UPDATE, February 9. 2007
Highway Users form coalition to oppose Highway Privatization added to website
Apparently a lot of other groups agree with us that highway privatization is a short-sighted solution with unknown long-term implications, and represents double taxation.
UPDATE Wednesday, January 24, 2007
(Presidential) Executive Order for Privatization Initiative added to website
I just located this document, and finally understand the history of the Feds supporting State and Local privatization of infrastructure.
In 1992, President George H. W. Bush signed this Executive Order to support State/Local privatization, because (according to the document) the market will be more efficient than government, and because this could provide a refund of grant funds to the Federal Government.
Read it in detail here.
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Privatization of the U.S. Highway Systemby B. Paulus, Webmaster 12/18/06 Origins of National Highway System
The U.S.1956 National Federal-Aid Highway Act-signed by President Eisenhower-authorized the connectivity of 41,000 miles of high quality highways across the United States. It was to be financed by a combination of the Highway Trust Fund, federally imposed user fees on motor fuels and state user fees.
Historical Goals of Surface TransportationThe purposes of the transportation system are for the obvious and the not so obvious reasons. A safe, efficient means of personal and business transportation, recreational travel and product movement are needed. President Eisenhower however, was mostly concerned with establishing a safe and efficient means for the evacuation of civilians and the deployment of our military in the event of a nuclear attack. Additional Goals TodayThe same needs are in our lives today, plus a few more. Our current national transportation system needs to safely deal with evacuations due to natural disasters or acts of terrorism, as well as the deployment of first responders and possibly the military to these sites. Additionally, illegal immigration has become an economic burden on our society, and therefore border control and subsequent access to our highway system is needed. Impact of Increased Foreign Trade on HighwaysOur foreign trade policy has emerged as a major factor in U.S. transportation policy as well. The policies started by NAFTA and expanded around the world called "FREE TRADE", have given huge monetary advantages to the trading partners who pay the lowest wages. Therefore, we are buying a lot from Asian countries (who pay 10c per hour and use child labor), and not selling them much in return. This has increased the influx of foreign goods to and across our country, putting new demands on our transportation system in terms of efficiency, increased traffic (as local manufacturers are replaced by goods entering our country through Mexico or California seaports) and safety and environmental concerns. Budget Deficits lead to Private-Public Partnerships (PPP)
Our highway system-ironically called "freeways"-is being "privatized" at an quickening pace because of cash and budget shortfalls at both the federal and state levels. Privatization is a way for politicians to avoid telling the public we are "broke", or in debt and cannot maintain our roads without INCREASED TAXES. Instead, in exchange for a huge (often one time) cash receipt, the governments are turning over our precious "freeways" to (mostly) foreign for-profit investors, who are TAXING us by charging tolls for what is still being paid for with TAX REVENUES. Tolls create Double TaxationIn other words, we are going to pay twice for the same roads. We will continue to pay gasoline taxes, federal and state income taxes-and in addition-we will pay NEW USER FEES and TOLLS. We may lose precious control of our highway systems at a time that we need them the most. YOU WILL BE AFFECTED IF YOU (OR ANYONE IN YOUR HOUSEHOLD).... drive on the highways and bridges and tunnels in our country are a passenger in any vehicle in the US buy any consumer product that must be transported over roads in the US pay federal or state income taxes buy gasoline These states already have undertaken privatization or are considering it: (see full article below):
Alabama Alaska California Colorado Florida Georgia Illinois Indiana Michigan Missouri New Jersey New York Ohio Oregon Pennsylvania Texas Utah Virginia For more excellent information on this topic, see:Federal Highway Administration Public Private Partnership Website A good article in the RenewAmerica Website- Foreign control of U.S. interstates encouraged by feds, bu Diane M. Grassi Texas Toll Party Website Also be sure to read the article below from Mother Jones listing current Privatization projects by state. Based on an article in MotherJones.com
Who's Buying Your Commute?
News: A state-by-state tally of highway privatization projects in the works.
By Leigh Ferrara January 1, 2007
Leigh Ferrara is a Senior Editorial Fellow at Mother Jones.
FLORIDA
FL - Florida was set to choose a company to build North Tampa's East-West Road Project, a 3.1-mile toll road to link I-75 and I-257, by December 18, but due to the resignation of the state expressway authority's executive director, the decision has been postponed. This will be the first privately financed highway construction project in Florida; it's valued at $150 million. Two companies, Plenary Roads Tampa, a subsidiary of a consortium from Australia, Canada, and New Zealand, and the Spanish firm Obrascon Huarte Lain SA., bid on the construction last month. Australian toll-road operator MIG was initially interested in the project but was rejected due to a conflict of interest by one of its proposed subcontractors.
