U.S. roads, with foreign owners
By ASSOCIATED PRESS
Published July 16, 2006
WASHINGTON - 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.
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 Dwight Eisenhower pushed to create the interstate highway system for a different reason: 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 8-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 said, because the proceeds will pay for urgent projects such as road and bridge improvements.
About half the states now let companies build and operate roads. Many changed their laws recently to do so.
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.
[Last modified July 16, 2006, 01:57:39]
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