P3s come at a high cost

Link to article here.

When will governments figure out that they’ll never come out on top on a P3 deal? Never. These special interests have armies of lawyers to write these contracts in a way where taxpayers will always be on the hook for the losses and will guarantee the profits of these corporations. This example in Ontario is just another in a Texas-sized stack of examples of P3s that fleece the public.

Public-private partnerships come with a high cost
North Bay Regional Health Centre
By Rebecca Zanussi
December 26, 2014
North Bay Nipissing News

ALMAGUIN – An initiative meant to save the province money is actually costing more — $8 billion more to be precise.

Auditor General Bonnie Lysyk released her annual report on Tuesday, Dec. 9, reviewing a number of initiatives led by the Ontario government. One of the areas she examined in detail was private-public-partnerships, known as P3s or Alternative Funding Procurements (AFPs).

“For 74 projects that were either completed or under way under Infrastructure Ontario, tangible costs, such as construction, finance and professional services, were estimated to be nearly $8 billion higher under the AFP approach than they were estimated to have been if the projects had been delivered by the public sector,” Lysyk said following the release of the report.

“About $6.5 billion of this is due to higher private-sector financing costs.”

The North Bay Regional Health Centre was one of the first AFP projects built in Ontario. And Dave Smits, vice president of corporate and support services for the health centre, believes that the process was worth the investment.

“In a traditional method of funding, you would bid the work for the new hospital project, pick a general contractor, and after the new building was built undergo a typical warranty period of about a year,” Smits says.

“But after that the contractor’s work is essentially done and you’re responsible for the maintenance of the building for the rest of its life cycle.”

That could give way to complications, Smits says, because while the costs for constructing the building were approved, maintenance issues had to be dealt with as they arose, and sometimes the funding wasn’t there.
But in an AFP hospital the onus of maintenance — and the estimated cost over the hospital’s mortgage — is on the contractor.

“With AFP hospitals, the government realized the traditional approach to funding ongoing maintenance hadn’t been particularly successful,” Smits says.

“Over the life, the buildings were falling into a state of disrepair. Certain systems were maybe not maintained or kept in line.”

And that’s where AFPs come in. The contractor bids a capital cost for building the new project, but also includes the maintenance costs. And if any of it isn’t maintained — whether it’s walls needing a new coat of paint, or equipment being out of commission — the contractor could face a financial penalty written into the contract.
However, Lysyk said in her report that a typical AFP project almost always costs significantly more than if governments just put up the money themselves and hired contractors to build the same infrastructure, under conventional contracts.

But Smits says it’s not quite that simple.

“What we’ve seen in the past, often from a life cycle perspective, is that the cheapest isn’t necessarily the best,” he says.

Smits provided his personal opinion that before using the AFP model, a hospital would have to consult on a design, submit it to the ministry for approval, and likely be told to cut down the cost. That meant either shrinking the space, or compromising on value of equipment upfront. The practical example Smits gave for this is choosing a vinyl flooring over tile because the vinyl would cost less, even though the tile would last longer. In the long run the cost of maintaining and replacing would actually be more, but that wasn’t the ministry’s focus: the upfront costs were deemed the priority.

“The difference with AFP is the contractor has been given that responsibility to come up with the best accommodation of finishes, quality of equipment, etc. that they as experts have to figure out how to balance the upfront costs and maintenance,” Smits says.

“So, it makes them think really hard about, ‘Am I going to just cheap out on all the finishes because I’m going to have to replace them,’ versus, ‘No, I’m going to go with better finishes that will last longer.’”

P3s began appearing on the provincial landscape in 2001, when the then-Minister of Finance announced that public-private partnerships would have to be seriously considered before the Ontario government would commit any funding for new hospitals that were needed at that time.
In November of 2001, the government approved the development of two new hospitals (in Brampton and Ottawa) using the P3 approach.

According to Lysyk’s report, as of March 31 there were almost $23.5 billion in liabilities and commitments that current and future governments will have to pay for AFP projects. The province has also borrowed money to pay AFP contractors when projects were substantially completed. The Auditor General estimates these borrowed amounts to be an additional $5 billion, included as part of the total public debt recorded in the Public Accounts.

Lysyk also found that two of the risks Infrastructure Ontario used in its assessments for P3s should not have been included. Without them, public-sector delivery for 18 of the 24 projects would have been assessed as $350 million cheaper than delivery under AFP.

