Indiana Gov wants sole authority to enter into PPPs

Link to article here.

To show how far gone Texas is, this is basically already the case in Texas. Once the Legislature authorized these contracts, there were no protections or oversight in place. TxDOT, run by the Governor's appointees, could enter into public private partnerships (called CDAs in Texas) at will, in secret, with NO oversight. In 2007, a moratorium was put in place because of the gross excesses TxDOT engaged in -- signing sweetheart deals for a half century effectively signing away the public's rights to access and use their own public road system unless they can pay 75 cents a mile in tolls, in deals that guarantee free roads remain congested for the life of these contracts using non-compete agreements.

Currently, there are nearly 30 bills to re-authorize these PPP contracts in the Texas Legislature, whether on a limited basis or indefinitely. HB 3789 by Larry Phillips would remove any protections PPPs used to have in place under the moratorium, like having the Attorney General and State Auditor review PPPs prior to them being signed. No elected officials would see the terms of the deal nor ANY member of the public prior to them being signed. Phillips' bill also gives the private corporation control of the surrounding free lanes and the facilities in the public' right of way just like the universally despised Trans Texas Corridor.

Texans beware: your Governor, Rick Perry, wants sole authority, too, and he's already shown what he'll do with that generations of Texans with these government-sanctioned monopolies that conservative Michelle Malkin calls "corporate welfare."

Bill would remove legislature from toll road equation

Lawmakers' approval would not be required

By Heather Gillers
Indiana Star
April 1, 2011

The governor would have the sole authority to create toll roads under a bill that has been quietly advancing through the Indiana legislature.

The measure, which would expire in 2015, is up for a vote in the House Roads and Transportation Committee next week. It passed the Senate 37-12 in February.

"It's that whole thing about striking while the iron is hot," said the bill's sponsor, Sen. Tom Wyss, R-Fort Wayne.

Private companies are "not going to invest a million bucks into a project and then have to wait for the General Assembly to approve it," he said. "They'll go to a state where they can do it (more expediently)."

For a four-year period, the bill would allow the governor and the Indiana Department of Transportation to launch public-private projects, including creating or converting existing highways to toll roads, without the approval of the legislature. Opponents worry it would shut voters out of government deals with private companies.

In public-private road partnerships, companies typically work with government to build or maintain a road in exchange for some benefit, such as toll collection.

The requirement that lawmakers sign off on such projects was a part of Gov. Mitch Daniels' Major Moves package, approved in 2006. The project marked the beginning of the state's use of public-private partnerships to launch major road developments.

The following year, the Commerce Connector project -- Wyss' push to create a second highway loop around Indianapolis' I-465 -- drew public opposition, and Daniels urged Wyss to pull the proposal rather than put it to a vote in the House.

The idea of the governor making private highway deals without consulting other elected officials troubles Rep. Terri Austin, D-Anderson, who held hearings on the 2007 Commerce Connector proposal. If Wyss' measure had been in effect at that time, she pointed out, the governor could have simply ignored public opposition.

"This would basically remove any General Assembly oversight whatsoever," Austin said. "He just gets to say, 'I want to do that. This is how I want to do it.' "

Under Wyss' bill, any proposal for a public-private road project would get a review -- but not a vote -- by the State Budget Agency, which includes the state budget director and one representative from each of the four caucuses: the House and Senate Republicans and
Democrats. Before that, the proposal would undergo feasibility and economic impact studies, and the public could comment on it in a hearing -- all special requirements for public-private partnerships that lawmakers approved last year.

"All this was done so that none of these projects could be developed in secret," INDOT spokesman Will Wingfield said.

About 30 other states do not require lawmakers' approval for a public-private road project, according to the National Conference of State Legislatures. Some of those states, however, do require approval from a transportation board or commission.

The measure allowing public-private partnerships is tucked into a larger transportation bill, Senate Bill 473, and has mostly escaped public attention. It passed the Senate Feb. 22, the first full day of the House Democrats' walkout.

Wyss said he hopes the House amends out the 2015 expiration date, making the exclusion of legislators from the process permanent. The expiration date was inserted to appease lawmakers who are lukewarm to the measure, he said.

It's B-A-C-K...the Trans Texas Corridor rears its ugly head

Link to article here.

It's b-a-a-ck! Trans-Texas Corridor rises from dead

Plans revived to build public-private partnership toll roads

Posted: April 03, 2011
9:46 pm Eastern

© 2011

Editor's Note: The following report is excerpted from Jerome Corsi's Red Alert, the premium online newsletter published by the current No. 1 best-selling author, WND staff writer and senior managing director of the Financial Services Group at Gilford Securities.

Believe it or not, the Trans-Texas Corridor is back, Jerome Corsi's Red Alert reports.

Texas state Rep. Larry Phillips has introduced in the state Legislature H.B. 3789, a bill designed to allow public-private partnerships, better known as PPPs, to develop toll roads throughout Texas.

"The only thing missing is the name 'Trans-Texas Corridor' and the comprehensive development agreement, or CDA, that specifies the private partners involved in building the new generation of Texas toll roads," Corsi wrote.

In all, some 26 bills have been introduced into the Texas Legislature that would sell a wide variety of public infrastructure, including highways, mass transit facilities, hospitals, schools, recreational facilities, public buildings, technology architecture and even parking lots to private corporations in some fashion.

"Texas, like some 40 other states facing budget deficits that could lead to significant cut-backs in public services, has gone the route of 'America for sale' in the enthusiasm to convert freeways into toll roads and government infrastructure into PPP projects that would permit, if not invite, foreign private corporate involvement and ownership," Corsi noted.

But did the Trans-Texas Corridor every really die?

In January 2009, Amadeo Saenz, executive director of the Texas Department of Transportation, or TxDOT, proclaimed to the Dallas News, "Make no mistake: The Trans-Texas Corridor, as we have known it, no longer exists."

Corsi added, "The operative qualifying clause in that proclamation was the phrase 'as we have known it,' given that the Trans-Texas Corridor, or TTC, appears alive and well. Evidence on numerous government and industry alliance websites shows the TTC project is proceeding under the cover of being broken up into two separate projects and rebranded as the I-35 Corridor and the I-69 Corridor."

For more information on plans for a Trans-Texas Corridor, read Jerome Corsi's Red Alert, the premium, online intelligence news source by the WND staff writer, columnist and author of the New York Times No. 1 best-seller, "The Obama Nation."

Red Alert's author, who received a doctorate from Harvard in political science in 1972, is the author of the No. 1 New York Times best-sellers "The Obama Nation" and (with co-author John E. O'Neill) "Unfit for Command." He is also the author of several other books, including "America for Sale," "The Late Great U.S.A." and "Why Israel Can't Wait." In addition to serving as a senior staff reporter for WorldNetDaily, Corsi is a senior managing director in the financial-services group at Gilford Securities.

Disclosure: Gilford Securities, founded in 1979, is a full-service boutique investment firm headquartered in New York City providing an array of financial services to institutional and retail clients, from investment banking and equity research to retirement planning and wealth-management services. The views, opinions, positions or strategies expressed by the author are his alone and do not necessarily reflect Gilford Securities Incorporated's views, opinions, positions or strategies. Gilford Securities Incorporated makes no representations as to accuracy, completeness, currentness, suitability or validity of any information expressed herein and will not be liable for any errors, omissions or delays in this information or any losses, injuries or damages arising from its display or use.


Link to article here.

Remember the Trans-Texas Corridor? It’s baaa-aaack!

By Dave Mundy/ This email address is being protected from spambots. You need JavaScript enabled to view it.
Posted March 31, 2011 - 9:01am
The Gonzales Cannon

Some things in this world are curious. Other things make sense.

Take air fresheners, for example. They’re designed, marketed to and sold primarily to women. That’s not a critique, ladies, it’s just a simple statement of fact: women apparently have a more delicate olfactory sensibility than men, which is why air fresheners smell like “Summer Rain,” “Apple Cinnamon” and “Fresh Linen.”

We guys, we’re a little more down-to-earth. If they made air fresheners for men, you’d get flavors like “Wet Muddy Dog,” “Stale Laundry” or “Dallas Cowboys Locker Room” (or, even better, “Dallas Cowboys Cheerleaders Locker Room”).

That’s one of those observations about the world that’s curious at first, but later makes sense.
But we seem to have a plethora of things that make you go “Duh!” these days.

Remember the Trans-Texas Corridor? To paraphrase Heather O’Rourke: “It’s baaaaa-aaaaack!”

You’ll recall the state dropped the idea of creating a super-highway for ramshackle Mexican trucks to clatter unimpeded from Laredo to the Oklahoma border a couple of years ago, over the outcry of Texas citizens who objected to the fact that it was a highway for Mexican commerce, using land taken involuntarily from Texas landowners, which would be built by a Spanish company and would be paid for by Texas taxpayers.

Texas Department of Transportation officials bore the brunt of citizens’ ire for the project’s leading proponent (Gov. Rick Perry), including some public meetings where soccer moms threatened to impede progress with shotguns.

Never let it be said our state legislators aren’t a determined lot.

After placating fundamentalists with a bill to allow anti-abortion messages on license plates, State Rep. Larry Phillips (R-Sherman) has done what so many other Texas Republicans have done — gone back to business as usual, spending taxpayers’ money like a Democrat.

Phillips has now introduced HB 3789, relating to the development of toll roads through public-private partnerships — the underlying concept of the “abandoned” Trans-Texas Corridor.

HB 3789, along with several others which allow the state to privatize and/or turn existing highways into toll roads, began hearings in Austin this week. All of the bills take the whole concept of government transparency and chunk it out the window, giving the state the authority to charge you extra money for using the highways you paid for already and, conceivably, giving the roads and the land they sit on to foreign corporations. Among the roads targeted to become a tollway: US Highway 183 coming out of Austin.

The Legislature has given us one positive gem this session, of course. The House recently passed legislation requiring voters to present a valid ID when they go to cast ballots in an effort to prevent fraud. A conference committee will iron out differences before the bill goes to Gov. Perry for his signature, and you can bet that all the acronym organizations (ACORN, SEIU, LULAC)  are already mustering their forces for a legal challenge

Many of the legislators made statements that their driving concern was to guarantee honesty and integrity in our voting system. And many of them cast their votes for this and other bills by having a colleague cast their vote for them -- sometimes when they’re not even in town.

It’s called “ghost voting,” a practice which has developed primarily because of Texas’ unusual legislative set-up: 140-day sessions once every two years. To be fair, lawmakers can’t be on the floor of the House or Senate at all times, and sessions are very busy. But we live in an age when any third-grader can use an iPhone to keep up with the latest happenings in Timbuktu; surely, our legislators could find some lobbyists to supply them with the requisite communications devices.

Of course, there’s communication and there’s communication.

Over in my old stomping ground, the Katy ISD, the local school board is, like many others around the state, wrestling with projected budget cuts in state funding. Among the ideas to save the district some dough is elimination of the bilingual program -- an idea which apparently frightens some parents there.

Bilingual education teaches kids in two languages at once -- usually English and Spanish -- rather than having them learn English first. The idea is that by being taught in their native language they can slowly transition into the all-English world without being too far behind others their age. It is one of those edu-theories that administrators and ethnic activists love.

In practice, it doesn’t work quite so well — one California study a few years back found that a lot of kids (some of whom spent their entire school careers in bilingual education) still could not communicate in English and were two or three years behind counterparts in other subjects, although they were well-versed in Central and South American culture.

The California study recommended complete immersion, especially for younger students, as the most effective way to have kids be able to learn English in order to be competitive academically and in the workforce. Early immersion, in fact, put more non-native speakers on a par with their classmates.

The Katy bilingual debate is but one of many developing around the state. The Legislature is trying hard to lessen the impact of the state budget shortfall, but the only thing it could do to avoid cutting funding across the board is to raise taxes — and if you thought there was going to be a shooting war over the Trans-Texas Corridor, watch what happens if they try to sneak a tax increase through.

New American: Bill resurrects TTC

Trans Texas Corridor: Here We Go Again
Written by Kelly Holt       
The New American
Wednesday, 30 March 2011 12:27

Battle-weary Texans who spent much of the last decade working to defeat the proposed — and hugely unpopular — gigantic north-south highway through Texas up to Canada, known as the Trans Texas Corridor (TTC), are being called to take a deep breath and gather forces once again. New bills have been introduced in the biennial Texas Legislature that would revive the old conflicts for sovereignty.

A June 2007 article in The New American dubbed the Corridor the modern El Camino Real, or King’s Highway, an ancient network of trails used by 17th-century Spanish explorers to transport goods and missionaries from Mexico to the new colony. Many Texans believe such an appellation doesn’t seem too far off at all.

The TTC was proclaimed dead two years ago by nearly every public official; however, Texas Governor Rick Perry declared at the time, "We'll build it, but we'll just change the name." Now the Corridor, which has always been the cynosure of Perry's transportation policy, is getting a new push.

