Many states, pressed for money and realizing there’s no way they can afford to address the huge backlog of infrastructure maintenance and have realized there’s a “goldmine” in their “non-core” assets and have begun to privatize them. Not only can they get rid of the problems of maintenance but they get much needed revenues. Parking garages, state lotteries, and public housing, are recent examples. Of interest to this SIG, however, should be the privatization of roads, tunnels, and bridges (RTBs).
I may have missed this because I’ve been following this in the financial and Wall Street press (hedge funds and investors are eager to buy RTBs because they are a potential sources of reliable revenues and the sales generate commissions for investment banks) but it seems that the railroads have been remarkably silent about privatizing RTB infrastructure. It seems to me that if large scale RTB occurs, it could be a game-changer as far as the railroads are concerned. Trucks would have to pay market rates to use RTBs. From what I’ve read, the trucking industry, not surprisingly, has been vehemently opposed to the states selling off RTBs. Anyone hear anything about the stance of the railroads on this issue?
Unless it is “misery loves company”, I suspect that the railroads will stay on the sidelines on for this one.
Twenty or thirty years after becoming the owner of a key bridge, tunnel or highway, the owner, after years of having to defer maintenance due to the state regulation of the tolls, seeks a “public/private partnership” to to rebuild and add lanes to relieve the “totally unanticipated” traffic jams that resulted from traffic being 3 times the level of traffic at the time of purchase.
Free Lunch Advocacy Groups (FLAG), change their focus from fighting toll increases applied by the monopolistic infrastructure owners’ cartel to arguing that taxpayers’ money should not be spent to line the pockets of private companies.
Meanwhile, consumers everywhere pay more for the freight costs imbeded in goods and services as freight rates skyrocket to cover wasted time and fuel as vehicles drag along at average speeds of 10MPH getting down the road.
The Good News! For a few years, states were able to balance their budgets without a tax increase.
Really?! Because I could just see Matt Rose [}:)] and BNSF operating a toll road using the same business model they apply to their railroad - Charge U.S. residents triple tolls, then use that subsequent revenue to cross subsidize the token tolls charged to foreign tourists and illegal immigrants!
The downside to permitting investment by outsiders is generally a resulting battle for control at some level. Most railroads have no interest in allowing critical infrastructure to be controlled by other
The latest issue of privatizing various infrastructure is generally being applied to existing toll roads and toll bridges. One factor that keeps the state government at arm’s length is that most toll roads and bridges are owned and operated by a separate authority that was created by the state legislature to build and operate the toll road or toll bridge. This alllowed the road to be built and maintained on the authority’s own budget without the tolls going into the general fund or having to go to the state legislature for operation and maintenance appropriations.
Two examples with which I am familiar are the lease of the Chicago Skyway Toll Bridge (which was a hopeless money-loser) by the City of Chicago and a similar lease of the Indiana Toll Road by the State of Indiana.