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American Highways For Sale!!!!

Mike

Well-known member
Foreign Companies Are Buying Up American Highways and Bridges Built by U.S. Taxpayers
Associated Press ^ | Saturday July 15 | Leslie Miller

Posted on 07/16/2006 10:30:40 AM PDT by cope85

Foreign Companies Are Buying Up American Highways and Bridges Built by U.S. Taxpayers

WASHINGTON (AP) -- Roads and bridges built by U.S. taxpayers are starting to be sold off, and so far foreign-owned companies are doing the buying. On a single day in June, an Australian-Spanish partnership paid $3.8 billion to lease the Indiana Toll Road. An Australian company bought a 99-year lease on Virginia's Pocahontas Parkway, and Texas officials decided to let a Spanish-American partnership build and run a toll road from Austin to Seguin for 50 years.

Few people know that the tolls from the U.S. side of the tunnel between Detroit and Windsor, Canada, go to a subsidiary of an Australian company -- which also owns a bridge in Alabama.

Some experts welcome the trend. Robert Poole, transportation director for the conservative think tank Reason Foundation, said private investors can raise more money than politicians to build new roads because these kind of owners are willing to raise tolls.

"They depoliticize the tolling decision," Poole said. Besides, he said, foreign companies have purchased infrastructure in Europe for years; only now are U.S. companies beginning to get into the business of buying roads and bridges.

Gas taxes and user fees have fueled the expansion of the nation's highway system. Thousands of miles of roads built since the 1950s changed the landscape, accelerating the growth of suburbia and creating a reliance on motor vehicles to move freight, get to work and take vacations.

In 1956, President Eisenhower pushed to create the interstate highway system for a different: to move troops and tanks and evacuate civilians.

The Bush administration's plan to let a foreign company manage U.S. ports met a storm of protest in February. But plans to sell or lease highways to companies outside the United States have not met such resistance.

John Foote, senior fellow at Harvard's Kennedy School of Government, said the government can take over a highway in an emergency. But he objects to selling roads to raise cash.

But that is just what Chicago has done.

Last year, the city sold a 99-year lease on the eight-mile Chicago Skyway for $1.83 billion. The buyer was the same consortium that leased the Indiana Toll Road -- Macquarie Infrastructure Group of Sydney, Australia, and Cintra Concesiones de Infraestructuras de Transporte of Madrid, Spain.

Chicago used the money to pay off debt and fund road projects. Skyway tolls rose 50 cents, to $2.50; By 2017, they will reach $5.

The Indiana Toll Road lease is a better deal, Foote thinks, because the proceeds will pay for urgent projects such as road and bridge improvements.

That need is precisely why cities and states have begun to look to foreign investors.

Between 1980 and 2004, people drove 94 percent more highway miles, according to Federal Highway Administration statistics. But the number of new highway lane miles rose by only 6 percent.

Washington is not likely to produce more money to build roads. The federal highway fund -- which will have a balance of about $16 billion by the end of 2006 -- will run out in 2009 or 2010, according to White House and congressional estimates.

About half the states now let companies build and operate roads. Many changed their laws recently to do so.

So Illinois lawmakers are examining privatizing the Illinois Tollway, New Jersey lawmakers are considering selling 49 percent of the state's two big toll roads and a gubernatorial candidate in Ohio wants to sell the turnpike.

Indiana Gov. Mitch Daniels, who championed his state's toll road deal, now wants investors to build and operate a toll road from Indianapolis to Evansville.

Patrick Bauer, the Indiana House's Democratic leader, says such deals are taxpayer rip-offs.

Bauer believes Macquarie-Cintra could make $133 billion over the 75-year life of the Indiana Toll Road lease -- for which Indiana got $3.8 billion.

"In five, maybe 10 years, all that money is gone, and the tolls keep rising and the money keeps flowing into the foreign coffers," Bauer said.

Orange County, Calif., got burned by a toll-road lease for a different reason.

The road, part of state Route 91, was built and run for $130 million by California Private Transportation Company, partly owned by France-based Compagnie Financiere et Industrielle des Autoroutes. The toll road opened in 1995.

Seven years later, Orange County was looking at gridlock. But it could not build more roads because of a provision in the lease. So it bought back the lease -- for $207.5 million.

To encourage more domestic investment in highways, former Transportation Secretary Norman Y. Mineta made a pitch to Wall Street on May 23.

"The time is now for United States investors -- including our financial, construction and engineering institutions -- to get involved in transportation investments," said Mineta, who left office July 7.

U.S. companies are getting the message.

San Antonio-based Zachry Construction Co., along with Cintra, received approval on June 29 for a 50-year lease to build and run a toll road from Austin to Seguin for $1.3 billion.

That is part of Texas Gov. Rick Perry's vision to attract more than $80 billion in private funds for roads by 2030. He wants a new tollway from Oklahoma to Mexico and the Gulf Coast, and one from Shreveport, La., and Texarkana to Mexico. Cintra-Zachry reached a $7.2 billion deal last year to develop the project's first phase. The announcement of a $1.3 billion deal in June was part of that $7.2 billion agreement, said Perry's spokesman, Robert Black.