State Representative Larry Phillips has introduced H.B. 3789, one of several related bills affecting infrastructure — a reincarnation of the old legislation that enabled the Corridor projects, but without the old name.
Though the history of the Trans Texas Corridor has been well-documented by The New American, and activists in the state are already putting up a fierce struggle, a refresher course doesn’t hurt. The multi-modal, 4000-mile network of highways and toll roads, which would have required over 500,000 Texas acres, gained national attention when Texans learned the real agenda behind the project and sounded the alarm. Even Oklahoma stepped up and enacted its own legislation to prevent the road from jumping the Red River — the Texas/Oklahoma state line.
In January of 2009, Texas Department of Transportation official Amadeo Saenz issued a statement for Governor Perry that declared the TTC dead; in August of that year, the Legislature refused to extend authority for the Texas Department of Transportation to contract with private firms — specifically CINTRA, a publicly-held company headquartered in Spain.
But Governor Perry has never given up. Because with budget shortfalls and a growing population, public funding isn’t enough to fund road projects, Perry turned once again to Public Private Partnerships (PPPs). And with a new legislature, he went to work again on the Corridor. According to Michael Lindenberger of the Dallas Morning News,
Immediately after the last session adjourned, Perry's chief transportation aide promised a hard push to restore the authority to enter into so-called comprehensive development agreements in 2011. And in an interview with The Dallas Morning News just before his re-election in November, Perry said he would ask lawmakers to renew authority for the state to partner with private toll firms.   
“The fact of the matter is that we don't really care what name they attach to building infrastructure in the state of Texas. The key is that we have to go forward and build the infrastructure so that the state of Texas and our economy can continue to grow." He noted that the most important part of the plan to him, its reliance on private capital to help finance toll roads, remains a key priority and an approach he expects will be continued: "We'll continue to use all the tools available to build the infrastructure.”
The new bills serve to reauthorize the old enabling legislation and the dangerous PPP. For Texas this means that existing roadways will be converted to toll roads, and that everything even touching the roads will be under the authority of the tolling entity. Terri Hall, founder of Texans Uniting for Reform and Freedom (TURF), explains:
It would grant the private toll road developers control of not only the toll lanes/road, but also non-toll lanes, frontage roads, buildings on the tollway, parking areas, rest stops, ancillary facilities, etc. It’s eminent domain for private gain all over again, which is what caused a Texas-sized backlash against the TTC in earnest in 2007, when a moratorium on PPPs was put in place.
The bill would also allow contracts to be negotiated confidentially and not be revealed to the public until late in the game. The conversion of existing roads to toll roads would burden Texas drivers with excessive tolls; furthermore, if events proceed as previously, there will be no free road alternatives, property will be seized for the project through fraudulent eminent domain procedures, non-compete clauses will be in place, and Texans will have no recourse. Through the PPP’s toll revenues the coffers of the private partners will be filled, and with partial ownership goes control of the project.
The main focus of this new transportation agenda will be the I-69 plan. Two years ago, this project was forced to keep a lower profile and reduce its footprint; however, H.B. 3789 will renew attention to that corridor.
All of this pales when one knows the bigger picture. The Trans Texas Corridor, a portion of which is in operation and funded by taxpayers (the tolls are really only a tax), serves as part of a national system of corridors designed to facilitate the movement of a gigantic amount of goods coming from foreign countries. The TTC was intended to be the Texas portion of the NAFTA Superhighway, commencing on the west coast of Mexico, and ending up in Canada. Ultimately, the integration of Canada, Mexico and the United States into a North American Union (NAU) must have infrastructure. And these corridors are intended to link the countries.
Texans flat-out do not want the corridors. Opposition to the TTC at every session of the Texas Legislature in recent years has made clear their hearty disapproval. And once Americans in other states have understood the threat to national sovereignty posed by such corridors, they have also expressed their outrage.
It is understood that when it comes to NAFTA, as Texas goes, so goes the nation.
So saddle up and tighten the surcingle for another bumpy ride.
Photo: David Zachry (standing on the left) president and CEO of Zachry Construction Corp., shakes hands with Texas Gov. Rick Perry (standing on the right ) after the state and a private company signed a transportation contract on March 11, 2005, in Austin, Texas: AP Images

Dannin: Toll Road to Serfdom

Link to article here.

The Toll Road to Serfdom

By Ellen Dannin
March 15, 2011
Guest Post
American Constitution Society

By Ellen Dannin. Ms Dannin is the Fannie Weiss distinguished faculty scholar and professor of law at Penn State Dickinson School of Law and author of "Crumbling Infrastructure, Crumbling Democracy: Infrastructure Privatization Contracts and Their Effects on State and Local Governance."

If you want to experience a real disconnect, find out how highway privatization actually works and then read the glowing raves by infrastructure privatization boosters.
They claim that privatization transfers risk to the private contractor, while providing high quality infrastructure that a cash-strapped public cannot otherwise afford. They say that the public will have easy drives with new roads and new lanes, all assisted by the installation of the latest tolling and messaging technology.

But when you look into the history and details of infrastructure privatization, reality differs. Take the story, "Public project, private risk: Virginia looks to partnerships to tackle major jobs" that praises the 1995 California State Route 91 private toll lanes built in the median of a public road. Those private lanes have atroubled history that is still relevant to today's privatized infrastructure. The SR 91 deal forbade the state from doing repairs and maintenance on the public lanes in order to herd drivers to the private toll lanes. As the public lanes were left to deteriorate, potholes led to car damage and dangerous road and, eventually, public anger that toppled politicians.

Today's deals still include similar terms intended to make the toll road drivers' only alternative. Commonly found "noncompete" terms forbid building or improving "competing" road or mass transit systems. They may also require what is called "traffic calming" but which means by narrowing lanes or making other changes to make alternative routes unpleasant or less useful. Other contract terms require that the government "partner" compensate private contractors for "adverse actions," such as promoting car pooling to lower air pollution and urban congestion that could affect revenues. For the next 40 years, the HOT lanes contract with Transurban of Australia and Fluor Corporation of Texas requires Virginia to reimburse the private companies whenever Capital Beltway carpools exceed 24 percent of the traffic on the carpool lanes - or until the builders make $100 million in profits.

Infrastructure privatization proponents often tout their high-tech innovations, such as embedded sensors to monitor road conditions, communication cables, wireless networks, and flashing electronic signs to warn drivers about traffic volume and accidents, and the use of transponders to debit accounts. They also tout using variable tolls that rise during rush hour as promoting choice.

However, because the contracts last generations and forbid competition, defined broadly, they will severely limit transportation innovation and public choice in the US.

The article also says: "The private companies are assuming heavy financial risk upfront." But the reality is that the public bears the greatest financial risk. For the 50, 75, or 99 year life of the contract, we the people must be concerned that our state and local governments take any actions that could be claimed to compete with a private road or be an adverse action affecting the private contractors' revenues - no matter how much they would benefit the public. Just as concerning is that the prospect of facing decades of worry about violating the contracts and fighting claims means that governments will try to buy out the private contractors. We have no idea how that process would unfold and what that price might be.

Freedom of Information Acts require governments - but not private entities - to provide information the public requests. However, increasingly, infrastructure privatization contracts are not made public. When I requested a copy of the now bankrupt San Diego South Bay Expressway (SR 125), I was told it was not available to the public.

According to the story, "The [toll road] companies plan to pay down the debt through tolls collected on the Beltway." However, tolls are not the only source of financing used to fund private infrastructure. The story not only overlooks revenue from adverse action and noncompeting claims, it omits the important role of tax breaks to the private contractors. Those tax breaks include highly accelerated amortization of the investment for deals that last longer than the useful life of the infrastructure. If you were ever puzzled why the contracts last so long, now you know that the answer can be found in the tax code.

Those tax breaks impose two major costs on the public. Government budgets receive less tax revenue. And when the multi-generation contracts required to qualify for the tax breaks expire in the 22nd century, we will still be locked into early 21st century technology and will have traded freedom of choice for antique transponders.

The ultimate argument made by infrastructure privatization proponents is that cash-strapped states have no other choice. But that is also untrue. Alternatives exist or can be made to exist by governments letting bonds to investors and through taxes. State and federal fuel taxes have not been raised in many years. And, particularly those who benefit from improved infrastructure should pay their fair share. Rather than imposing taxes - and tolls are essentially a tax - just on those who actually drive on the toll road, taxing those who benefit from transportation more broadly would spread and share the burden in a fairer way.

If we continue down the infrastructure privatization road, we will learn that the real price is lost democracy and true freedom of choice. The real cost - and it is a heavy one - is the creation of 21st century serfdom and the loss of democratic control that lets us chart our future as a people.

Letter to Texas House Transportation Committee

Letter to Texas House Transportation Committee:

Public Private Partnerships & Comprehensive Development Agreements with non-competes, debt, and public subsidies abhorrent to taxpayers

By Terri Hall on behalf of Texas TURF
April 1, 2011

At Wednesday's public hearing, two issues were brought up that we feel need clarification.

First, about the non-compete language in HB 2186, to hand parts of Hwy 183 in North Texas over to a private corporation for the next 50 years. In the original bill as filed, it had language that somewhat restricted non-competes, but the substitute bill removed that language. The discussion seemed to lead people to believe that removing that language meant there would be a prohibition on non-competes for that project, when actually it means there would now be NO restrictions on non-competes since the original language that was a form of a restriction on non-competes is now gone. Therefore, HB 2186 would now have NO restrictions on non-compete clauses that prohibit or penalize taxpayers if free roads are expanded surrounding the privately controlled toll roads.

Prior to getting some restrictions on non-competes put in place in 2007, Cintra tried to make the entire counties of Collin and Denton the non-compete zones for 50 years on the 121 toll project (meaning NO free roads could be expanded for the life of the contract without paying Cintra for any lost toll revenues!)! So is this really what our elected officials want? In 2007, the Legislature fought hard to prevent this from happening. What's changed to even have this scenario back on the table? The taxpayers sure haven't changed their minds, They're outraged by it.

Second, Ms. Melissa Cubria of TexPIRG brought up the article in the Statesman about the proposed DFW 183 toll project being 100% funded by TxDOT (ie - with our gas taxes). The article did, in fact, refer to the 183 project in DFW, yet during the Committee hearing it was stated from the dais that it referred to 183 in Austin. Read it here and scroll to the bottom of the story (after my introductory comments).

The fact that a road will be 100% paid for by Texas taxpayers and then handed over to a private corporation to gouge our citizens with oppressively high toll taxes at 75 cents a mile for a HALF CENTURY is a piracy of the public's assets. It is what Michelle Malkin said it is, corporate welfare. Texans oppose tolling existing roads because it's a double tax. How much more egregious when the road is 100% built with gas taxes as our existing roads are, then handed over to a private company in a sweetheart deal that will indebt generations, increase taxes and our cost of goods, impede our freedom to travel, and ensure our free roads remain congested for our lifetimes. We can do better than this!

Multiple generations of Texans will be impacted by these 50 year contracts. Is it really worth indebting so many future generations to build today's roads? Thomas Jefferson didn't think so.

"No generation can contract debts greater than may be paid during the course of its own existence." --Thomas Jefferson

The Texas Constitution says that one Legislature cannot financially bind a future Legislature, perhaps based on Jefferson's wisdom.

Please carefully weigh and consider these things in the decisions you face. Represent the interest of all Texans, both this generation and future generations, well. We're counting on you.

Keystone Pipeline protests reach the White House

Link to article here.

The public outcry over the TransCanada Keystone XL tarsands pipeline project picks up a notch amid environmental, eminent domain, and water concerns.

Bottlenecks continue for TransCanada Keystone Pipeline

By MARCIA DAVIS-SEALE - Tribune City Editor


Controversy continues to plague the proposed $7 billion TransCanada Keystone XL tarsands pipeline project.

Environmental concerns are mounting - along with economic concerns that the pipeline would raise Midwest oil prices - all overriding, in the public dialogue, pipeline officials’ statements that the project would collectively provide tens-of-thousands of jobs and substantial revenues for cities, states and counties along its route.

The most recent sources of public outcry include a letter of protest sent to Barack Obama signed by a hundred landowners, a State Department decision to call for more public input on the project, a hydrologist’s study of the project’s potential impact on Texas’ Carrizo-Wilcox Aquifer declaring the pipeline hazards a prescription for disaster, a policy passed by the National Farmers Union against the pipeline, and, more locally, a plea from the Stop Tarsands Oil Pipelines group (STOP) for the regional water board to take a public stand against the pipeline.

The TransCanda Keystone XL pipeline, according to State Department information, could transport as much as 700,000 barrels per day (bpd) of crude oil, with up to 200,000 barrels a day shipped to existing delivery stations in Nederland and Moore Junction, Texas. According to the State Department report, pumping capacity could be increased to as much as 900,000 (bpd).

