Studies: Throttle Back on Highway Privatization
By Michelle Krebs April 13, 2009By Bill Visnic
Two new studies released by pubic-interest organizations are putting up the orange cones on the growing trend toward privatization of public roadways.
The Pittsburgh Post-Gazette reports this week that the wide-ranging U.S. Public Interest Research Group warns of "big potential downsides for the public" in road privatization schemes.
The Post-Gazette also quoted the PIRG-developed "Private Roads, Public Costs" report as saying, "Road privatization offers a hard-to-resist 'quick fix' for state budget and transportation challenges. But there are hidden costs to privatization."
Joining with a skeptical viewpoint of highway privatization the new "Driven By Dollars" report from the Pew Center on the States. The Pew document concludes that if states want to continue seeking the scores of road-privatization projects currently proposed, "more questions need to be asked -- and answered."
The PIRG report says there currently are about 15 privatized highways or highway sections in the U.S. -- but another 79 now are under way or being studied. The report says the long-term deals are highly suspect -- and likely to be losing propositions for both states and citizens.
Some of the largest current road-privatization arrangements include the Chicago Skyway, a 7.8-mile toll road with a $1.83-billion cost that was leased for 99 years, and the Indiana Toll Road, which spans 157 miles and can be tolled for 75 years. Both are owned by Spanish-Australian constortium Macquarie/Cintra.
And coming soon is a new toll road for the Capital Beltway in Virginia, a $2-billion plan to construct four high-occupancy toll lanes over a 14-mile span. The private consortium consortium constructing the road can toll vehicles with fewer than three occupants with variable tolls with no limits -- for a span of 75 years.
The PIRG study says, however, that the long-term leases are not in the best interests of the state or the public. It estimates the Indiana Toll Road deal -- which brought $3.8 billion in exchange for the right to toll for 75 years -- shortchanged the state by nearly $7.5 billion.
The rash of road-privatization schemes is attributed to the inability of federal and state fuel taxes to keep up with the cost of building and maintaining roads. More fuel-efficient vehicles also are beginning to make a marked dent in fuel-tax revenue, as is a trend to reduced driving.
The federal government imposes certain restrictions on tolling existing highways built with federal funds. But the National Governors Association is pressuring for elimination of all such restrictions, the Post-Gazette reported.
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