Infrastructure Ontario estimated that this $8-billion difference was more than offset by the risk of potential cost overruns if the construction and, in some cases, maintenance of these 74 facilities was done by the public sector.
 Smits says while there are some complications that arise with AFPs, such as different sets of complexities, he has found the model much less stressful than the previous method.

“At the end of the day I’m getting funded to keep this building in what I consider a very good state of repair,” he says.

“And I’ve been guaranteed that funding in my contract. It gives me a certain comfort I couldn’t have had in old delivery model. In past, you weren’t sure where the money was going to come from to keep your building up to date and looking good and functioning well.

Chinese to fund road project in exchange for residency

Link to article here.

This is a seriously risky proposition. All foreign investors are not created equal. Giving residents of a hostile Communist country like China permanent residency in the U.S. in exchange for money is disgusting! Nothing like buying your way into our country. Public private partnerships (P3) are a threat to our sovereignty over our own public infrastructure, but this takes even a P3 to new heights.

Chinese investors to fund I-95 interchange in exchange for U.S. residency
By David Tanner, Land Line senior editor

The Pennsylvania Turnpike Commission not only has gone outside the box, but has gone outside the country to find funding for a new interchange with I-95. Turnpike officials are capitalizing on a law that allows Chinese investors to fund half of the project cost in exchange for permanent-residency visas from the U.S. government.

The EB-5 Immigrant Investor Pilot Program was enacted by Congress in 1990 and is overseen by the U.S. Customs and Immigration Service. It allows foreign investors to chip in at least $500,000 for U.S. projects of regional significance in exchange for residency.

In 2012, the Turnpike Commission paid $50,000 to study whether EB-5 financing would be a viable option.

The commission signed an agreement with the Delaware Valley Regional Center to attract up to $250 million in EB-5 financing. The DVRC successfully applied to the U.S. Customs and Immigration Service to be designated as an EB-5 regional center – one of the stipulations for attracting foreign investment.

The mainline Pennsylvania Turnpike is designated as I-276 in Bristol County. Interstate 95 currently passes over the turnpike in Northeast Philadelphia with no interchange. Officials have been planning an interchange there for years.

The first $150 million to jumpstart the project came from the Federal Highway Administration and the Turnpike Commission. It is being used to widen four miles of the Turnpike in Bristol County and to lay groundwork for three new bridges and piers for future ramps. According to officials, that will take about four years.

Future phases will reconfigure traffic patterns and connect the Pennsylvania Turnpike with the New Jersey Turnpike.

A turnpike official previously told Land Line that the entire project would cost about $1.4 billion. Tolls and other sources will complete the financing.

Tax relief, road funding priorities in coming session

Link to article here.

It’s reports like this one that we’ll use to hold state leaders accountable for how they spend our hard-earned tax money this next budget cycle. They promise more money for roads, but TxDOT’s perpetual excuse to levy toll taxes on every highway will continue to be ‘it’s still not enough’ unless we demand NONE of this new money or existing tax revenues can be used to build toll roads. If they’re going to build a toll road, it should pay for itself with just the toll users alone - no tax money!

Tax relief figures high on legislative budget priorities
By Peggy Fikac
December 6, 2014
Houston Chronicle

AUSTIN — Texans can expect tax relief, a focus on border security and more efforts to fight traffic congestion when a cash-flush Legislature convenes in January.

The budget priorities line up with campaign promises from Republican state leaders and lawmakers, who handily won their spots with a message of keeping state government lean while carefully weighing additional spending for its benefits.

Special Section on Prop 1 - Fallout as oil bust means less money for roads

Prop 1 special section

Link to article here.

Doubts about Prop 1 loom in light of oil bust
By Terri Hall
January 4, 2015

When Texas lawmakers punted on road funding with passage of Proposition One last year, they never anticipated the Texas oil boom would abruptly crater. It took three special sessions to round up the two-thirds majority needed to place a Constitutional amendment on the ballot for Texas voters to decide if they wanted to raid half of the state’s oil and gas severance tax (a tax on new oil wells) and divert those revenues to the State Highway Fund. With the promise that the new funds could not be used to build or support toll roads, Texas voters gave the green light. But the euphoria lawmakers felt after getting away with gaining new highway funds without ending diversions of the gasoline tax has quickly turned to doubt as the plummeting price of gasoline has severely tempered oil production in the Lone Star State.

Big govt snoop: Toll tags in three states now interoperable

Link to article here.

It’s only a matter of time before big government colludes to bring us a national toll tag system that tracks citizens everywhere we go and can conveniently charge us for every mile we drive. The fact that this reporter nor the people interviewed in the story see this as a threat to privacy and our pocketbooks is downright scary. There’s a whole lot more to this than convenience….