TransCanada plans for the pipeline to pump oilsands bitumen from the Athabasca tar sands in Northern Alberta, Canada to the U.S. Gulf, where the oil would compete in the marketplace with other imported heavy crudes from Venezuela, Mexico, Brazil, and U. S. offshore production.  The proposed Keystone XL pipeline route crosses six states: Montana, South Dakota, Kansas, Nebraska, Oklahoma and Texas; running 370 miles through 18 counties of Texas:  including Hopkins, Franklin, Wood, Upshur, Smith, and Jefferson counties.  TransCanada plans for the Keystone XL pipeline to intersect the Keystone pipeline at the point of origin in Canada, and in Nebraska and Oklahoma.

The project consists of approximately 1,707 miles of new 36-inch diameter pipeline, with approximately 327 miles of pipeline running through Canada and 1,380 miles in the United States. The first leg of the Keystone pipeline began moving oil last June across Saskatchewan and Manitoba and through the Dakotas, Nebraska, Kansas, Missouri and Illinois.

Points of contention along the Keystone XL pipeline route include planned crossing of the Carrizo-Wilcox Aquifer in Texas and the Ogallala Aquifer in Nebraska.

Because the pipeline route crosses international boundaries, The U.S. State Department holds authority for issuing the official permit for the project, and is reportedly reviewing environmental impact and the pipeline company’s emergency response plans. Yet, without a permit, pipeline officials have exercised eminent domain against landowners along the proposed route, and began surveying and digging the route. Wood and Franklin counties are among the counties where landowners are experiencing this activity.

A decision on the pipeline isn't expected until the fall, but environmental groups and many political leaders have reportedly been urging Secretary of State Hillary Clinton to put the brakes on the pipeline, arguing vital aquifers in several agriculture-dependent states will be made vulnerable.

Debate in D.C.

The pipeline fueled a vigorous debate on Capitol Hill Thursday that pitted economics against the environment, and left the matter unresolved, with partisan feathers ruffled, and passions reportedly raw among both Republicans and Democrats.

Protest letter to President

That same day a letter sent to President Obama and the Secretary of State - signed by 100 landowners including 39 Texas property holders of which nine are Winnsboro and five are Sulphur Springs landowners. The letter purports the dangers of the tarsands pipeline, reporting abuses of eminent domain by the pipeline company, and asking for the president to put a plug in the pipeline plans.

The letter also details concerns that the pipeline will boost gas prices in the country’s Midwest.

According to a press release sent out by the Stop Tarsands Oil Pipelines (STOP) special interest group, “By sending this letter, landowners hope that a Supplemental Environmental Impact Statement that the United States State Department is expected to release in April goes into serious detail noting the difference between the tar sands oil this pipeline would carry and conventional crude and the safety risks that come along with it.” Landowners from four other states along the proposed pipeline route signed the letter: Nebraska, Oklahoma, Montana, and South Dakota.

In East Texas

And on Thursday in Longview, two Keystone XL engineers from TransCanada reportedly spoke with LeTourneau University engineering students, admitting new details centering on safety concerns. According to news reports, one of the engineers told students their teams will respond within four hours in the event of a spill, meaning 150,000 barrels worth of diluted bitumen, a thick oily substance, could escape into the environment before anyone arrives on scene. But a Keystone spokesperson said the pipeline would mean more jobs, and more revenue for the state, and has a lot to offer the United States.

Here, in late March, STOP coordinator Brittany McCallister, asked members of the Northeast Texas Regional Water Planning Group to publicly oppose construction of the pipeline, following presentation of a report by a Houston-based hydrologist and attorney warning that the toxic substances pumping through the pipeline and the proposed pipeline route’s proximity to drinking and irrigation water supplies for 10-12 million Texans could prove “disastrous.” The report can be found online at: .

The State Department

In mid-March the U.S. Department of State sent a media note that they are requesting more public comment on a Supplemental Draft Environmental impact State for the proposed Keystone XL pipeline, beginning in mid-April and extending for 45 days, with more details on that to come.

National Farmers Union

Other public voices against the pipeline include the National Farmers Union, which passed a resolution last month at their national convention in San Antonio adopting a new pipeline policy in response to concerns about the pipeline.

According to Graham Christensen, in public affairs for the Nebraska Farmers Union, the policy that originated in the Nebraska Farmers Union organization and was later adopted by the National Union “stemmed from reported abuses by TransCanada regarding eminent domain, and environmental concerns.”

He told the Tribune, “The policy basically addresses a couple of components,” Christensen said. “One is protection of water resources, particularly the Ogallala Aquifer and also, in general other freshwater resources that could be affected. We don’t want a tarsand pipeline built straight through the Aquifer, which supplies 80 percent of Nebraskans drinking water - overall two  million people drink from this; and supplies 30 percent of the nation’s irrigation, when, there hasn’t been any kinds of studies on what the chemicals would do to the aquifer.…

“The policy,” he said, “also deals with domain threats. We don’t support eminent domain threats from entities that don’t have the authority to exercise eminent domain. The pipeline company doesn’t have that right. The policy also deals with who is actually responsible for clean up.”

Christensen referred to a pipeline spill in the Kalamazoo River last year by a Keystone competitor company named Enbridge. “Enbridge would not claim liability, so it came back to the local community. We adopted a policy that the farmers are not going to be responsible for damages.

“The union is completely grass roots driven, 40,000 due-paying members, so when this delegation unanimously approves this policy, it calls to action to the National Farmers Union. Can we stop a pipeline?” he said. “No, but we can jump into the battle and help people understand what’s wrong here and try to protect our landowners…all the way across the county. An official policy like this gives The National Farmers Union the ability to jump into the conversation.”

“The policy sets certain criteria, that unless the pipeline meets certain criteria, we are going to have an issue, and we cannot support it – this one and all pipelines that want to come in the future that do not meet the criteria.”

A statement by The Nebraska Farmers Union opposing the pipeline referred to the contents of the pipeline “diluted bitumen, a thick, heavy corrosive and toxic form of crude oil is associated with pipeline ruptures at 16 times the rate of conventional crude.”

In Mount Pleasant

According to Walt Sears, administrator for the Regional Water Board, the board took no action on STOP’s recent request for them to publicly oppose the pipeline. He said, “It’s uncertain as to when an official statement would be issued. That information is probably more important to citizens and landowners in the immediate area of the proposed pipeline route.”

He said he was not foreseeing that the water board would have a major role in the public conversation.

“One of the things I anticipate,” Sears said, “is that they [STOP} group will talk to the Sulphur River Basin Authority (SRBA), a governmental entity charged with the water quality in the basin, because some of the pipeline routing goes through that basin. They are the more appropriate forum than this association of water planners. I left the [regional water board] meeting thinking STOP would be making a similar presentation to the SRBA.

A spokesman for the SRBA was not available for comment.

The water board was asked to protest the pipeline after hearing a report drafted by hydrologist Lawrence Dunbar, on a study which Dunbar has been quoted as saying the Sierra Club funded. In the conclusion of his report, Dunbar states,  “a spill in a subsurface aquifer like the Carrizo-Wilcox Aquifer could reduce or eliminate agricultural or domestic use of the groundwater and contaminate groundwater discharges to other waters, “which could have disastrous results.”

In addition, the report states, the fact that the proposed route goes directly through the Mount Enterprise Fault Zone in southern Rusk County only increases the probability of a spill.

City Councilman in Texas

City Councilman Don Williams of New Summerfield in Cherokee County has publicly come out against the pipeline in a letter posted on the Sierra Club website. In his statement he chastises pipeline officials for wanting “to play Russian roulette with the citizens of New Summerfield, Texas.”

Williams states that New Summerfield gets 100 percent of its water from the Carrizo-Wilcox Aquifer, and contamination to the aquifer could make the water needs of 60 Texas counties unsafe, and possibly eliminate the town of New Summerfield. “…there would be no amount of money or jobs that would justify the risk of one spill.”

The National Sierra Club seems to be undergirding protest across the country. A public protest was staged in Winnsboro earlier in the year, and a meeting on the pipeline, sponsored by the Sierra Club and the STOP group, was also held in Mount Pleasant earlier in the year.

Franklin County

Members of the Franklin County Historical Association have expressed opposition to the pipeline crossing land they have designated as a nature preserve, and have called for a thicker pipeline skin at the Big Cypress Basin watershed crossing near Lake Cypress Springs of 1.5 inches thick over the proposed .5 inch thickness.

The Franklin County Water District (FCWD) took over negotiations with Keystone officials on the historical association land, which the district owns and leased to the association. FCWD President David Weidman has told the Tribune that the water district stands in agreement with the historical association that “the portion of the property taken for the right of way should ne minimized, and that the pipeline should be constructed in a manner so as to permit the continued use of the property as a nature preserve to the fullest extent.”

Us motorists rage over toll rates on foreign-owned road

Link to article here.

Though we're not opposed to completely private roads that use no eminent domain, no public money, and have no non-competes prohibiting the expansion of public free roads, this private toll road operated by Macquarie still draws the same sort of backlash and protest. The most telling part of this story is the very last sentence. Macquarie declares it doesn't need to listen to the public because, "We're not a public entity." That sums up why we cannot let Texas roads fall into the hands of private entities...we lose control over the level of taxation, plain and simple.

US motorists rage against Macquarie toll

By Simon Mann
Sydney Morning Herald
March 28, 2011

Drivers are avoiding the Australian-run Dulles Greenway in Virginia amid anger over its high costs, writes Simon Mann in Washington.

Australian investors are being accused of highway robbery by motorists in Virginia who blame Macquarie Group for what they say are exorbitant road tolls.

The complaints have been taken up by a member of the US Congress and Virginia's transport authorities who have agreed to set up a committee to look at ways of making the 22-kilometre Dulles Greenway "more user-friendly".

But the prospect for lower tolls is poor. The road, one of the most expensive in the US, charges up to $US5.25 for car journeys but has not paid a dividend to its owner, Macquarie Atlas Roads, for the past three years. Some residents and local companies have boycotted the road - choosing traffic jams on alternative routes - and week-day traffic volumes fell 3 per cent last year. Despite this, toll increases helped lift income by 1.8 per cent.
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"Either way, residents and businesses lose while a foreign company profits," said Congressman Frank Wolf. "It is my hope that this advisory committee will introduce Toll Road Investors Partnership II [the Macquarie-run local operator] to the concept of being accountable to the people it claims to serve."

The road rage is being reflected in online postings, too. "The only way to affect the way the Aussies conduct business is to Not use the Greenway," one motorist urged.

But the man who runs the road, Tom Sines, chief executive of TRIP II: "We are a toll road and, sure, people don't like to pay tolls and there's probably very little we can do to put lipstick on that pig, so to speak."

Built in the mid-1990s, the Dulles Greenway stretches west from Washington's international airport (named after the 1950s secretary of state John Foster Dulles) to Leesburg, coursing through Virginia's fast-growing Loudon County.

It connects with the state-owned Dulles Toll Road that runs east to the US capital, which levies tolls at much lower rates. Revenues from that road are being used to subsidise the cost of building a rail link from Washington to the airport, and tolls are expected to rise over time. Together, the two roads form State Route 267.

Macquarie bought the Greenway in 2005, subsequently spending big on improvements in return for tolling proceeds through to 2056. Its interest in the road is divided 50:50 between two of its managed funds, Macquarie Atlas Roads and Macquarie Infrastructure Partners. Other assets include toll roads in Chicago and Indiana, as well as private roads in Britain and continental Europe.

The locals' anti-Australian sentiment has not been confined to Macquarie. Transurban Group, part of a consortium building so-called HOT (high-occupancy toll) lanes on Washington's beltway and on interstate highways 95 and 395, has also been caught up in local politics, with councils and residents wary of government dealings over the projects.

So incensed were Arlington County officials that at one point they filed a lawsuit saying that the I95 and I395 legs of the Transurban project were "racist" because they stood to benefit "more affluent, largely Caucasian citizens". Bemoaning a lack of transparency and suspected government subsidies for the road builders, one local editorial observed sharply: "Under current market conditions the private sector would never finance such a risky, uneconomic concept. That means Virginia taxpayers likely will pay a $US250 million subsidy

for the privilege of being tolled by Australians."

The sniping comes amid renewed interest across the US in privately funded infrastructure projects as cash-strapped states battle to balance budgets that have been crippled by the US economic slump.

The downturn, along with petrol prices pushed beyond $US1 a litre by Middle East tensions, is also hurting tollroad operators nationwide. But a prime criticism of the Dulles Greenway is that it does not incorporate distance pricing that would allow it to charge less for short trips. In some cases travelling barely two kilometres attracts the maximum toll. The road has few electronic tag readers and relies heavily on cash collection points.

