Indiana Toll Road
oads 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
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.
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
About half the states
now let companies build and operate roads. Many changed their laws
recently to do so.
Gov. Mitch Daniels
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.
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
Macquarie-Cintra could make $133 billion over the 75-year life of
the Indiana Toll Road lease — for which Indiana got $3.8 billion.