"In Texas, our population is going to double in the next 40 years and our current infrastructure can't handle that growth," Black said.

Not everyone in Texas buys the idea. Harris County officials recently voted against selling three toll roads. Also, independent gubernatorial candidate Carole Keeton Strayhorn opposes Perry's toll road plan.

"Texas freeways belong to Texans, not foreign companies," she said
 

IL Rancher

Well-known member
Illinois and Chicago are being real shortsighted on this. I have wathd out governor do so many short sighted things in his 3 years in office that when he gets around to selling of the tollways I don't think the state will own anything.The state does things like sell buildings that aren't being used (not a terrible thing) but than they go around and build prisons that sit empty because they won't fund the guards/ staff for them. Than they complain about prison over population and build another prison :roll: . The state cuts funding to the DNR (One of the few departments that makes money) by laying off employees and shutting down hatcheries (the things that help make money for the state) but fly the director all over the place, including pheasent hunts in S.Dakota and trips to his hometown for no apparent reason. Of course the governor doesn't even live in the capital but instead taks 2-3 flighs a week down to springfield from his home in Chicago on a state owned plane.. This state is nuts...

Some of it is the citzens problem, no one wants to cut programs so we won't be in debt and no one wants to really raise taxes/fees to balance the budget. Selling off/leasing off hard assets seems the most logical. If they want the toll roads to be sold for more money why don't they just bump up fairs? Oh wait, they just did that last year by 100%. Of course, it was the first raise in 10 years.
 

Econ101

Well-known member
This allows private companies to profit from the powers of the state (eminent domain). I think this is a grave concern.

I have the same concerns over pipelines and other utilities. The phone industry has solved this problem by making the use of the phone land lines public access to some degree. This seems to be going in the other direction.

I think we have some politicians who just don't understand the relationship between government and the people and business.

It will eat away at our freedoms as a people and tend to concentrate power and its abuse.
 

RoperAB

Well-known member
Your worried over nothing.
#1 Your in charge of these highways.
#2 This is good for your economies if it saves you from borrowing the money to build these roads.
#3 Its better to deal with a foreign company because if things go to crap you can always throw them out. You cant do the same thing with a domestic corporation.
 

Econ101

Well-known member
RoperAB said:
Your worried over nothing.
#1 Your in charge of these highways.
#2 This is good for your economies if it saves you from borrowing the money to build these roads.
#3 Its better to deal with a foreign company because if things go to crap you can always throw them out. You cant do the same thing with a domestic corporation.

Roper, we have seen this type of nationalization of resources in the world before and condemed it. Are we to just to the same thing?

If this were so practical, why hasn't Canada nationalized Tyson and Cargill instead of just paying them off?

After all......... you ship beef to Japan and the U.S. doesn't.
 

RoperAB

Well-known member
Econ101 said:
RoperAB said:
Your worried over nothing.
#1 Your in charge of these highways.
#2 This is good for your economies if it saves you from borrowing the money to build these roads.
#3 Its better to deal with a foreign company because if things go to crap you can always throw them out. You cant do the same thing with a domestic corporation.

Roper, we have seen this type of nationalization of resources in the world before and condemed it. Are we to just to the same thing?

If this were so practical, why hasn't Canada nationalized Tyson and Cargill instead of just paying them off?

After all......... you ship beef to Japan and the U.S. doesn't.

What are you talking about?
I do believe this has been done in Canada. Wasnt the Kokahala<spelling?> in BC private? Its the big toll road in the lower mainland from Kamloops to Merrit? or it almost goes to Vancouver.
Im sure broke provinces like Saskatchewan would be glad if foreign investors wanted to build toll roads in their province.
If worst came to worse and it became a problem, parliment with a stroke of the pen could "nationalize" the highway.
Foreigners are always easier to handle than locals. Why do you think AB always looks for foreign investors? They are easier to handle than the "connected" Bay Street Boys from back east.
 

Brad S

Well-known member
Roper, I don't think that nationalizing crap would work as well in Canada and the US as we see done everywhere else because everyone in Canada and the US (even foreigners) can get their day in court for redress.
 

RoperAB

Well-known member
Brad S said:
Roper, I don't think that nationalizing crap would work as well in Canada and the US as we see done everywhere else because everyone in Canada and the US (even foreigners) can get their day in court for redress.

I dont believe in nationalizing private industries either. I was making the point that these highways are under US control and regulations. If the company failed to live up to these regulations or what standards are laid out for them by your government the highways could always be taken back if necessary.
Okay here is a better example, but please bear with me because im on my first cup of coffee. Say a Canadian outfit builds a bussiness in Texas. Say the outfit starts having labour troubles. Well its going to be easy for the workers to start a "damn the Canadians campain"who are exploiting the American workers. Look at how rcalf tries to blame us for everything.
Whos going to be onside with the Canadian investors? The politicians down there? No because we cant even vote. Now if that same company from Ontario located that business in Alberta they would have more influence and power because of friends and associates in Ottawa.
Foreign companies are always an easy target for regulations, inspectors,etc. You have more power over them than you do over American corporations.
 

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