But TRIP II's Sines says that adding more electronic toll points would cost an estimated $US6.5 million, while distance tolling could ultimately hurt revenues. He says the company might be interested if authorities pitched in upfront and were willing also to "backstop against any lost revenue".

But Wolf says this attitude reveals a loyalty to the operator's foreign masters and that TRIP II is not interested in "protecting current users or attracting new users" of the road. The community advisory committee would aim to "make the road more user friendly and potentially provide [toll] relief''.

However, tolls on the road are set, ultimately, by Virginia's State Corporation Commission, which must approve any increase. They were last raised at the beginning of last year.

Sines is frustrated by the criticism of the six-lane divided roadway, which pays state property tax, leasing charges and is a big donor to community projects. It also pays $US700,000 a year for police patrols. "We're a business, and Congressman Wolf has to realise we're a business," he says.

"We're not a public entity."

National Infrastructure Bank, another boondoggle for taxpayers

National Taxpayers Union Foundation named the National Infrastructure Development Bank Act 2011 the Most Expensive Bill of the Week. Sadly, Texas has a State Infrastructure Bank that primarily loans money to toll entities in order to raise the cost of transportation through DOUBLE TAX TOLLS. These quasi governmental and hybridized public-private ventures caused the Fannie Mae/Freddie Mac mess. When TxDOT runs the State Infrastructure and loans out money to toll entities, they're not using the same lending standards private lenders would. So TxDOT props up loser toll projects and lends money the private sector wouldn't take the risk on (ie - toxic debt). So how does this serve the taxpayers exactly? It doesn't, it's a way to loan our money to irresponsible, unelected toll bureaucrats who make us pay back our own money through tolls, with INTEREST! What do you think about that government recycling program?

Most Expensive Bill of the Week

The Bill: H.R. 402, National Infrastructure Development Bank Act 2011

Annualized Cost: $5 billion ($25 billion over five years)

Congresswoman Rosa DeLauro (CT-3) introduced H.R. 402 to establish a public bank, which "would supplement other federal infrastructure programs, and provide investment opportunities to create jobs, spur economic growth, and help build an infrastructure for the future." As a wholly-owned government corporation, such as the housing entity Fannie Mae, the bank's financing would be backed by the full faith and credit of the US government.

The National Infrastructure Development Bank would issue bonds to eligible lenders, including regional, state, and local entities, as well as commercial banks. Funds would be directed to transportation, environmental, energy, and telecommunications projects, each requiring a different set of standards to be considered by the four committees within the bank.

The bill authorizes $5 billion for each of the next five years. Funds would serve as the base capital from which the bank would issue bonds. In the President's budget proposal, a similar bank was outlined at the same $5 billion annual cost but instead over six years.

Lawmakers push privatized toll roads, putting affordable travel out of reach

These articles show how out of touch our politicians are to the plight of every day Texans.

Lawmakers may like outsourcing the tax hikes to private companies, but taxpayers don't. When these deals mean paying 75 cents PER mile to access our PUBLIC roads, it's like adding $15.00 to every gallon of gas you buy! So when these lawmakers and so-called "fiscal conservatives" tell you they're balancing the budget WITHOUT raising taxes, you'll know they're lying to ya.

How many Texans can afford that? Even if you never take the road, you'll be paying for it. In the the last paragraph of the Statesman article below it says the 183 toll project in DFW will be 100% paid for by ALL Texans' gas taxes, yet they're still going to hand it over to Cintra or some private, for-profit toll road company (using a concession CDA or PPP) to collect the tolls (that will charge 75-80 per mile). If this doesn't tell you that this push to privatize and toll is NOT about a lack of money for roads, but rather a way to MAKE money for roads, then I don't know what would.

No Texan should have to pay a TOLL TAX (a DOUBLE TAX) to access a freeway that's ALREADY PAID FOR nor should a PUBLIC road that's paid for EVER be owned and operated by a private company! It's eminent domain for private gain and highway robbery. We're gettin' fleeced in broad daylight, Texas!

Then there's the toll collection problem. TxDOT has added up to 4000% administrative fees for pay by mail, for those who don't buy into the government TollTag system.

As an example of just what a taxpayer disaster it is to hand control of our public roads to private, foreign toll operators using CDAs, drivers on a road operated by Spain-based Cintra (who has won three Texas contracts already) in Canada receive their first bill totaling thousands of dollars in fines years after they supposedly took the tollway. The government has no power to step-in and protect motorists from runaway taxation nor disputed toll fines.

A 2009 article in the Toronto Star chronicles the nightmare:

"’We, as a government, have no control over that, as a result of the (Mike) Harris government's deal,’ to lease the toll road to a private consortium for 99 years and include a provision in the contract forcing the transportation ministry to deny new plates to anyone who doesn't pay the 407 whatever it demands, said Bradley.

“The 407 ‘negotiated a deal that was very favourable to them and they covered all the aspects of the deal that they would want,’ said Bradley.

“Many readers said they think the 407 deliberately holds back invoices on unpaid balances to allow interest charges to grow, but Bradley noted that it "is responsible for establishing its own business practices, and under its deal ... it has the right to set and collect tolls and administration fees and interest."


Link to Statesman article here.

Law would allow private tollway deals for MoPac, U.S. 183

Legislature warming to long-term leases with private companies after spurning the approach in 2007 session.

By Ben Wear


Updated: 5:15 a.m. Thursday, March 24, 2011

Published: 7:41 p.m. Wednesday, March 23, 2011

Private toll road contracts, which fell out of legislative favor in 2007, are making a comeback this session.

And that includes at least the potential that two such projects in Austin, the MoPac Boulevard (Loop 1) toll lanes and U.S. 183 in East Austin, could end up being financed, built and operated for decades by private firms.

State Sen. Kirk Watson, D-Austin, who is carrying a bill that would allow such contracts on those two roads, said it is not necessarily an endorsement of that approach or an indication that the toll projects will end up in private hands.

"I want to make sure all of the tools are on the table," Watson said this week. "But it will be up to the local (metropolitan planning organization) to see if it gets used."
Right now, the local plan is for the Central Texas Regional Mobility Authority, a toll agency that runs the 183-A tollway in Cedar Park, to build and operate the $248 million MoPac and $678 million U.S. 183 projects.

The Texas Department of Transportation would contribute $70 million in tax money to the MoPac project, which involves adding a fourth, tolled lane on each side between Lady Bird Lake and Parmer Lane, and $130 million to build express toll lanes and frontage roads on U.S. 183 between U.S. 290 in Northeast Austin and Texas 71 near the airport. The mobility authority, in theory, will raise the rest through borrowing.

But the authority's development plans in general were put on hold for at least two years when the 2008 credit crunch hit and it became difficult to borrow money. Carlos Lopez , TxDOT's Austin district engineer, said the ability to bring in the private sector would be an "insurance policy" if something goes awry with the TxDOT and mobility authority approach.

Watson's bill, which he filed March 11, has not yet been given a committee hearing. But four similar bills, allowing TxDOT to reach long-term leasing agreements with the private sector to build tollways in Houston and Dallas-Fort Worth, made a lightning-quick trip through the Senate Transportation and Homeland Security Committee Wednesday .

All were approved unanimously and then channeled to the Senate's queue of uncontested legislation. Such bills are generally approved en masse by the Senate with no debate, meaning that the toll road bills in effect are almost surely halfway through their legislative journey. Similar bills are pending in the House, including one by state Rep. Larry Phillips, R-Sherman , that lists a dozen tollway projects that would become eligible for what are generally called concession agreements.

The Austin-area roads, however, are not included in Phillips' legislation.

This renewed embrace of toll road concessions is a notable departure from 2007, when the public and lawmakers soured on the idea of private companies being in control for a half-century of tollways on the state highway system, and profiting from those leases. Such deals, particularly the participation in them of foreign companies, had become a high profile issue in the 2006 gubernatorial election, and the fervor continued into the new year and the legislative session.

The 2007 Legislature passed, and Gov. Rick Perry signed into law, a bill that put a moratorium on all but a handful of such potential deals. Authority for TxDOT to reach the long-term deals in general expired in September 2009, and the ability to reach agreements on the excepted roads from that 2007 law will die on Sept. 1 this year.

However, with state gas tax revenue stagnant and federal highways grants diminishing, TxDOT officials have said that sometime next year they will have no money available to approve construction of new road projects. That threat has lawmakers taking a fresh look at concessions, but on a case-by-case basis.

Anti-toll road activists on hand for the committee hearing Wednesday let legislators know that time has not diminished their distaste for private toll road agreements. Raising the gasoline tax would be a cheaper approach, said Don Dixon, a retired San Antonio mechanical engineer.

"We're going to these fringe processes" to fund highway construction, he said. "We're going to have a two-tier system: those who can afford to drive the toll roads, and those who can't."

Opponents were also disturbed that TxDOT planned to pour billions of public dollars into projects that likely will lead to private profits by operating companies, according to TxDOT figures. In one of the four projects named in the bills approved Wednesday, TxDOT would supply almost one-third of the $3.7 billion cost for the North Tarrant Express in the Fort Worth area. In another case, the Texas 183 managed lanes project, also in Dallas-Fort Worth, TxDOT would cover the entire $1.3 billion construction cost. The operator would, in theory, be responsible for only the operating and maintenance costs to follow.


Senate transportation panel boosts Dallas-area private toll projects


Transportation Writer

Dallas Morning News

Published 23 March 2011

The Senate transportation committee took steps Wednesday to speed the development of two major toll projects in North Texas, approving bills that will expand the state’s authority to partner with private firms to build toll roads.

The bills both passed unanimously in the committee, though they still must be passed by the full body and win acceptance in the House. If they become law, the Texas Department of Transportation will be permitted to partner with private firms to build a 28-mile stretch of Interstate 35E between Dallas and Denton and a 9.1-mile segment of State Highway 183 from Dallas through Irving.

The projects would add free lanes and new paid managed lanes. The roads would be financed with public and private funds. In return, the companies would be given rights to toll the paid lanes for decades.

Denton County Judge Mary Horn said privately financed toll roads are essential given that Texas roads funds are running short.

“We keep hearing the message loud and clear from constituents — do something now,” Horn said. “Leveraging private equity through a public-private partnership is the best and perhaps only way to address growing congestion before it worsens further.”

Terri Hall, a San Antonio activist who has spearheaded years of opposition to private toll roads, spoke out. “You remember the dust-up in 2007, and Texans haven’t changed their mind,” Hall said. “It’s public money for private profit, and the public hates it.”

The committee also heard a compromise bill that would significantly limit the late fees charged by the North Texas Tollway Authority, a practice that has left some frequent violators owing thousands of dollars for unpaid tolls.

If the bill passes, the NTTA would have to stop charging $25 for every unpaid toll transaction. Because a single invoice can easily have scores of transactions, the fees can quickly dwarf the original amount owed.

The bill would instead allow the NTTA to assess the $25 for only the first eight unpaid tolls per invoice. After that the bill’s $200-per-invoice cap would apply.

NTTA Executive Director Allen Clemson told senators he supported the bill, written by Sen. Jane Nelson, R-Flower Mound.

Nelson initially filed a bill that would have capped late fees at $25 per invoice, a move that the NTTA said would cost it tens of millions of dollars each year.

Clemson vowed to work with Nelson at the time to craft a compromise.

Study uncovers dangers of privatizing infrastructure

Link to article here.

There are bills currently before the legislature that would not only privatize our public highways (HB 2255), but would also privatize parking meters, water facilities, and other infrastructure (HB 2432). So as this study points out, it means the taxpayers have to pay private entities penalties for expanding our public roads or closing down a road for a parade.

If it sounds too good to be true. . . What you need to know, but don’t, about privatizing infrastructure

Authored by: Ellen Dannin
Posted By: Ellen Dannin - Pennsylvania State University
Posted March 2, 2011

Remember the old joke about some sharpie who takes innocents by “selling” them the Brooklyn Bridge? By the time the poor guy finds out he was taken, the crook is long gone.

Flash forward to the present. States and cities are being told that they can fix their budgets and have money left over by leasing their infrastructure for 50, 75, or even 99 years. It sounds great, even miraculous. But we all need to slow down and do our homework, because the rule “If it sounds too good to be true, it is” still applies, and there are good reasons why state and local governments should not want any part of these deals.

The truth is that, rather than making money on just tolls and fees, private contractors make their money through big tax breaks and by squeezing state and local governments for payments for the life of the contracts.

In fact, tax breaks explain why the deals last generations. One tax break for leases that last longer than the useful life of the infrastructure allows investors to write off their investment in just over a decade. A second tax break lets private companies issue tax-free bonds to finance their deals. While tax-free bonds and tax breaks make it less expensive to finance these deals, the downside is that governments lose tax revenue. Losing tax revenue puts government budgets deeper in the red and worsens problems privatization was supposed to fix.