Improved system makes cross-county and cross-country travel easier
Florida Weekly
December 24, 2014

The word interoperability is tough to spell and pronounce and isn’t one used in everyday communication.

Unless, that is, one works in a bridge or highway tollbooth.

Yet, interoperability might affect anybody who drives a car or truck over bridges or toll roads anywhere in Florida and a couple of nearby states. Eventually, perhaps in every state.

Navasota residents leery of proposed toll road

Link to article here.

Navasota residents waiting to see proposed toll road route
The Eagle.com
Wednesday, December 24, 2014

Plans for a Texas 249 toll road connecting Houston to Waco by way of Grimes County have left some landowners in limbo as transportation officials decide where to build the roadway.

"We're living on the edge of the unknown," said David Tullos, a coordinator for the Grimes Citizen Advisory Group, a grassroots coalition opposing the construction of the toll road, which would start out as a two-way road with a passing lane and eventually grow to a four-lane divided highway.

"It has created a degree of uncertainty," Tullos added. "If somebody wanted to sell property, they couldn't because the person buying would be buying into the unknown with the fact that a toll road could go through the property."

Toll roads going belly-up

Link to article here.

When good toll roads go bad
By Keith Benman
December 27, 2014

Northern Indiana is not the first region in the nation to be subject to fallout from a toll road bankruptcy, with a number of other privatized roads and bridges going belly up across the nation in the past few years.

The good news is those roads have continued to carry traffic with little disruption. The bad news is there is usually little communities can do to influence the bankruptcy process, except in cases where roads revert to government ownership.

Double digit tolls to fund I-70 in Missouri

Link to article here.

OUTRAGE: As punishment for voters rejecting a sales tax hike to pay for state highways, Missouri politicians seek to impose $20-$30 in tolls per trip to use I-70.

Report: Double-digit tolls could fund I-70 repairs
Associated Press
Wednesday, December 31, 2014

JEFFERSON CITY, Mo. (AP) - Motorists on Interstate 70 would need to pay $20 to $30 in tolls to travel one way across Missouri to pay for the minimum in needed repairs on the roadway, according to a state Department of Transportation report released Wednesday.

Possible solutions suggested in the report, commissioned in early December by Gov. Jay Nixon, include using tolls to repay public bonds or to recoup expenses in a public-private partnership.

Trinity toll road to benefit handful of developers

Link to article here.

Content warning: The reporter does use an expletive in this article.

The Trinity Toll Road Is a Real Estate Play to Boost One Corner of Downtown Dallas. Period.
By Jim Schutze
Mon., Dec. 29 2014
Dallas Observer

My big hope for this coming year would be that 2015 will be The Year of Talking Honestly. The bitterness and recrimination hanging in malevolent clouds over the 16-year-old Trinity toll road debate really have very little to do with the nature of the project itself. It's about roads, parks and drainage. How malevolent can you get about drainage?

The anger and angst have to do with two things: 1) The perception that people are lying about the project, and 2) The fact that people are lying about the project. Every six months new and fantastic justifications for it are invented. Now it's a bloody civil rights project, for God's sake.

And after years of telling us that it's all a done deal, totally designed, approved and paid for, the mayor now is telling us to withhold judgment because the project hasn't been designed yet. Then he tells us it will provide major traffic relief for downtown. Then he tells us it will be a modest country lane that will carry hardly any traffic at all.

If the mayor and his friends would only try to tell us the truth about it, they might actually find they have some real selling points to work with. In recent months, I have come to believe that I do know what the Trinity toll road is all about. I disagree with the purpose. But I am aware many others will find it worthwhile.

The real purpose of the Trinity toll road, as I have become convinced over the last two months, is to serve and spur the redevelopment of the southwestern corner of downtown Dallas. The favored plan calls for access to and from the toll road at Corinth Street, which would feed traffic into the southwest corner, probably along Lamar Street.

What's so special about the southwest corner of downtown? The southwest corner of the Dallas central business district is the most active and least talked about venue in downtown, which may be only fitting. It is the bastion of some of the city's most powerful families -- the sort of people who never complain, never explain.

It was that way 37 years ago when Dallas City Manager George Schrader informed the city council he had been negotiating for more than a year with Woodbine, the real estate arm of Ray Hunt, heir to fortune of legendary Texas wildcatter H.L. Hunt. Oh, and, in addition to just talking, Schrader told the council, he had been swapping city-owned land for some of Hunt's property in the southwest corner near historic Union Station.

