Another day, another boondoggle
by Tom Sullivan
Stick a fork in it. Another of those public-private partnership deals is done. Investors are ready to bail:
Barely 10 years after paying the city $1.83 billion for the right to run the Chicago Skyway for 99 years, a Spanish-Australian group of investors has put the historic tollroad concession deal up for sale.
The Skyway concession company’s executives have informed Mayor Rahm Emanuel’s administration they’re trying to sell their interest in running and collecting tolls from the 7.8-mile-long road on Chicago’s South Side, city officials said Monday.
And right on schedule, too. I described how these go down in December:
US and state taxpayers are left paying off billions in debt to bondholders who have received amazing returns on their money, as much as 13 per cent, as virtually all – if not all – of these private P3 toll operators go bankrupt within 15 years of what is usually a five-plus decade contract.
A “staggering” number go bankrupt, Salzman continues.
Of course, no executive comes forward and says, “We’re planning to go bankrupt,” but an analysis of the data is shocking. There do not appear to be any American private toll firms still in operation under the same management 15 years after construction closed. The original toll firms seem consistently to have gone bankrupt or “zeroed their assets” and walked away, leaving taxpayers a highway now needing repair and having to pay off the bonds and absorb the loans and the depreciation.
Now, those are the P3 construction deals. The Skyway already existed. There is no indication of the Skyway partners’ financial condition (or the roadway’s physical condition). Let’s just say that after Spanish-Australian consortium Cintra-Macquarie declared bankruptcy last fall on its 75-year concession to operate the Indiana Toll Road after only eight, they may be dumping the Skyway before it comes to that.
Meanwhile, Cintra has signed contracts on its project to widen I-77 north of Charlotte with high-occupancy toll lanes (HOT lanes). Called Thom’s Tholl Road by critics, the project was championed by now U.S. Senator Thom Tillis over objections from local businesses and his own party’s rank and file.
Local business leaders and politicians chartered a bus to Raleigh on Tuesday to lobby legislators to de-fund the project. State Sen. Jeff Tarte, a Cornelius Republican, has introduced legislation to do just that:
Mecklenburg County Commissioner Jim Puckett was shocked to hear of the contract signing.
“It’s the most arrogant and insulting piece of governance I’ve seen in my 18 years in politics,” Puckett said.
“The fact that five boards, all five boards that are affected by this, asked for a delay and it was not only delayed, but sped up. I think people fear the fact that the government is not listening to them,” Puckett said.
In Raleigh on Tuesday Puckett called the contract “a disaster” and said the state should get out of it as soon as possible.
Not only was the deal sped up, but somebody is erecting roadblocks to slowing it down:
The group waging a legal battle over the $650 million plan to add toll lanes on Interstate 77 claims an N.C. Senate proposal would “scare off” lawyers from representing citizens groups that oppose state road projects.
The provision, included in a bill outlining changes to statewide environmental regulations, would take away judges’ discretion in awarding attorney’s fees in lawsuits that challenge the state’s “transportation improvements.” Instead, law firms would be made to pay the state’s legal fees if they lose a civil suit.
Kurt Naas of Cornelius believes the legislation is aimed at his group’s lawsuit:
“This is a direct aim at the WidenI77.org legal case and a gross abuse of legislative power by those elected to represent the public’s interests,” Naas said in a news release. “This proposed legislation is an intimidation tactic to hinder citizens from their right to due process of the law.”
Your name doesn’t have to be Rorschach to see patterns here.