But that’s not all. Infrastructure privatization contracts are full of “gotcha” terms that require state or local governments to pay the private contractors. For example, now when Chicago does street repairs or closes streets for a festival, it must pay the private parking meter contractor for lost meter fares. Those payments put the contractors in a much better than the government was. It gets payments, even though Chicago did not get fares when it had to close streets.
Highway contractors can be entitled to payments if there is an accident on the highway and if the police, fire, and emergency crews do not give “appropriate” notice and do not perform their emergency work in a way that is “reasonable under the circumstances”. And, given the vagueness of those standards, states and cities may end up paying just to avoid the costs of litigation.

Highway privatization contracts also often include terms that forbid building “competing” roads or mass transit. Some even require making an existing “competing” road worse. For example, the contract for SR-91 in southern California prohibited the state from repairing an adjacent public road, creating conditions that put drivers’ safety at risk. A proposed private highway around the northwest part of Denver required that local governments reduce speeds and install speed humps and barriers and narrow lanes on “competing” roads to force drivers to use the privatized road.

And worst of all, these deals put a stranglehold on democratic decision making and the public interest. For example, Virginia decided to promote carpooling to cut down on pollution, slow highway deterioration, and lessen highway and urban congestion. As a result, Virginia must reimburse the private contractor for lost revenues from carpoolers, even though not all of the people in a car would otherwise have driven individually. Chicago is not allowed to reduce the number of parking meters for the life of the contract. So when there have been changes that mean parking meters in one location are no longer appropriate, the city has had to install meters where none have ever been.

All of these contract terms put the public safety and well being last and the investors’ profits first. And, although infrastructure privatization proponents claim that the deals transfer risk from the public to the contractors, a fair reading of the contract terms shows that this is not the case. State and local governments lose control of their destinies and communities, while giving private investors power over our new dollar democracies.

These problems will persist even when the private contractor does a good job in maintaining the infrastructure and providing good public access to it. But contractors have not always done a good job in keeping their agreements.

Shortly after it took over the Indiana Toll Road, the private contractor put sand-filled barrels in turn-arounds with no notice to the state. State officials begged and pleaded for the barrels to be removed, so police and emergency crews could get to accidents and deal with other public safety problems as quickly as possible. Those pleas fell on deaf ears, while the turn-arounds remained blocked for months.

Or consider the poor people of Auckland, New Zealand.  Their government had become enamored of privatization, because they had been told that the private sector always provided better service at lower cost. The private company that bought the electrical service for Auckland decided to save costs by eliminating backup power, by not replacing parts of the system that were years past their normal life, by doing no maintenance, by having no electrical cables in reserve, and by terminating its repair crews. When they were terminated, the crews left NZ to find work elsewhere. All these decisions were made to increase company profits.

Those decisions may have lowered the company’s costs, but at a huge price, most of which it did not bear when the power cables to Auckland’s central business district failed. Banks, stock exchanges, restaurants, and all functions that depended on electricity were hard hit. Water, sewage, and all systems went down, and the power outage lasted nearly two months, because it had no repair crews or replacement components on hand.

Auckland's businesses lost millions of dollars. Companies tried to stay open by using generators, office workers climbed stairs in skyscrapers in mid-summer, and generator noise and diesel smoke filled downtown. At one point Auckland was provided power to essential facilities through an electric cable plugged into a large ship in the harbor.

You would think that New Zealand privatization advocates would have rethought their positions after they saw the carnage created by Mercury. But that was not the case. They actually claimed that the problem was caused by not having privatized enough infrastructure. While ludicrous, given what they had experienced, that view is not unique.

Consider, then, that at this very moment, state and local governments are contemplating signing contracts that restrict their rights to inspect infrastructure paid for with public money. Consider that they are agreeing to sign away their ability to protect the public interest and are setting in motion the same sort of disaster that Auckland faced, while the federal government is offering tax breaks to promote privatization.

The lesson and warning for states and local governments who are being wooed by private contractors is to do their due diligence. Read the contracts. Demand explanations and information. Ask for evidence that the public sector cannot do what private contractors do — and at lower cost – since the public sector does not need to pay dividends to investors. Get advisors who are not beholden to the privatization industry. And use common sense.

If you had thought the miracle of infrastructure privatization sounded too good to be true, now you know it is. But if you still have a hankering to give privatization a try, well, I just might have a bridge to show you . . .

You can find more details in Crumbling Infrastructure, Crumbling Democracy: Infrastructure Privatization Contracts and Their Effects on State and Local Governance. It was first published in the Northwestern Journal of Law and Social Policy at 6 Nw. J. L. & Soc. Pol’y 47 (2011),

Grand Pkwy design to begin

Link to article here.

Remember this is a greenfield project through the Katy prairie to benefit ExxonMobil (think economic development in the name of a "public use"), not commuters stuck in traffic on 290E on the outskirts of Houston.

Grand Parkway gets green light for design work

But no funding authorized, and foes not swayed


Houston Chronicle

Feb. 25, 2011, 5:39AM

AUSTIN — The state Transportation Commission on Thursday granted the Texas Department of Transportation authority to begin design work and negotiating contracts to build a key segment of the Grand Parkway.

The unanimous vote did not, however, authorize funds to start work on Segment E of the tollway, which would link the Katy Freeway to the Northwest Freeway, just west of Fairfield.

"The Grand Parkway project is an important project for our region and our state," said state Sen. Tommy Williams, R-The Woodlands. "Having a loop that passes around Houston, whether it's the third or fourth loop depending on where you start counting them, … will help reduce congestion and facilitate economic development."

Williams, who chairs the Senate Transportation Committee, called the parkway one of his highest priorities.

TxDOT spokesman Mark Cross said the agency estimates it will cost about $350 million to build the 15 miles of toll road linking Interstate 10 to U.S. 290. He said the agency has no construction time frame, but the Transportation Commission wants work under way as soon as possible.

When completed, the parkway would be about 180 miles in circumference - running as far north as Tomball and New Caney, as far south as League City, as far west as Katy, and as far east as Baytown. The total price tag for the project is expected to exceed $6 billion.

Suburban sprawl

Harris County should finish its review of the financial viability of the parkway toll project in the next couple of months, said Mark Tomlinson, director of the Texas Turnpike Authority, which builds and operates the state's toll roads.

Opponents of the long-sought outer-outer loop insist it will do little to reduce commuter congestion and will spur further suburban sprawl.

"Many people are going to move to the region, and we do need to spend money on transportation infrastructure, but this won't help," said Jay Blazek, a researcher with Houston Tomorrow, which favors greater urban planning and expansion of mass transit. "By doing this project, TxDOT is deciding urban planning for us."

He said the low-population densities generated by suburban sprawl promote further congestion and make it much more expensive for cities to maintain infrastructure.

Other critics say the new segment of the toll road no longer is needed with the completion of Fry Road, which roughly parallels the expected path of Segment E.

"If TxDOT is running out of money, one would hope they would take the last of their money and use it to solve transportation problems for real people," said Robin Holzer, who chairs the Citizens' Transportation Coalition, which long has opposed the Grand Parkway project.

"Look at congestion in Dallas, look at what's happening on 290, look at what's happening in San Antonio or Austin - are we really saying this is the best use TxDOT can come up with for $350 million? That's absurd," she said.

Dates back 3 decades

The history of the Grand Parkway toll road has been marked by controversy over the past three decades. In the 1980s, then-Texas Highway Commissioner and future Houston Mayor Bob Lanier came under fire for owning 1,700 acres near the proposed path of the parkway. At least two other lawmakers had to leave their posts at various transportation agencies involved in the project due to similar conflicts of interest.

Jeff Moseley, a former Denton County judge and current CEO of the Greater Houston Partnership, rejected the criticism of the proposed toll project, calling it a key to Houston's economic viability.

"The reality is, this 180-mile loop was contemplated in the late '60s as a reliever to the growth for the region," Moseley said. "Some things have come forward that have added to the strategic value of the corridor, and probably the biggest is the tremendous population density that has moved to our region."

He said the toll road will play a key role in allowing shippers to get their goods quickly to and from the Port of Houston, which he said would see a significant uptick in business because the Panama Canal will begin allowing larger ships though.

"When you shift logistics for the mid-continent of America to Houston, you have to have a Grand Parkway," Moseley said.

Corinth pressed to endorse 80 cent per mile tolls on I-35

Link to article here. Lawmakers are leery of re-authorizing controversial public private partnerships (PPPs), or privatized toll road contracts called Comprehensive Development Agreements (CDAs) in Texas. Lawmakers have said regions must show local support for private toll roads before they'll bless it. So bureaucrats at TxDOT and the Regional Transportation Council (RTC) are going around trying to gin-up "support" for 80 cent per mile tolls on I-35E in Denton County by getting cities, counties, and other groups to pass resolutions in favor of a deal that would benefit a private, foreign toll operator. They can't go to the public who doesn't support such draconian taxation nor ceding control of our public roads to a for-profit entity, so they fabricate public support by trying to strong-arm politicians and precinct chairs to pass resolutions against the public interest. Never confuse support of politicians with actual public support in these circumstances. Our politicians have shown time and again they'll sell us out in a heartbeat over our loud objections. Beware of these tactics and DEFEAT every one of them!

Corinth pressed on I-35E widening

County says project funding hinges on cities’ endorsement

06:30 PM CST on Sunday, February 13, 2011

By Peggy Heinkel-Wolfe / Staff Writer
Denton Record Chronicle

CORINTH — Denton County leaders have asked the Corinth City Council to join other Denton-area cities along Interstate 35E in endorsing a plan that would bring in a private developer to widen the highway from the Bush Turnpike to U.S. Highway 380.

County transportation consultant John Polster told the City Council that even if the Texas Department of Transportation devoted all the funding it had for the next decade, it would not be enough to pay for the nearly $5 billion project.

The state has $800 million available for all projects in TxDOT's Dallas district and the county has $500 million available for I-35E from its own bonds and the tolling of State Highway 121.

Even though the county and the state don’t have the money to widen the road, developers such as the Spanish toll firm Cintra consider the project lucrative, he said.

A private developer could charge anywhere from 15 cents to 80 cents per mile in privately managed lanes to recover its investment in the project.

People could still drive in one of the four free lanes, or on the frontage road, but if they wanted to get to their destination faster, they could pay the variable toll to travel in the managed lanes.

“They [the managed lanes] guarantee a travel speed of 50 mph,” Polster said.

In other words, the more congestion there is, the higher the variable toll to guarantee the free flow of traffic in the managed lanes.

Polster also told the council that, while the toll lanes would run the entire length of the expansion, the majority of the revenue from the managed lanes would be expected between the turnpike and State Highway 121.

But the kind of project Denton County is proposing — a public-private partnership — got kicked to the curb by the Texas Legislature in 2009. A few projects in the Dallas-Fort Worth area were grandfathered in, including the reconstruction of Interstate 635, the North Tarrant Express and the DFW Connector, popularly known as the Grapevine Funnel.

In order for the Legislature to revisit the funding mechanism for Denton County, state representatives are looking for endorsements, such as city council resolutions, of the concept, Polster told the council.

Council member John Booher questioned why — funding model aside — Corinth should endorse a project that would change the exit ramps and make it difficult to stop in the city.

Polster told him that the design for the managed lanes would require that drivers travel certain lengths uninterrupted for safety and mobility, but he would look into the design changes and report back.

Booher questioned whether public officials could make an informed decision about the deal, since some of the funding assumptions are private. Toll road developers conduct the research on the profitability of variable tolls but consider their research methodology proprietary, Polster said.

In an interview Friday, Booher said he felt the council wasn’t given enough information about the way the bond package would be set up.

“If the bondholders are getting both the yield of a private sale and the tax breaks of a public sale, that implies the deal is high-risk,” Booher said.

He questioned whether the county would really be protected if the bondholder couldn’t make the payments, even though county leaders have said they could sell the road to another investor.

“If the business model fails, why would someone else buy it, without the county taking more of the risk?” Booher said.

The Corinth council is expected to take up the matter at its regular meeting Thursday.

Critics of SB 18 get noticed

Link to article here.

Too Imminent

Eminent domain reform is on the legislative fast track, but activists aren’t cheering.

Wednesday, 16 February 2011
Ft. Worth Weekly

The Legislature’s latest attempt at passing an eminent domain reform bill looks like it might actually make it to the finish line and end up on Gov. Rick Perry’s desk for his signature. For six years the topic has been examined, poked, and prodded by lawmakers, property owners, and myriad special-interest groups led by the oil and gas industry. Similar bills have died before being passed into law. Perry vetoed eminent domain legislation in 2007 while he was pushing to establish the privately owned Trans-Texas Corridor tollway.