Oh, and, in addition, Schrader said, he had agreed to build a new sports arena on some of the land he had swapped from Hunt, right next to the gleaming new glass-walled hotel Hunt was building in the southwest corner. Oh, and the city would be floating bonds, of course, to finance the construction. Oh, but these would be the type of bonds that don't require voter approval, so there would be no need to bother the voters at all about any of this, because it was all already a done deal.

In the Dallas City Hall of that era, a city council that was staring a done deal in the eye, especially a done deal with Ray Hunt's name on it, had but one choice. As a body the council nodded and said unanimously to Schrader, "Yes, sir." And it was done.

The Reunion Arena deal was done entirely according to the same mechanism that has continued to serve the southwest corner of downtown ever since -- the lips of the city's business Brahmins to the always obsequious ears of successive city managers. Hunt has been joined often by the owners of The Dallas Morning News in an uphill battle to improve the southwest corner, always by seeking what Woodbine and the News proudly call "public/private partnerships." In my own view, those would be deals where private parties use government money to kite their own profits, but that is how I would see it, isn't it?

Mainly the Hunt/Decherd/Dealey/Moroney forces have sought to improve their little corner of the world by pushing for an ever-expanding city-owned convention center and for a city-owned convention hotel, by lobbying to bend the light rail system far from its natural course to take in their corner and by pushing for other even more speculative adventures.

But in spite of their heroic efforts on its behalf, the southwest corner never seems to quite take root. The commercial excitement downtown always seems to yearn northward toward Uptown on the other side of the Woodall Rodgers Expressway, while the residential buzz seems to want to move East toward, of all places, Deep Ellum and Baylor Hospital. It's pretty bad when you've invested all that political clout but you lose out anyway to a scaggy joint like Deep Ellum.

But they don't give up, and why would they? The one advantage the Brahmins in the southwest corner can bring to their own cause again and again is their absolute dominion over the city manager system, a control born of the newspaper's raw political power and of Hunt/Woodbine's longstanding and assiduous cultivation. That's why, for every ounce of sheer market force pulling the city away from them, the southwest corner Brahmins have been able to martial 10 pounds of government leverage to tug the action back to themselves. In the process they have created the closest thing in Dallas to a socialized realm.

Right now the pressure is greater than ever to use government money to force the market their way. Vigorous efforts are underway to pull the second downtown light rail alignment to the convention hotel in their part of town, even though that route has been deemed by studies to be the least effective and most expensive of all the possible alignments through downtown that have been analyzed -- so expensive DART won't do it without a direct subsidy from the city.

Perhaps the most illuminative quote I've seen on that issue came four years ago from then DART board chairman William Velasco. Velasco said of the detour-to-the-southwest-corner route for DART downtown, "It didn't make any sense to me at first, but now it makes all the sense in the world."

Yes, that would be after the chit-chat. No sense before. All the sense after.

An effort is underway to pull high-speed rail into the southwest corner of downtown, even though the Japanese Shinkansen bullet trains proposed for the Houston-Dallas line can reach a quarter mile in length, roughly from City Hall across downtown to Main Street, so that a depot capable of handling multiple trains would be immense. That must be why the proponents of the line are holding out for a station in southern Dallas instead.

Union Station, a creaky old thing, already is home to two DART light rail lines and the TRE commuter train to Fort Worth, as well as serving as the city's only Amtrak depot. In the not too distant future it will gain another occupant in the trolley line to Oak Cliff.

And now I'm starting to hear earnest talk again about putting a major entertainment venue in the southwest corner. This time it's a baseball stadium. Just a couple years ago former mayor Laura Miller was going around town offering to lobby for a casino on the site of the torn-down Reunion Arena, saying it would be "a great shot in the arm for our city."

But where in the world could any of this stuff be put? So much of the privately held land in that corner of town is held by A. H. Belo, the company that still owns The Dallas Morning News and used to own WFAA. But maybe that could change. In a story that fell in the pond with amazingly few ripples, the News' own intrepid Brandon Formby came across city documents two months ago identifying the newspaper and television station sites as "potential redevelopment blocks."

He quoted a mid-level Belo executive who has since left the company as saying, "There's a lot of ideas you could come up with for this site." But the executive assured Formby nothing definite was on the drawing boards.

Sure. But if you were holding a major investment in a regional daily newspaper today, would you be interested in a scheme that might allow you to rescue some of your money by selling the dirt beneath the paper at a really good price? Just saying.