OREGON
OR - In May 2006, the Oregon Department of Transportation entered into an agreement with the Oregon Transportation Improvement Group, a consortium made up of MIG, the engineering firm Hatch Mott MacDonald, and several other small investors. The group's purpose is to review the feasibility of funding three new highway construction projects through public-private partnerships. On December 12, MIG released a report on one of the projects, the Newberg-Dundee Bypass, a four-lane, 11-mile expressway, claiming that privately managed tolls were the best way to fund its construction, with MIG fronting $379 million and the state $150 million for initial costs. MIG would then manage and operate the road for 50 years.
COLORADO
CO - Super Slab, the 210-mile-long, 3-mile-wide privately funded toll road and rail corridor that Denver developer Ray Wells has been trying to get off the ground since the 1980s, would connect Fort Collins to areas south of Pueblo. Farmers and other residents whose properties stand to be divided by the road are adamantly opposed and have vowed not to sell their land; Halliburton subsidiary KBR is now working with Wells on the eminent domain issues. Last August, Wells renamed his project the Prairie Falcon Expressway.
ILLINOIS
IL - A state-commissioned valuation study released by Credit Suisse in August suggested that the Illinois Tollway, a 274-mile system, could yield the state upward of $24 billion for a 75-year lease. There are rumors that MIG is interested in the deal, and legislators will likely debate privatization of the road in 2007. Governor Rod Blagojevich has promised to veto any such bill that comes his way. Most agree that the toll road is too lucrative for the state to sell.
INDIANA
IN - Governor Mitch Daniels this month announced that Illinois and Indiana will partner to build the Illiana Expressway, a new freeway from Illinois' I-57 into Indiana, with private funding. Daniels was behind last year's biggest road privatization deal, the takeover of the 157-mile Indiana Toll Road by a consortium made up of MIG and the Spanish road operator Cintra that agreed to pay $3.8 billion for a 75-year lease. Goldman Sachs was Indiana's financial adviser on the deal. Daniels has also announced his intent to pursue the controversial extension of I-69 as part of a proposed NAFTA highway to Mexico. Indiana's part of the project would involve a privately funded, 75-mile bypass through five counties in the southern part of the state.
MISSOURI
MO - The Missouri Legislature passed legislation in May that allows the state to consider unsolicited proposals for public-private partnerships. The decision was sparked by the proposal for an eight-lane, $910 million Mississippi River bridge connecting Missouri and Illinois, just north of St. Louis. A report by the St. Louis Regional Business Council, released in January 2006, recommended a privatization strategy for this venture. Goldman Sachs is working with the council to assess the project. The governor of Illinois has proposed an alternative, a four-lane bridge that would only cost $410 million; so far, the states haven't been able to agree on a plan. NV - This past May, Boulder City ordered a study to assess the feasibility of installing tolls on a portion of US 93 that would bypass the community. The project cost is estimated at $400 million and is being pushed by city officials, but Nevada does not have laws on the books that allow for privatization deals.
NEW JERSEY
NJ - A report commissioned in September 2006 by Governor Jon Corzine has concluded that the New Jersey Turnpike, the Atlantic City Expressway, and the Garden State Parkway are lucrative assets that could be privatized. The state has taken no action so far.
NEW YORK
NY - New York law prohibits public-private partnerships, so privatizing the Long Island Expressway and the Tappan Zee Bridge could be an uphill battle, but this has not stopped Governor George Pataki from urging the Legislature to consider privatizing these and other state assets. Australia's MIG has already expressed interest in the Tappan Zee, proposing to build and run a replacement bridge.
OHIO
OH - A proposal to lease the Ohio Turnpike for as much as $6 billion for 99 years, championed by former Republican gubernatorial candidate (and former Ohio secretary of state) Ken Blackwell, may be dead in the water in the wake of Blackwell's defeat this past November.
