those. I want accountability for my tax dollars. When you can prove to me my money isnt being wasted, I’ll grow up. I dont mind taxes going to infrastructure, I do mind it going for pork.
41. Frank- by that logic, and since I have no children, I opt not to pay for the school system that is failing so miserably. Can I pick and choose which services I use and may be taxed for?
So, according to your logic, because we can’t pick and choose all of the services which will be covered by user fees instead of taxation, we shouldn’t be allowed to chose any.
Sorry, but that’s just dumb.
OFTLO –
Actually, where I live, fire and rescue services are provided by volunteers and donations, not by taxes.
Also, using fire/rescue services or police as a counterexample to roads is comparing apples to oranges. You can choose whether you want to drive on the Chicago Skyway or not. You can’t choose whether you’re ever going to need fire/rescue services or police.
The government taking peoples land, building roads on the public dollar, and then selling them to corporations for pennies on the dollar is -fraud- of the most naked and galling sort. The fact that some seem so eager to defend this shows there are fools in this world who will defend anything, if only to avoid the burden of agreement, which is the need for action.
If the corporation were to buy the road at fair market prices from the landowners, build it and administer it themselves, with no public funds whatsoever, then that would be capitalist. Building it with public funds, then passing it over to a corporation to screw the people more, is not capitalist, it is, charitably, mercantilism, the defense of large corporations over the interest of the people (for instance, the Hudson Bay company’s relation to England) and possibly a bridge to fascism, the merger of corporate and state power.
#50
I can only speak to the Texas highway that has been discussed but it applies to all Cintra (no, I am not employed by them I am just in the position to know something about them) dealing in North America.
The land which is being purchased will be owned by the State of Texas and not Cintra. The right to collect tolls will be leased to Cintra for 50 years at which time control will revert to the State.
No money is being taken from landowners and given to a foreign company. Lease is not give. Is it a good deal for Cintra? Of course it is, they have done similar deals all over the world. That is why they can spend over $6 Billion of their own money to build the roads in the first place. No land is being “given” to Cintra and it si simply a lie to claim so.
Before you call someone a fool I suggest you know what the fuck you are talking about.
By the way, I am no lunatic neocon. i am a liveral Democrat who remembers the time when my party did not oppose public works which will lead to thousands of jobs for Americans. The Trans-Texas Corridor, for example, will be designed, built and maintained by Texans and Texas companies. Take a look at Cintra’s team if you don’t believe it.
A 50 year ‘lease’? With no escape clause, and no ongoing payments?
Can I get my house on that deal?
Don’t be credulous; our leaders care not for the definition of words, why should you? Judge people by their actions, not their words. That deal is a ‘lease’ in the same sense that waterboarding isn’t ‘torture.’
and then selling them to corporations for pennies on the dollar
What is the basis for this hysterical statement, Li?
#50 I disagree with your statement about ‘the land being purchased’.
The farmers and landowners are not being given an option to sell. They are being forced under imminent domain. So the land is being taken and they are being given less than market value for it. This is a land grab, no other way to look at it. If you doubt this, just travel down 71, 290, etc and look at all of the NO DOT, NO TCC tresspassing, you are not wanted signs dotting the roadway.
As someone that is in the direct path of the TCC. I do know what I am talking about.
PS> A 50 year lease is a lifetime lease for all of us, so in our timeframe, there is no difference between lease and give.
NO DOT, NO TCC tresspassing, you are not wanted signs dotting the roadway.
Could you clarifiy this statement? Where are these signs? On whose land?
Checkout what happened in Sydney. The state government wants a new tunnel built so they offer the contract and subsequent tolls to the highest bidder. The winner has to make an enormous profit to pay for the bid, so the tolls are exorbitantly high. The high price makes the tunnel hugely unpopular so the local population boycott it. Then the government steps in and because of the terms of the contract and promised through traffic, it CLOSES DOWN SURROUNDING ROADS TO INDUCE TRAFFIC PROBLEMS to FORCE DRIVERS TO USE THE NEW TUNNEL!!! That’s what turning over infrastructure to private enterprise can do. Yay.
The state government wants a new tunnel built so they offer the contract and subsequent tolls to the highest bidder.
Since (I assume) you’re talking about a purchase here, rather than provision of services (which would typically go to the LOWEST bidder), then what happpened to the money that the government received from the purchase?
To all those who can’t do math themselves (that would be you Frank). . . let’s crunch some numbers, shall we?
The road in question: 85 miles of road on State Highway 12. I think only 12 miles of this or so is the contract road. Most of it is elevated, and eight lane.
2.5 billion plus 700 million in contract money (3.2 billion dollars). Most of that goes to finish the road, not to the state,
http://seattlepi.nwsource.com/transportation/271245_noviaduct23.html
This project for an equivalent elevated highway to highway 12, only 2.2 miles long, is estimated to cost three billion dollars. So let’s be extremely conservative and assume that the remaining ten miles of road only cost 200 mil. Sounds like it’s kind of a good deal, eh? At least it breaks even.
But that would be a complete failure to understand what that stretch of road is -worth-! It’s one of the most travelled roads in Texas. A little bit of digging shows that even normal city roads carry 100 cars per lane, per hour on average, and this is a fast road going to the Dallas International Airport and the business center of one of America’s largest cities!
800 cars per hour x 24 hours x 3 dollars = 57,600 per day. (over a billion in 50 years)
Wouldn’t you like to be able to make fifty seven grand per day on cost? And keep in mind that this is cars alone. Semi-Trucks are charged nearly ten dollars a trip! Oh, and this is assuming they never raise rates (yeah right!). Actually, this is making every possible conservative assumption in the accounting of the project. What is more likely is that they are getting a 10 billion dollar highway for 3 billion and screwing the people of Texas out of tens of billions more!
The equivalent in our world would be if the car dealer payed us three hundred dollars a day to drive their car, while the leaser only had to pay a few thousand up front. Once again, where can I get a deal like that? I can’t, because I am not a faceless entity whose only moral imperative is profit, i.e. a corporation. I would need to have my own lobbyist at least to get a deal like that.
Obviously some people on this forum are so slow they can’t even grasp multiple meanings for a word. After all, the cost of something is not its value, and buying on cost means paying less than that value. I would tell you to bear with me, but I’m afraid you would likely call animal control.
Of course, I never even used the word ‘value,’ so I’m at a loss for how I could flip onto a term I didn’t use, but I suppose it would be expecting too much to expect someone so untalented in both language and arithmetic to be able to read accurately.
Perhaps I should have used “total return on investment” rather than “value”, Li, and clarified that “cost” meant “initial cost”.
But as I said before, your calculation of revenue is very sloppy, and your method of estimating the initial cost – i.e., claiming that the last 10 miles of the highway will cost, per mile, barely 1/7 what the first 2.2 miles will cost – is, to put it charitably, extremely arbitrary.