I believe the real purpose of the toll road is to provide a discrete point of ingress and egress for the bustling recreation, convention and transportation center in the southwest corner of downtown that major land owners there have dreamed of for decades. And while I may be snide and negative about it, I am fully aware that the concept would resonate like hell with lots of people in this city. I think thousands of people out there would say, "Damn, man, why didn't you just tell us this is what that toll road is for?"

Of course, it has never been the way of the Brahmins in the southwest corner to speak publicly about their plans. Since the Reunion Arena deal over a third of a century ago, they have trusted in the art of whispers behind closed doors. But times have changed. Maybe the city has gotten smarter. It would be hard not to get smarter than the city council that okayed the original Reunion Arena deal.

The better bet now, even for lucky Brahmins, is to show some clean cards. They might even surprise themselves and win an honest game. I don't think the other option is healthy for anybody right now. That's what people are really tired of. It's not even the road. It's the insulting bullshit.

Falling oil prices could deepen road funding woes

Link to article here.

Falling oil prices could deepen Texas' road funding woes
Transportation Writer
Dallas Morning News
December 28, 2014

Drivers cheer falling gas prices, but the plummeting value of oil could undermine voters’ attempts to pay for more road construction and maintenance.

Texans overwhelmingly agreed in November to partially fill the state transportation agency’s $5 billion annual shortfall with excess oil and gas production taxes. The approval of Proposition 1 was expected to give the Texas Department of Transportation about $1.7 billion a year.

2014: Year of public backlash to tolls

Link to article here.

Maybe the political class and special interests are excited about rail since road funding has been lackluster for the last few years and they’ll latch onto any black hole needing taxpayer subsides and guarantees anytime they can get it. However, North Texas residents are angry at the prospect of more of their road funding being diverted to rail projects while being asked to pay double digit daily toll bills all over the Metroplex.

2014 in transportation: Toll projects garnered furor while rail projects drew excitement
Transportation Writer
Dallas Morning News
December 28, 2014

North Texas this year moved closer to becoming home to the nation’s largest network of managed toll lanes, as the second phase of LBJ Freeway’s massive renovation opened.

The region’s proliferation of toll lanes and roads expanded into Tarrant County with the opening of three projects — the DFW Connector, the North Tarrant Express and the Chisholm Trail Parkway. And in Dallas, the long-planned Trinity Parkway toll road once again emerged as one of the city’s most contentious topics.

Ginned up traffic forecasts for Northeast Gateway

Link to article here.

Dallas Transport Agency Cooks Up Fishy Traffic Projections for a New Road
by Angie Schmitt
DC Streets Blog
Thursday, October 16, 2014

We’ve reported on the way state agencies justify spending on expensive road expansions by overestimating the traffic that will materialize in the future. In an encouraging sign, one local press outfit is calling out the fishy traffic projections before a project gets built.

The regional transportation agency for Dallas justifies this highway project with traffic projections that far exceed even the estimates from the notorious sprawl enablers at Texas DOT.

Brandon Formby of the Dallas Morning News‘ Transportation Blog (yes, it’s a long-time member of the Streetsblog Network) has been taking a critical look at traffic projections from the North Central Texas Council of Governments, the Big D’s regional planning agency. Residents who oppose the 28-mile Northeast Gateway-Blackland Prairie toll road – planned for a rural area between Garland and Greenville — question the assumptions behind the project.

The numbers certainly do look suspicious.

Here are some excerpts from Formby’s reporting (emphasis added):

    •    “Some of the council of governments predictions are hundreds of percentage points higher than the Texas Department of Transportation’s forecasts.”
    •    “NCTCOG predicts that 72,300 drivers will use State Highway 66 at County Road 6 in Lavon in 2035. That’s six times as many as the 12,000 drivers the agency says used it last year. It’s also more than triple the 22,880 drivers TxDOT estimates for the same spot in 2030, the closest year to the NCTCOG estimates for which the state has forecasts.”
    •    “While the regional agency’s traffic estimates for spots in the corridor predict anywhere from a 70 percent to 503 percent increase in drivers, the state predicts population increases in the four counties to be between 23.3 percent and 65.1 percent.”
Formby reports that NCTCOG has been reluctant to divulge how its traffic projections were developed. No wonder, because they seem to be practicing highway voodoo.

Availability payment P3s eschewed by Indiana politicos

Link to article here.

TURF worked hard to defeat the availability payment model of P3s in Texas during the 2013 legislative session. We were successful, but we must remain vigilant since special interests will be working 24/7 to find ways to make taxpayers pay for their potential losses.