This session looks different. Senate Bill 18, whose chief sponsor is Sen. Craig Estes of Wichita Falls, has been given the royal blessing by Perry, who dubbed the bill an “emergency issue” and encouraged lawmakers to get ’er done. metro
Steve Doeung represented himself in court while fighting eminent domain. Jeff Prince

The Texas Senate approved the bill unanimously last week. The Texas House is now considering it. Meanwhile, the mainstream news media is characterizing the bill as a boon for property owners. A Fort Worth Star-Telegram headline proclaimed: “Fast-tracked Texas bill would empower homeowners against eminent domain.”

“Texas Senate passes bill to extend property rights,” said a Houston Chronicle headline.

Folks such as local rancher Billy Mitchell ought to be thrilled, right? In recent years, government agencies and private companies have used eminent domain powers to force North Texas property owners like Mitchell to sell their land for what amounts to private development — natural gas pipelines, gas rigs, privately owned toll roads, Trinity River Vision-type projects, or just the expansion of a shopping mall. Activists have been hoping that legislation would be passed this year to add protections for property owners. The issue draws a broad spectrum of support, and activists thought new legislation might be doable even in a Republican-dominated legislature.

But Mitchell isn’t thrilled. He’s mad.

“The bill is totally useless,” he said. “It’s doing what the creator designed it to do — make the voters think he’s doing something. Estes is just trying to get brownie points.”

Other grassroots organizers are echoing that sentiment.

Texas has been massaging its eminent domain laws ever since 2005. That’s when a U.S. Supreme Court ruling in Kelo vs. City of New London opened the doors for municipalities seeking to use eminent domain to seize property for what are essentially private projects. The court ruled that seizing property for private development could be considered as “public use” if the economic growth and tax boosts from the new development were expected to benefit the community.

Texas lawmakers say the new bill would make it more difficult for a government entity or private company to seize property “if the taking is not for a public use.” But therein lies the rub: In the bill, as in the current law, words like “public use” and “bona fide” are left undefined. The proposed law, just like current law, requires making a “bona fide” financial offer to a property owner during the eminent domain process, without setting criteria for what constitutes such an offer.

Mitchell found out the hard way about the vagueness of the current law’s language — and the expensive nature of interpreting it in court. He spent about $100,000 on legal fees while trying to prevent a pipeline company from using eminent domain to grab his ranch property for natural gas pipelines.

“The oil and gas companies can run up your attorney fees by taking you to court to decipher what words like ‘bona fide’ mean,” he said. “Another one is ‘public use.’ The pipeline companies say they serve the public. But McDonald’s serves the public.”

The proposed legislation would still allow a private, for-profit company to use eminent domain laws to take his ranchland against his will, he said.

“All I wanted was a jury trial and a day in court,” he said. “The lawyers ran up bills with depositions — they kept me all day long knowing I’m paying my attorney $300 an hour. They asked me what elementary school I went to and what the physical address of my elementary school was — I’m 53 years old! The deposition was two inches thick.”

During the long fight, oil and gas employees entered his property on several occasions and left his gate open, allowing his cows to escape, Mitchell said.

Many months later, Mitchell still hadn’t received a court date. “Then my attorney said if I wanted my day in court, I’d probably spend another $100,000,” he said. “I never did get my day in court.”

Fort Worth resident Steve Doeung got his day in a Tarrant County court while fighting against the eminent domain seizure of his Carter Avenue residential property. Chesapeake Energy wanted to bury pipelines across residents’ front yards to transport gas from a nearby drill site. Doeung resisted and represented himself in court, squared off against Chesapeake’s team of lawyers, and did an admirable job of standing up to the experienced attorneys. But he prevailed only after Fort Worth City Council member Kathleen Hicks, State Sen. Wendy Davis, and others helped broker a deal to bury the pipeline alongside I-30 — the first time a gas-gathering pipeline has been allowed in a Texas Department of Transportation right-of-way.

Doeung became a lay expert on eminent domain during his fight, and he characterizes the
new bill as weak and mostly just political posturing.

“When I read it, I didn’t really see why they are doing this,” he said. “It doesn’t benefit us, it only reinforces the takings by private corporations. The bill starts out sounding good, but then it gives all these exceptions that take the meat out of it.”

For instance, an exception is made when a property is deemed as “blighted.” Determining whether a property is blighted can open a mass of legal loopholes.

“The list of exceptions goes on and on,” said Terri Hall, founder of the San Antonio-based grassroots Texans Uniting for Reform and Freedom (TURF). “The language is so broad you can drive a Mack truck through it.”

Exceptions usually mean one thing: See you in court. “Whoever has the most high-priced lawyers will prevail, and you can bet it’s not the landowners,” Hall said.

The fact that the oil and gas industry lauds the bill speaks volumes, critics say.

“No wonder the pipeline association is so happy — [the bill] puts an exclamation point on the rights they already have,” Doeung said, referring to the Texas Pipeline Association, which supports the bill.

Pipeline companies have fought protracted legal battles with ruthless fervor when seeking property. So why would they support legislation allegedly designed to strengthen property rights?

“It’s an important bill for the landowner,” said the association’s director of governmental affairs, Thury Cannon. “There are really not any benefits for pipelines in that bill.”

He said the legislation gives landowners more protection and lengthens the process of eminent domain seizures. The association supports the bill because “it’s good business for every business to be a good neighbor,” he said.

Doeung, Mitchell, and others who have battled pipeline companies scoff heartily at the idea of pipeline operators appreciating a more level playing field for landowners.

Texas House members could amend the bill, but the pipeline association doesn’t want to see that.

“We hope the bill can go unamended through the process,” Cannon said. “The bill is a very delicate compromise between all interested parties, and it’s been so for a long time. We hope that all interested parties can stick to the agreement that is currently in Senate Bill 18.”

Melissa Cubria is an interested party, but she’s seeking amendments. Cubria, an advocate with the Texas Public Interest Research Group, said the bill doesn’t protect landowners.

“It’s a special-interest giveaway they cloaked in the guise of eminent domain reform,” she said. “They are actually representing the interests of oil and gas entities, private toll road investors, and developers. I’ve spoken to landowners, and they are furious.”

The current proposal is a watered-down version of the 2007 bill that Perry vetoed, which is the only reason he is trying to push it through so quickly now, Hall said.

“It won’t stop anything that’s he got on his agenda, such as privatizing a bunch of Texas highways,” she said. “They can still take your land in the name of public use and hand it over to a private entity for private gain. That’s why he’s willing to sign it.”

Other supporters include the Texas Farm Bureau, which opposed Perry in early legislative discussions on eminent domain. But that organization got what it wanted — compensation for diminished access after eminent domain is used to take property.

Activists such as Hall want more.

“What we’re about is protecting private property rights, not how do we get compensated fairly once a government entity has targeted your land for condemnation,” she said. “We’re trying to prevent wrongful taking in the first place.”

Bill Peacock, vice president of research at the nonprofit, nonpartisan Texas Public Policy Foundation, isn’t quite so dire in his description of the bill. But he too says the legislation needs amending to provide more protection for landowners and predicts that even with changes it will fall short of an ideal bill.

“I think it will pass the House as a better bill than what came out of the Senate,” he said. “If it passes with some improvements, I think we’d be about 60 to 70 percent of where we need to be in property rights protection.”

Estes, the Senate bill’s chief sponsor, is pleased that stakeholder groups as diverse as farmers, developers, ranchers, and oil and gas drillers are supporting the bill. He wants it to pass the House without changes.

“This is a giant step forward,” he said. “People from all sides of this issue have said, let’s get this passed and under our belt, and we’ll see where it goes from there.”

Critics say that “giant step forward” would actually be a step backward, passing weaker legislation than Perry vetoed four years ago.

“Make Perry sign that one,” Hall said.


Link to article here.

Texas Senate passes property rights bill
By TERRENCE STUTZ / Austin Bureau
This email address is being protected from spambots. You need JavaScript enabled to view it.
Published 09 February 2011 12:54 PM

AUSTIN — Legislation aimed at strengthening the rights of property owners in eminent domain cases in Texas won unanimous approval in the Senate on Wednesday.

The Senate approved a similar measure two years ago, but it fell victim to an impasse in the House that killed scores of bills in the final days of the last legislative session. It is expected to fare better in the House this year.

Sen. Craig Estes, author of the proposal, said his aim is to “restore balance” in the eminent domain process in which a government agency or other entity takes private property for a public purpose and compensates the landowner.

Despite previous changes in the law, Estes, a Wichita Falls Republican, said the “deck of cards is still stacked against private property owners” because the eminent domain process “does not always properly recognize the true value of a private landowner’s interest.”

The bill would allow the original landowner to repurchase the property if no progress toward public use of the land occurs within 10 years of when a government acquires it.
The senator said his bill and similar measures in recent years were prompted by a U.S. Supreme Court ruling in 2005 that sanctioned the use of eminent domain for economic development projects.

In 2009, Texas voters approved a constitutional amendment that prevents government agencies from seizing private property and turning it over to a private developer to increase the local tax base.

That amendment and a 2007 law put new restrictions on eminent domain, but property rights advocates contend that additional safeguards are needed. Some critics say Estes’ bill doesn’t go far enough because it will allow government entities to create private corporations that could condemn land, as has happened with some private toll roads.

“This legislation will benefit utility companies, the oil and gas industry, real estate developers and private toll road investors before it ever has the opportunity to work on behalf of the citizens and landowners of Texas,” said Melissa Cubria of Texas PIRG.

The eminent domain legislation was declared an emergency by Gov. Rick Perry, allowing it to be considered in the early weeks of the 2011 session. Perry came under criticism in 2007 when he vetoed a property rights bill that he said would lead to increased lawsuits in eminent domain cases.

Typically, when the property owner and governmental entity fail to agree on a price for the land, the entity files suit to condemn the property so it can be acquired. The owner has the right to a hearing before a court-appointed panel of three commissioners, who determine a fair price. A landowner still dissatisfied has the right to a trial.

Grecians protest high PPP toll taxes

Link to article here.

It's interesting to note that Greece has many public private partnership (PPP) toll roads (think: public money for private profits). It's certainly no coincidence then, that Goldman Sachs was the architect of Greece's financial collapse, nor that Goldman Sachs is a primary player in financing PPPs. The Texas Senate Transportation Committee has a hearing tomorrow to consider re-authorizing PPPs. Texans beware!

In Greece "I won't pay" anti-toll activists take over toll plazas, force gates

Posted on Mon, 2011-02-07, Toll Road News
In Greece mobs of activists have been taking control of toll plazas, raising gates and granting motorists free passage. From noon until around 3pm Sunday at many toll plazas around Greece toll road companies lost control of toll plaza operations to crowds of protesters, and direct action radicals.

Gates were apparently placed in the up position, toll collectors were frightened off and the traffic waved through the toll lanes without any tolls being taken.

This is the most radical action yet taken by a movement whose name is translated from Greek as "I won't pay, I won't pay."

It is unclear what proportion of toll plazas in the country were affected.

Most expressways in Greece have been financed by toll road companies under toll concessions or public-private partnerships (PPPs) with the national government. Some have a mix of public and private money spent on them.

The activists speak of an array of different grievances - against the concession contracts, against announced toll increases, against lack of competing free roads, against fuel taxes plus tolls, against tolls...

The direct action at the weekend was an escalation of activity by a 'national coordinating committee' that appeared to be aimed at overwhelming toll companies' security and to make any police counter-action difficult to mount.

There were protests at toll plazas in January.
Not just 'protest'

Local reports including news agency reports called yesterday's action "protests."

But to the extent the action went beyond display of banners, hand-out of leaflets and speechmaking, and involved action to seize control of toll operations it is more than "protest."

Words come to mind like trespass, obstruction, intimidation, incitement, criminal threatening, tortious interference with business, conspiracy, racketeering.

BACKGROUND: Data from ASECAP, the European toll association show there are 917km (573 miles) of toll expressway in Greece operated by seven concession companies. They operate 67 toll stations or toll plazas with 398 toll lanes of which 154 are electronic toll collection (ETC). There are 508k transponder accounts.

Average daily traffic is 573k of which 49k are heavy trucks, 525k light vehicles. Toll revenues last year were E550m or @1.35 US$743m.

Not much different in extent of tolling from Florida, Pennsylvania, California, or Texas. Not as big as New York or New Jersey, but bigger than Illinois, Ohio, Massachusetts, Virginia.

NOTE: our Greek ain't the greatest, but we're trying to get more detail on this and will post it if we can get it - editor

TOLLROADSnews 2011-02-07

Malkin: PPPs are 'corporate welfare'

Link to article here.

Conservative Michelle Malkin blasts so-called "public private partnerships": "When businesses get in the government handout line, it’s not a 'public-private partnership.' It’s corporate welfare — and it stinks as much under Democrat administrations as it does under Republican ones."