TEXAS
TX - Two companies, Zachry American Infrastructure and ACS Infrastructure Development, submitted paperwork to the state in October expressing interest in building an extension of the Trans-Texas Corridor from Shreveport, Louisiana, and Texarkana, Texas, through Houston and into Mexico. Bluebonnet Infrastructure Investors, whose equity partner is Spanish road operator Cintra, is also interested; the Texas Department of Transportation is scheduled to ask for detailed proposals in early 2007. Cintra-Zachry has already been picked to build a 600-mile toll network in several places along I-35. The master plan for the I-35 section of the Trans-Texas Corridor was released in September of this year; it maps out a new I-35 connection south of San Antonio and a loop around the Dallas-Fort Worth area. The environmental impact is under review. Meanwhile, the Texas Department of Transportation is negotiating with private companies vying to construct a toll road from State Highway 121 to US 75, and a series of pay-to-drive fast lanes along I-635. And finally, a toll road loop in Bexar County has garnered offers from MIG and Cintra-Zachry.
VIRGINIA
VA - The Virginia Department of Transportation has an agreement with a consortium made up of the Australian toll road operator Transurban and the U.S. construction giant Fluor Corp. for the creation of 56 miles of "high-occupancy toll" lanes on both I-95 and I-395. The agreement instructs Fluor-Transurban to do a traffic and revenue study and file a detailed plan for the extra lanes, after which a public-private partnership could use toll revenue to fund the project, estimated at $913 million.
UTAH
UT - Goldman Sachs is advising the state on a 40-mile privately funded highway construction project that will connect Salt Lake City Airport with Utah County. The firm earlier this year helped convince the Legislature to pass a measure allowing the state to enter into such agreements.
PENNSYLVANIA
PA - Governor Ed Rendell is accepting proposals from firms for a potential lease of the Pennsylvania Turnpike, a 500-mile network of toll roads that has been valued at between $2 and $30 billion. Proposals are due later this month.
GEORGIA
GA - In May, the Georgia Department of Transportation entered into an interim agreement with Georgia Transportation Partners, a joint venture between Bechtel Infrastructure Corp. and Kiewit Southern Co., to expand the Northwest Corridor with as many as four new lanes in each direction. An environmental and engineering assessment of the estimated $2.1 billion project is under way. Private companies have also put in a bid to construct a new section of GW 400 from Highway 20 to I-85 through a public-private partnership. And in June 2006, Northwest TOT, a group that includes Goldman Sachs., McGuireWoods LLP, and the Atlanta engineering firm Post, Buckley, Schuh & Jernigan Inc. made an unsolicited proposal to the Georgia Department of Transportation to add truck-only toll lanes to I-285, which ties into the Northwest Corridor project. Four other companies have submitted proposals for such a project, and the state is evaluating each. On December 14, Goldman Sachs withdrew its offer. The firm will instead vie to advise the state on this decision and its future public-private partnership offers.
ALASKA
AK - The Knik Arm Bridge project from Anchorage to Point Mackenzie has been excoriated as one of the "bridges to nowhere" that regularly attract congressional earmarks. But even if Washington doesn't pitch in, the Knik Arm Bridge and Toll Authority says it will look to private funding for the bridge, estimated at up to $2 billion. An environmental impact report reveals that the project could be more expensive than expected, and that it would also endanger wildlife.
Past Projects:
MI - In January 2001, MIG's North American Infrastructure Group bought out Detroit & Canada Tunnel Corp.'s (DCTC) shares of the Detroit-Windsor Tunnel for $53.5 million. MIG now maintains and operates the tunnel and collects toll revenue.
CA - On May 22, 2003, California Transportation Ventures finalized its financial agreement with the state of California to build and operate a four-lane, 9.5-mile toll road expansion of Route 125 south of San Diego, set to open next year. The company, which is owned by MIG, entered into a 35-year lease agreement for the nearly $800-million project.
AL - On December 30, 2005, MIG purchased the four-lane Foley Beach Expressway bridge from the Baldwin County Bridge Co. LLC for $95 million.
VA - In March 2005, MIG announced its takeover of the 14-mile Dulles Greenway for $617.5 million. On June 29, Transurban entered into a $519 million, 99-year agreement to lease the 8.8-mile Pocahontas Parkway.
IL - In 2005, Chicago agreed to lease the 7.8-mile Chicago Skyway to MIG-Cintra for $1.8 billion. Goldman Sachs advised the city on the 99-year lease agreement.
TX - On June 29, 2006, Cintra-Zachry signed a $1.3 billion, 50-year lease agreement to build 40 miles of toll roads from Austin to Seguin. The company will collect most of the tolls during the time of the lease.
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