Financing strategy for roads hits bump
November 22, 2014
Kathleen McLaughlin

A standard-bearer of public-private partnerships since former Gov. Mitch Daniels’ toll road lease, Indiana might be turning away from at least one form of the P3s.

Indiana Department of Transportation Commissioner Karl Browning doesn’t think the state should commit to any more so-called availability payments, which financed Indiana’s share of the Ohio River Bridges project and section five of Interstate 69.

“It’s a lot like borrowing,” Browning said in a recent conference call with the Indiana Chamber of Commerce. “I would be more than cautious about the notion of doing public-private partnerships of the nature of some of them that we’ve done.”

Browning’s remarks might come as a surprise, considering the way Daniels, his former boss, embraced P3s. Appointed to his second stint as INDOT chief by Gov. Mike Pence, Browning is concerned about debt payments consuming too much of a limited budget, which is needed to tackle a mountain of road and bridge work.

The term “availability payment” is P3 industry lingo for annual payments that come from available budgeted revenue sources. A developer can use a government’s long-term commitment of annual payments to finance a project.

Availability payments are gaining popularity as governments look to finance projects that can’t be tied to a dedicated funding stream, such as tolls. The city of Indianapolis plans to use availability payments to finance a criminal justice complex that could cost as much as $600 million.

While Indiana isn’t carrying the debt from the Ohio River Bridges project or I-69 on its books, the P3 deals still mean INDOT has to set aside money for 35 years.

Debt burden grows

The share of revenue INDOT spends on debt obligations is set to grow. Currently, about 10 percent of its $1.6 billion in state and federal revenue goes to debt service. That will rise to 17 percent in 2018, according to INDOT projections through 2030.

“In my view, that’s a manageable number,” Browning told the chamber. “If we let it get higher, we’re going to be mortgaging our grandchildren.”

A critic of Daniels’ toll-road lease and the I-69 project, Rep. Matt Pierce, D-Bloomington, said he’s pleased to hear a member of the Republican administration talk about P3s in frank terms.

“Where have you been all these months?” he asked.

Browning isn’t eschewing P3s in general. He said he would support a deal for new construction if it can be sustained by a known revenue source.

“Tolling comes to mind,” he said.

Tolls were not an option for Section five of I-69, in which State Road 37 from Bloomington to Martinsville will be upgraded to freeway standards. So in 2013, the Legislature approved language in the budget bill allowing the Indiana Finance Authority to pursue an availability-payment scheme.

Once the road is operational, Indiana will pay $21.8 million a year for 35 years.

Indiana’s first availability-payment P3 was the East End Crossing, a toll bridge under construction over the Ohio River at Utica. Availability payments are $33 million a year from 2016 through 2050.

Toll revenue will offset the availability payments, but Indiana does not expect it to cover the bridge’s $763 million cost.

With Browning resisting more of those deals, it’s unclear how Indiana will pay for the final leg of I-69 from Martinsville to Indianapolis, which is a priority for Gov. Mike Pence.

“It is not feasible to toll only the remaining I-69 Section 6, and INDOT has no plans to pursue this tolling approval with the Legislature,” Jim Stark, deputy commissioner for innovative project delivery, said in an emailed statement. 

“Right now, no funding has been identified for final design or construction of I-69 Section 6.”

Nevertheless, INDOT is pursuing a Tier 2 environmental study, which includes examining different road paths and developing a preliminary cost estimate. The study is expected to take two to three years, Stark said.

Future revenue 

The lease of the Indiana Toll Road generated $2.6 billion for Daniels’ 10-year transportation plan, Major Moves.

Now, Browning hopes to rally taxpayer support for a lasting solution to the transportation funding gap caused by declining gas-tax revenue, aging infrastructure and escalating construction costs.

The average Hoosier spends less than $20 a month on the state highway system through BMV fees, sales tax, and state and federal gas taxes, according to a presentation Browning made to the Joint Transportation Committee this summer.

Meanwhile, roads and bridges built 50 years ago are approaching the end of their useful lives. INDOT spends an average $273 million a year on bridge preservation, but 12.5 percent of bridges will be in poor condition by 2024, Browning told the chamber audience.

Likewise, the state is spending $400 million a year on roads, but 11.5 percent of highways will be in poor condition by 2024, he said.

Browning does not think the federal government will come up with the answer.

“If we’re going to be the crossroads of America,” he said, “our existing highways have to be in pretty dang good shape. We have to persuade 6 million people that it’s worth it to them, and not rely on the federal government.”