Obama & the U.S. Chamber of Commerce: Bad romance;
Update: Fruitcake and sweet talk; plus: O’s What You Must Do For Me moment

By Michelle Malkin  •  February 7, 2011 05:22 AM

Scroll for speech updates…

“Trust not their presents, nor admit the horse.” — from Virgil’s Aeneid, translated by John Dryden

Today, President Obama will address the U.S. Chamber of Commerce — the very same organization he slandered as a foreign money-funneling operation before the midterm election shellacking just three short months ago.

Desperate to goose up his administration’s abysmal jobs numbers, President Obama is on a public relations quest to create the appearance of “mending fences” and “easing tensions” with the Beltway business lobby — a lobby that should in no way be mistaken for representing the majority of American businesses and entrepreneurs.

I remind you again:

The U.S. Chamber of Commerce is one of the staunchest promoters of amnesty and joined with the AFL-CIO/ACLU to oppose immigration enforcement measures. They oppose E-verify and sued Arizona over its employer sanctions law.

The Chamber supported TARP, the auto bailout, and the stimulus.

The Chamber is supporting a pro-Obamacare, pro-TARP, pro-card check, pro-stimulus, pro-amnesty Democrat in Arizona over his free-market GOP challenger.

 And the Chamber is now playing footsie with the AFL-CIO on a joint campaign to support increased government infrastructure spending — despite the massive Big Labor pay-offs embedded in these new pork-lined projects. (Refresher: Obama signed E.O. 13502, a union-friendly executive order in his first weeks in office, which essentially forces contractors who bid on large-scale public construction projects worth $25 million or more to submit to union representation for its employees. More here.)

While the White House pushes for a bonanza of new “public-private partnerships,” let me refresh your memories of some of the Democrats’ great ideas of “public-private partnerships”…

…taxpayer-funded black hole FANNIE MAE;

…Chicago’s shady Shorebank and its crony-supported successor, Urban Partnership Bank;

…the failed Chicago Olympics wealth distribution boondoggle;

…and the failed Richard Daley/Valerie Jarrett Chicago low-income housing boondoggle.

This isn’t about letting the best ideas and businesses thrive. It’s about picking winners and losers. It’s about “managing” competition and engineering political outcomes under the guise of stimulating the economy. As I noted last April when the command-and-controller-in-chief lectured businesses that “at some point you have made enough money,” we are dealing with a president who presumes to know when you have earned “enough,” who believes that only those who provide what he deems “good” products and services should “keep on making it,” and who has determined that the role of American entrepreneurs is not to pursue their own self-interest, but to fulfill their “core” responsibility as dutiful growers of the collective economy.

What’s in it for the statist businesses that go along for the ride with Obama and his team of corruptocrats?

Like they say in the Windy City: It’s all about the boodle.

In Chicago politics, there’s an old term for the publicly-subsidized pay-offs meted out to the corruptocrats’ friends and special interests: Boodle.

In the age of Obama, “reform” is all about the boodle. So it was with the stimulus. And the massive national service expansion. And the health care bill. And so it is with the financial “reform” bill…In front of the cameras, the Democrats will lambaste the greedy, Wall Street money. Behind the scenes, they’re pocketing Wall Street campaign donations and working out deals.

Goo-goo “reform” has always entailed wealth redistribution under the guise of public service (or “social justice” or “media justice” or “innovation” or whatever the euphemism of the day is). The goodies can take the form of exclusive union-only contracts or p.c. bailouts or waivers for favors.

When businesses get in the government handout line, it’s not a “public-private partnership.”

It’s corporate welfare — and it stinks as much under Democrat administrations as it does under Republican ones.

It goes without saying that American entrepreneurs should be beware of White House business-bashers bearing gifts.

But so, too, should taxpayers beware of Washington business-boosters wearing false free-market facades.


Update: Obama gets a warm welcome at the Chamber. Coos that he strolled over from the White House to the Chamber headquarters “in the interest of being neighborly.” Jokes: “Maybe if we’d have brought over a fruitcake, we’d have gotten off to a better start.”

This from the man who threatened: “If they bring a knife to the fight, we bring a gun.”

After some obligatory sweet talk, Obama launches into his What You Can Do For me lecture, calling on businesses to help America (translation: help Obama’s poll/jobs numbers).

After obligatory talk about reorganizing government for efficiencies, the President says “not all regulations are bad” (translation: his regulations are good) and then defends Obamacare.

After defending job-killing, innovation-strangling, tax-hiking federal health care takeover, Obama then exhorts companies to invest, invest, invest, innovate, invest, invest.

Obama gets applause: “Now is the time to invest in America.”

Translation: Now is the time to line up and lobby me for your handout, waiver, and boodle.

Eminent domain bill on fast track, but doesn't solve Kelo

Link to article here.

Once again, our lawmakers are trying to convince Texans they've protected landowners from Kelo-type eminent domain abuses, where the government takes a person's private property under the pretext of a "public use" then hands it to another private entity for private gain (under the pretext of "economic development"). SB 18 that's being fast-tracked (perhaps in part to prevent public scrutiny and normal debate) does NOTHING to solve Kelo abuses since it still allows a private entity to benefit from the deal as long as these entities can steal your land under the auspices of a "public use," like road projects where TxDOT can condemn your land and hand it over to a private, foreign toll operator, ie - Cintra, for the next 50 years! The bill also fails to protect landowners from either a governmental or private entity taking your land for anything either considers "blight." What the government considers blight is a developer's dream!

Insist on REAL eminent domain reform, not settling for more crumbs. If existing law truly restricts eminent domain by private entities to "public uses" then why does SB 18 also have such a restriction? Wouldn't that be redundant? It's in there because current law doesn't restrict eminent domain to a "public use," and it appears in this bill so as to bring in yet new loophole (Texas Public Policy Foundation cites one of them below) in the name of "reform." Call your lawmakers today and demand GENUINE protection from Kelo!

Fast-tracked Texas bill would empower homeowners against eminent domain

Posted Sunday, Feb. 06, 2011

By Dave Montgomery

This email address is being protected from spambots. You need JavaScript enabled to view it.

AUSTIN -- After years of conflict, the Texas Legislature could be heading toward a long-sought resolution on property rights with a carefully stitched compromise supported by Gov. Rick Perry, key lawmakers and major interest groups.

The eminent domain measure -- which strengthens protections for property owners -- is expected to be considered by the state Senate as early as Tuesday. Passage seems virtually certain since more than two-thirds of the chamber's 31 members have signed on as co-authors.

Perry put the legislation on a fast track by declaring it an emergency item that lawmakers are required to consider during the session's first 60 days. Sen. Craig Estes, R-Wichita Falls, is chief author of the Senate bill, SB18, and Rep. Charlie Geren, R-Fort Worth, is author of the House bill, HB279.

Proponents have fashioned a delicate coalition from a broad range of interest groups, some of whom were once on opposing sides. The Texas Farm Bureau is enthusiastically backing the measure. Other interest groups, such as pipelines and cities, harbor concerns about the bill but say they are at least begrudgingly on board, recognizing that it's probably the best deal they can get.
"Every word in there has been carefully crafted," said Estes, whose district includes Parker, Wise, and parts of Denton and Collin counties. "Nobody is 100 percent happy, which means it's a pretty good bill."

Accordingly, Estes said he will fight any amendment to ward off even the slightest change that could unravel the compromise.

"I don't care if your amendment turns lead into gold. It's not going to happen if I can help it," Estes said. "Any bill can be made better, but when you have all the major interest groups on board, let's don't let perfection get in the way of something that's good for Texas."

Tarrant co-sponsors

Estes' bipartisan roster of Senate co-authors includes all three senators who represent parts of Tarrant County -- Jane Nelson, R-Flower Mound; Chris Harris, R-Arlington; and Wendy Davis, D-Fort Worth. Harris said he has been working with Estes on the bill for four years "and I am ready for it to finally become law."

The timetable in the House won't be determined until after Speaker Joe Straus appoints committees -- possibly this week -- but Geren predicts that the measure "has a very good chance" at passage.

"This bill provides protection for Texas landowners, and there are a lot of people that will support that protection," Geren said.

The legislation is virtually identical to an earlier bill by Estes that passed the Senate 31-0 in 2009 but died in the House in the session's closing days. Perry's emergency declaration is designed to get it through the Legislature early enough to avoid a replay of 2009, supporters say.

Under eminent domain, government entities and certain legally authorized private entities such as pipeline companies, railroads and utilities are empowered to acquire property for public use after fairly compensating the owners. Some say Texas has hundreds, perhaps thousands, of condemning entities.

If the property owner and entity fail to agree on a price, the entity can file suit to condemn -- acquire -- the property. But the property owner first has the right to a hearing before a three-member commission that determines the amount of compensation. If property owners are dissatisfied with the award, they have a right to a trial before a judge or jury and can appeal.

Eminent domain has stoked disputes over property rights and government power since the founding of the Republic. In Texas, modern-day property-rights battles have been evident in disputes over pipelines in the Barnett Shale and in Perry's now-dead Trans-Texas Corridor project, which encroached on a half-million acres of farmland.

Perry came under fire from property-rights advocates in 2006 for vetoing an eminent domain bill that he said went too far in expanding property owner damages, creating what he said was "a financial windfall for condemnation lawyers" at taxpayers' expense.

Perry's two principal opponents in his race for re-election last year -- Republican Kay Bailey Hutchison and Democrat Bill White -- also accused Perry of trampling on property rights by pushing the Trans-Texas Corridor, which would have created a multibillion-dollar network of toll roads and highways.

On the fast track

But Perry has seemingly pushed past much of the criticism with strong property-rights messages during the past two sessions, including his pledge to fast-track legislation this year. The 450,000-member Texas Farm Bureau, which endorsed Hutchison over Perry in the Republican primary -- partly because of bitterness over the Trans-Texas Corridor -- now praises Perry for his commitment to the Estes-Geren legislation.

The legislation is the state's latest response to the U.S. Supreme Court's decision in Kelo v. City of New London in 2005, which permitted the use of eminent domain for economic development. A 2007 law and a state constitutional amendment passed by Texas voters in 2009 restricted eminent domain acquisitions to only those involving public use. But property-rights advocates say those measures went only so far in protecting landowners.

"We would like to set the bar a little higher," Estes said. "In my opinion, the deck is stacked against the property owner."

The bill lays out procedures that supporters say levels a playing field that has been tilted toward acquiring entities. One key provision would enable landowners to buy back property if it isn't used for the intended public purpose in 10 years, although the Texas Public Policy Foundation says the provision contains loopholes that could still allow condemning entities to hold on to the property.

Wallace: Privatization myth sold as truth

Link to article here.

Myth Sold as Truth: Privatization

Posted Friday, Feb. 04, 2011

By Ed Wallace

Special to the Star-Telegram

"There is little doubt [Morgan Stanley Infrastructures Partners] will recoup their investment in a relatively short period of time." - Investment Banker Dennis Enright, discussing the privatization of Chicago's parking meters in the New York Times

The public is so deluged with Big Myths that it's almost impossible to deal with all of them - much less disprove the untruths they're built on. That's probably the idea. These Big Myth premises, successfully foisted onto a gullible public incapable of critical thinking, serve only to enlarge the wealth of those spreading the disinformation.

Privatization of publicly owned assets, sold to us wrapped in the shiny myth that "private companies can always do the job better than inefficient governments" is one of the most effective sales job. It is quickly altering the lives and draining the pocketbooks of all Americans.

First, maybe it's true that private industry is more efficient at some things than government is. But it is equally true that these companies are not buying public assets for anything as altruistic as lowering the costs of using these assets for the public good. They have little incentive to provide more efficient services; the reason they buy the assets that we all paid for is a simple investment/profit motive. Once the new owners control the asset, their only mission statement reads, "To maximize investors' return on their investment."

Your Taxes at Work-In India

This really struck home a week ago. ABC News did a story about Florida's privatizing its food stamp operations to J.P Morgan - which in turn contracted a call center in India to process the claims. Imagine that. Florida gives taxpayers' money to J.P. Morgan, which to make a greater profit uses that money to hire people in India, putting Floridians out of a job. Then out-of-work Floridians have to call India to get approved for food stamps. Now that's ironic.

The best place to see how privatization really affects average Americans may be in Chicago. Like many cities, Chicago has had a hard time living within its budgetary means, even while collecting one of America's highest city sales taxes: 10.25 percent. So two years ago Chicago decided to sell the city's parking meters.

According to Associated Content, William Blair is a close associate of Chicago Mayor Richard Daley. Selling off the city's 36,000 parking meters to a private investment group was his idea, but Blair also was instrumental in getting Daley to sell off the city-owned downtown parking garages back in 2006. And for his clever suggestions for taking revenue-producing, publicly owned assets and privatizing them (and for being a member of Daley's Kitchen Cabinet), Blair has received payments totaling $6.5 million.