Pierce said the billions Daniels generated with the toll-road lease masked the transportation funding problem.

“Most of the legislators haven’t focused in on the issue of funding and how that impacts their own districts,” he said.

Indiana Chamber transportation lobbyist Cam Carter predicted the Legislature won’t consider any tax increases or new revenue sources until INDOT reveals a consultant’s study, due out in August.

There is no P3 deal that will make up for the fact that the federal gas tax hasn’t risen since 1993, cars are becoming more fuel-efficient, and Americans are driving less.

“What you have to understand with public-private partnerships in the transportation realm—they’re a financing mechanism,” Carter said. “They’re not a funding mechanism.”

North Carolina reporter travels to Dallas to check-out Cintra's tollway

Link to article here.

These two dueling news reports from North Carolina TV stories show the power of the press: one series reads like a puff piece written by Cintra, the other highly critical of Cintra - leasing viewers to draw totally different conclusions. This is why TURF exists - to help you sort the facts from fiction and to protect the interests of we the people - the taxpayers!

NOTE: Cintra canceled its interview with the reporter once they knew TURF was going to be interviewed.

9 Investigates: The real cost of toll lanes
To get answers, Channel 9 traveled to Dallas, Texas where Cintra is building a similar toll road.
By Scott Wickersham
November 5, 2014
Channel 9 - North Carolina

CHARLOTTE, N.C. — The North Carolina DOT is close to finalizing a financial contract with a Spanish company to build toll roads on Interstate 77 from Mooresville to uptown Charlotte.

But not much is known about exactly how much it will cost or how construction will affect traffic, and the public has only seen animations of how it will look when it's done.

To get answers, Channel 9 anchor Scott Wickersham traveled to Dallas, Texas where Cintra is building a similar toll road. Channel 9’s investigation found that Texans are paying a hefty price to drive congestion-free -- and one group there says people in Charlotte should be very concerned.

The Dallas metro area is home to 6.5 million people -- and heavy traffic.

CA privatized tollways a bust

Link to article here.

Toll roads can be a bumpy ride
By Jason Hoppin, Monterey County Herald
Posted: 01/03/15

Castroville >> California’s first ventures into the world of privately-funded freeways have been a bumpy ride.

Connecting jobs centers in Orange County to cheaper housing in Riverside County, the 10-mile 91 Express Lanes were built in the middle of an existing public freeway, offering drivers four lanes to bypass — at a price — Southern California’s notorious gridlock.

Operated by California Private Transportation Corp., the road was slow to draw motorists and included a controversial “non-compete” clause, which limited the government’s ability to make roadway improvements elsewhere, sparking lawsuits and motorist outrage. Eventually, Orange County transportation officials bought out the road.

Other proposals never made it off the drawing board after opposition from local government and environmentalists. The bonds used to build another Orange County toll road were once downgraded to junk status. And another toll road near the U.S.-Mexico border went bankrupt in 2010, and is now owned by a regional governing body.

“There are a lot of places in California where they’ve built these roads, and then it didn’t really work so well,” said Martin Wachs, a UCLA-based transportation expert and former head of UC Berkeley’s Institute of Transportation Studies.

But Wachs points out that toll roads have deep roots in U.S. history, dating back to Colonial times when the phrase “turnpike” arose to describe pay roads controlled by a gate. After an era of “freeways,” many planners say going back to toll roads is the future, given the ongoing declines in gas tax revenues needed to meet the nation’s infrastructure needs.

“We’re going to have to face up to new ways of paying for our roads, because the old ways are not producing enough money, and the roads are getting to be in poorer and poorer condition,” Wachs said.

California began experimenting with toll roads in the 1980s, when more fuel-efficient cars were one reason gas-tax dependent transportation funding began to shrink. Public-private toll roads were floated as a way to keep up with demand.

Many of the roads off to rocky starts have turned things around. Travel on the 91 Express Lanes has inched steadily higher, and the excess toll revenues have helped pay for improvements elsewhere.

“Our commitment was to put any excess revenue, beyond paying off the bonds, to improve the free lanes,” said Joel Zlotnik, a spokesman for the Orange County Transportation Agency.

But pay-to-play driving has always drawn charges that it is elitist and encourages sprawl. Wachs pointed out toll roads could help reduce congestion on free roads, but those kinds of concerns, along with environmental opposition, helped kill a once-proposed 40-mile road between Antioch and Sunol in the East Bay.

The proposed Highway 156 toll road between Castroville and Prunedale would route drivers through poor neighborhoods. Castroville earns less and has higher unemployment than the rest of the county, with one in five residents living below the federal poverty line.

While the Transportation Agency for Monterey County hasn’t finalized what the road would cost motorists, pricing on other tolls roads approaches $1 per mile during peak commutes, though most offer a variety of pricing options.
While many toll roads are planned to go free once the bonds are paid off, financial problems at some have pushed that date further into the future. The agency that oversees Orange County’s San Juan Hills toll road, which cuts through wealthy coastal mountains, once saw the road’s bonds downgraded to junk status. They are now being refinanced due to poor ridership and revenue, a move that extends the life of the bonds.

In Illinois and Indiana, truck drivers have seen their tolls hiked in recent years. And poor ridership has plagued a 130-mile Texas toll road between Austin and San Antonio, with that road’s debt recently restructured as well.

Part of the problem is that people are driving less. The amount of miles the average American drives each year has fallen for eight years in a row, a shift partly driven by changing work habits. In Monterey County, for example, the number of people working from home doubled between 2005 and 2010, according to data from the U.S. Census Bureau.

Wachs predicts California will continue exploring toll roads, pointing out they are more popular on the East Coast and in other parts of the world, including Indonesia and China, are one of the main methods of building new roads.
“Private operators are very common throughout the rest of the world,” Wachs said.

But he cautioned that any government agency wanting to build one should hire a good lawyer to craft an airtight deal. The advantage of public-private partnerships, Wachs said, is that it shifts the financial risk onto private operators.

“The critical question when you create these public private partnership is who’s responsible for the risk,” Wachs said.

Colorado highway office says no to P3 on Denver Beltway

Link to article here.

Finally, a government with some fiscal sense!

Colorado Office Recommends Against P3 for Toll Lanes on Denver Beltway
By Editor
November 20, 2014
National Council on Public Private Partnerships

The Colorado Department of Transportation’s (CDOT) High Performance Transportation Enterprise (HPTE) has recommended against financing a $230 million expansion of a portion of the beltway on the south side of the Denver metro area.

Maryland tolls on I-95 will lose money

Link to article here.

New Maryland toll lanes will lose money
by Ben Ross
December 8, 2014
Greater, Greater Washington.org

New toll lanes that opened Saturday on I-95 promise to be a financial debacle for Maryland. In all probability, the tolls won't bring in enough money to pay the extra cost of building toll lanes rather than widening the highway without tolls.

Salzman on Toll Roads to Ruin: The catch to public private partnerships

Link to article here.

Roads to Ruin
Opinion: "We’ve let private companies get away with the claim that efficiency will lead to cheaper and better highways when what it often leads to is massive taxpayer debt."
By Randy Salzman
Style Weekly
November 11, 2014
The company that runs the $3.8 billion Indiana Toll Road went under in September, adding to the list of nearly a dozen transportation-based public-private partnerships in bankruptcy court across the country.

Few of the rest, including Virginia's 22 public-private partnerships, known as P3s, are meeting their toll and income projections. Maryland's InterCounty Connector has quadrupled in cost to $4 billion while carrying less than half of its projected vehicles.

Bias in traffic forecasts lead to failing toll roads

Link to article here.

Optimism Bias and Risk in Public Private Partnerships
The tolling technology is better than ever — but traffic forecasts are a disaster.
by James A. Bacon
Bacon’s Rebellion
November 14, 2014

Randy Salzman, a free-lance Charlottesville writer, has spent the last couple of years trying to understand how Public Private Partnerships (P3s) work in Virginia. If the private sector is supposed to be so much more efficient than government, he asks, how  come so many big P3 transportation projects in Virginia and across the nation have gone bankrupt? Why do private sector companies continue investing in similar projects despite the obvious risk? And what exposure do taxpayers when deals go bad? He doesn’t have any definitive answers, but he lays out a lot of good questions in the latest issue of Style Weekly.

The downside to self-driving cars

Obama’s Science Czar Wants Self-driving Automobile Mandates to Further Agenda 21
Driverless cars will sacrifice freedom in place of vague sustainability. Clear evidence has emerged over the past few years that man does not cause global warming – which is why the environmentalists sneakily changed the phrase to “climate change” – yet these radical policies are still being adopted at great economic cost to taxpayers, both through taxes and rising personal expenses. While driverless cars could prove to be an innovative, cost-effective development for the future, implementing them as a mandate from government will destroy any benefit and serve to curtail our freedoms and further Agenda 21 and its associated UN control.

Read this exclusive for Selous Foundation written by columnist Rachel Alexander here.