Analysis After the Sale

Morgan Stanley eventually took majority ownership of the city's parking meters for 75 years, in exchange for a one-time payment to Chicago of just under $1.2 billion. According to Chicago Sun Times political columnist Carol Marin, almost immediately the cost of using a parking meter inside the Loop jumped to 28 quarters ($7) for a two-hour period.

But quickly increasing the cost of parking wasn't the only pain inflicted by the new owners. Many parking meters couldn't handle that much loose change in one day, and once full the meters would accept no more change; anyone who parked by one was doing so illegally. Yes, the number of parking tickets jumped so much they had to stop writing them while new meters that would accept credit cards were installed. Even more interesting is that LAZ Parking - also owned by Morgan Stanley - was responsible for collecting the coins out of the meters and issuing the parking tickets.

The meters were set to demand payment 24 hours a day and seven days a week, ending the free parking that enticed many families to downtown Chicago on Sundays.

Chicago's Inspector General analyzed the deal only after it was done; and on June 1, 2009, his report on the sale said officially that Chicago had gotten the short end of the stick. The report faulted William Blair's calculations of the 36,000 parking meters' present and future value: they were worth not a mere $1.2 billion, but more in the neighborhood of $2 billion. Seems Blair wrote the entire report from the investors' perspective, not from that of the real owners, the people of Chicago. The Inspector General concluded that the entire deal was "dubious."

It should be noted that Daley's friend Blair wasn't the only one who profited by suggesting and promoting this deal. The Mayor's former spokeswoman, Avis LaVelle, emerged from it with a new job - spokeswoman for Morgan Stanley's parking meter entity.

The Modern Highwaymen

By November the New York Times had shown the deal to numerous financial experts, who unanimously said, "Chicago could have made out much better in the long run had it just kept the meters."

Here's the net effect of that sale. Parking meter rates have quadrupled, and that was just in the first year after the sale went through. The lease still has 74 years to run. Chicago drivers are (and their great-grandkids will be) paying through the nose for the sins of those voters elected to govern the city's finances wisely.

Meanwhile, just a few miles away in Indiana, the state's major toll road was privatized a few years back. According to The Times of Northwest Indiana, "A combination of toll increases ... have [sic] marked the Toll Road's first three and a half years under private operation." That comment came out of a column published a year ago, reminding readers that tolls would increase by another 8.2 percent last summer. The rationale? The recession lowered the number of drivers using the toll road, so keeping profits constant meant that everyone still using it had to pay more.

And when summer came, it brought another surprise for the users of the Indiana Toll Road: a lawsuit against its new owner, ITR Concession, brought by a woman whose accident she blamed on their highway's poorly maintained condition.

The merits of her lawsuit notwithstanding, it's interesting that ITR Concession tried to get the lawsuit thrown out under the legal concept of government immunity from such legal actions. Really. A private, for-profit company buys up a publicly owned highway and then wants the same protection against lawsuits that government enjoys.

Principles vs. Profiteering

When Charlie Wilson left his job as head of General Motors in the early 50s to become our Secretary of Defense in the Eisenhower Cabinet, he had to divest of his stock in GM over conflict of interest rules. It cost Wilson over a million dollars in tax liabilities to accept the President's offer. But Wilson, like so many other wealthy Americans in those days doing public service after a long and successful business career, paid the price willingly.

Wilson said that America had been so good to him that giving back to the country that gave him everything was the right thing to do, including service to the country as a public servant. The long and impressive list of car men in this country who did the same thing for the betterment of America includes men like Big Bill Knudsen. He too lost millions when he left GM to run our weapons procurement during World War II.

Yet, in the early 70s - just two decades after Charlie Wilson forfeited millions to do public service at the end of his career - the system changed and no one noticed. Suddenly everyone was doing their so-called public service early in their careers, then jumping ship to private industry and making the big bucks because they were "government connected."

For example, look at the political career of Donald Rumsfeld in the 70s. After he left government he made a fortune in private industry because of his political connections, then returned to Washington. Open Secrets put his 2004 net worth at between $64 and $210 million. Being White House Chief of Staff in the Ford Administration just didn't pay that kind of money.

Government as a Business Piggybank

So, if you wonder why we pay so much for electricity, or why so many toll roads are now being built, or why no one in authority can put sanity back into the commodities markets - leaving us to pay far more for food and energy than market conditions justify - it's not just the Democrats' or the Republicans' fault. And it's not because we don't pay enough in taxes to offset our deficits.

It's because the political system now is geared toward insiders' using their influence to take over government's duties and responsibilities (parking meters, highways or even basic legislation) for their own or their clients' financial gain.

The reason so many publicly owned assets are being sold is not that private industry is more efficient than government. It's because repeating that Big Myth is a sure fire way to get the public to sign off on deals that any intelligent person can see don't serve citizens' long-term economic interest. In fact, typically it only takes months for the taxpayer to realize just how costly these deals will be.

Then again, we're a long way from the days of Ike and businessmen who felt it was their duty to serve our country. But they made their fortunes first, and often gave a great deal of it back in order to serve the country they loved so much.

© 2010 Ed Wallace

Ed Wallace has received the Gerald R. Loeb Award for business journalism, given by the Anderson School of Business at UCLA, and is a member of the American Historical Association. He reviews new cars every Friday morning at 7:15 on Fox Four's Good Day, frequently contributes articles to BusinessWeek Online and hosts the top-rated talk show, Wheels, 8:00 to 1:00 Saturdays on 570 KLIF. E-mail: This email address is being protected from spambots. You need JavaScript enabled to view it.; access all of Ed's work at his Web site,

WSJ: PPPs faster, but cost more

Link to article here.

Public-Private Road Projects Are Faster but Exceed Budgets by More
December 22, 2010, 6:17 PM
Wall Street Journal

According to a yet-to-be published study, which looked at delays and cost over-runs in public-private highway projects, when the private sector gets involved, roads are ready sooner but costs escalate more frequently.

In projects that exceeded initial spending estimates, costs escalated by 21% where there was private participation compared to 6%  for projects carried out by the government alone.

The findings come from a follow-up research conducted by Delhi School of Economics associate professor Ram Singh, whose earlier work on infrastructure delays we wrote about in May.

In the previous study, Mr. Singh looked at data on around 900 projects from 17 infrastructure areas, including power, roads and railways. He found that all together, these projects experienced cost increases that amounted to 54% of the total initial budget for these works. One reason for delays and cost over-runs: “contractual incompleteness.”
This paper looked more closely at roads and railways projects, and also compared the performance of 50 highways built with private participation to 145 built without it.

A similar percentage of both types of highway projects saw time over-runs—about three-fourths of them. But public-private projects required comparatively less additional time, exceeding the initial estimate by 17% rather than 49% on average.

Mr. Singh said the reason private contractors get projects to completion faster is probably very simple: The contracts for these projects are often structured so that contractors won’t begin earning toll or annuity revenue till the project are up and running.

“It incentivizes the contractor to avoid delays,” he said.

But costs for public-private highway projects were more likely to come in higher than estimated. This applied to roughly three quarters of such projects, compared to 55% of regular, government-run projects.

For projects with cost over-runs, additional costs amounted to 21% of the initially estimated cost for private participation projects, versus 6% for the public ones.

However, the cost over-runs in the private projects are not necessarily negative, said Mr. Singh. He believes the use of better quality materials could be one of the factors driving up costs, at least for projects where the private contractor is responsible for both construction and maintenance.

“It makes better sense to provide better quality roads” to reduce the frequency of repairs which they would have to pay for themselves, he said. “It will disrupt traffic flow and revenue flows so they want to minimize that. In a public road, if you are a contractor you provide the minimum acceptable quality. Maintenance costs are not your headache.”

Mr. Singh said government audit reports appeared to back this hypothesis, noting more quality problems in public projects than in public-private ones. But he said he plans to carry out further research to assess what other factors could also be driving up costs.

Copyright 2008 Dow Jones & Company, Inc. All Rights Reserved

Editorial: Privatization scheme props up big government

Link to article here.

Again, the Washington Times gets it. One of the few conservative media outlets that does.The rest are still swimming in the Reason Foundation Cato Institute Kool-Aid of privatization talking points that don't mirror reality.

This Editorial Board is connecting the dots and discovering that the so-called "privatization" of our public infrastructure is nothing more than a taxpayer rip-off and a big government SCAM! They involve massive public subsidies and grant monopolies over things we need for daily living -- ie, ROADS! Click here to read their other excellent editorial last year on the failed San Diego toll road PPP.

EDITORIAL: Nickel, diming and quartering the public

Windy City privatization scheme props up big government


6:37 p.m., Tuesday, January 18, 2011

It's not often that prominent rivals for public office find themselves in full agreement on a contentious policy issue. Yet those hoping to take the reins of Chicago's political machine in elections next month - including former White House Chief of Staff Rahm Emanuel - are eager to distance themselves from an infrastructure privatization deal dreamed up by outgoing Democratic kingpin Richard M. Daley. The longtime mayor's scheme has proved to be a nightmare.

Nothing better exemplifies the "live for today" attitude adopted by state and local government officials than the resurgence of so-called "public-private partnerships," where jurisdictions sell or lease assets in return for a pile of cash. From the Windy City to the Old Dominion, political leaders are proving all too willing to sell their constituents down the river for this short-term gain.

That's what happened in December 2008 when Mr. Daley, with essentially no public notice, rammed through a 75-year agreement leasing his city's parking meters to a group owned by Morgan Stanley in return for a $1.2 billion up-front payment. The deal allows Morgan Stanley to pocket every quarter popped into a Chicago meter between now and the year 2083. Though Mr. Daley touted the long-term benefits of this financial windfall, that money has dried up.

Instead of repairing roads and building bridges, more than a billion has already been spent patching holes in the municipal budget. The next mayor will only have a few million left to spend from the lease proceeds. Instead of making the hard choices required to align revenue with expenses, Mr. Daley was able to avoid all the hard choices and even boost 2011 spending by $49 million. That meant Mr. Daley could leave office without angering any special interests with cuts that many of his colleagues have been forced to make.

If only the public could escape similarly unscathed. Chicago residents looking to catch a movie downtown better have reinforced pockets, as the meters now require a half-pound stack of 40 quarters to park. This already sky-high rate is set to increase on a regular, unending schedule. Candidates looking to replace Mr. Daley as burgomaster have heard the local ire and strongly oppose the lease - now that it's too late to do anything about it. Former Sen. Carol Moseley Braun, Illinois Democrat, wants to break the contract and hope the court agrees with her that the deal was a "rip-off" and not enforceable. Mr. Emanuel said he has a "problem" with the meter deal.

Some conservatives are eager to embrace any project carrying the label of "privatization" or "public-private partnership," even when pushed by a Democratic big-city mayor. The reality is that many of these ideas turn out to be nothing more than the outsourcing of tax increases to a private firm. In this case, Chicago residents could end up paying $9 billion in private meter fees in return for the billion dollars Mr. Daley spent by the end of his term in office. If voters don't force change at the ballot box, they won't have any change left in their pockets.

Panel blasts private toll contract as 'sweetheart deal'

Link to article here.

California Legislative Analyst Blasts Public Private Partnership
Doyle Drive reconstruction plan blasted as a sweetheart deal for private contractors.

Doyle DriveThe California legislature's Legislative Analyst's Office (LAO) blasted a public-private partnership deal between the California Department of Transportation (Caltrans) and investors for the development of Doyle Drive. The plan was to give a private company, Golden Link, a 30-year lease on this vital southern route to the Golden Gate Bridge to perform needed renovation to the route. The state would pay the consortium $173 million for finishing the road, followed by $28.5 million in "availability payments" each year the road is open.

"Overall, our analysis finds that the Golden Link agreement does not meet all the goals Caltrans intended and is not likely to be a good fiscal deal for the state," Legislative Analyst Mac Taylor wrote. "In light of these findings, we think that the state should consider not signing the contract with Golden Link, and instead build the project with a more traditional approach."

The total cost of the project is estimated at $594 million on the partnership model, while traditional methods would cost around $490 million -- not counting a number of potential cost overruns on the riskier partnership model. In terms of bearing risks, the deal put state taxpayers on the hook if any discoveries of endangered species threatens roadside construction. It offered no guarantee that the companies undertaking the project would finish on time. Because the interest rates that will apply are not yet known, the analyst was unable to estimate the final cost with more certainty.

"Based upon our own analysis, we disagree with Caltrans' conclusion that the agreement results in a lower lifecycle cost," Taylor wrote. "As described in detail in another section below, we have concluded that a traditional design-bid-build procurement would be less expensive in this particular case than under the Golden Link agreement."

The analyst recommended dropping the public-private partnership contract. A copy of the letter is available as a 450k PDF at the source link below.

Source: Public Private Partnership letter (Office of the Legislative Analyst, 12/22/2010)

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