Latest News :: Texas TURF

Forbes: Toll roads prohibit China from benefiting from its highway system

Link to article here.

The Cost Of Driving In China
Toll roads prohibit the nation from enjoying the economic benefits of its vast highway network.
Paul Midler 04.20.10
Forbes.com

HONG KONG - China will spend $300 billion on high-speed rail lines over the next 20 years. The world has seen nothing like it, and China-watchers have responded by drawing analogies to America's transcontinental railroad, built in the 19th century, or its interstate highway system, built and expanded throughout the 1950s and 1960s.

High-speed rail is not the only thing on the nation's infrastructure to-do list. China's General Administration of Civil Aviation has budgeted $62 billion to build 100 new airports by 2020. All of this new infrastructure is being seen as the signs of progress, but what has been missed is how high-speed rail and the new airports are a way for China to get around a major problem it faces--an exorbitant, toll-based road system.

Have a mind to jump in your car and drive from Guangzhou to Beijing? Don't forget to bring your wallet. The expressways connecting the south to Beijing are expensive, and a trip to the nation's capital will run you close to $200 each way. Driving on toll roads in China--and almost all of the country's expressways cost money--runs an average of 0.5 yuan (7 cents) per kilometer, or nearly 12 cents per mile. For many types of cars, the tolls are greater than the cost of the fuel burned.
The jacked-up cost of auto travel in China actually makes high-speed rail seem affordable, but tickets for high-speed trains are still out of reach for most Chinese. The speedy rail line meant to connect Beijing to the southern province of Fujian was closed after only two months in operation due to a lack of commercial interest.

Other problems with China's high-speed rail include poor planning. The high-speed rail lines connect only two, sometimes three, major cities. The tracks do not cover the country well; they will not necessarily take folks to where they want to go. They are by no means linked into a network, and already people are complaining that the rail stations do not connect properly to mass transit systems. For many who choose to take existing high-speed rail lines, it can take longer to get to the rail station than it does to ride the train from Point A to Point B.

Transportation infrastructure in China is a curious phenomenon. One of the observations made by New Yorker writer Peter Hessler in his travel book Country Driving is that while China's expressways are clean and well-maintained, they are by and large empty. You can ride down many highways and find your car the only one in sight. What an odd contradiction for an economy said to be the world's largest auto market!

Like it or not, the long-term potential of major auto companies in China--including Ford, Volkswagen, Honda and Toyota--is going to be affected by how the country deals with the high economic barrier posed by road tolls.

Japan is in the process of doing away with toll roads, which today account for 18% of its highway network (excluding the Tokyo Metropolitan and Hanshin Expressways). Japan's Democratic Party pledged to give back thousands of kilometers of fee-based expressways as a political gesture, but the net effect will likely be to lift the economy ever so slightly.

China privatized its expressways as a way of quickly establishing an extensive network. While that was great for the short term, the policy decision means that the highway system may never belong to the public, that it will for some time represent corruption of some kind.

For all the latest headlines visit Forbes Asia.

Chinese leaders have no difficulty tearing down entire villages for the sake of a new high-speed rail line, but getting local and other stakeholders to agree on reforming the expressway system will be an enormous challenge in the not-too-distant future.

Infrastructure is critically important to an economy; transportation is the cornerstone of commerce. A nation whose citizens move around unencumbered is better able to grow and do more business.

China's auto market is seen as an attractive long-term prospect for investors, but the Chinese continue to view automobiles more as status symbols than as means of conveyance. To get folks rolling down these roads, China will have to consider investing heavily in a different kind of "infrastructure"--the reduction of costs associated with auto travel.

Paul Midler is the author of the book Poorly Made in China: An Insider's Account of the Tactics Behind China's Production Game.

For all the latest headlines visit Forbes Asia.

Over 300 properties to be condemned for 290E toll project

Link to article here.

For anyone who still thinks toll roads don't impact private property rights, think again. Here's proof positive that an unnecessarily wide road expansion comes into play whenever TxDOT plans to toll existing roads. It must leave as many non-toll lanes as exist before the reconstruction. So most toll roads being done in Texas today require much larger footprints than would otherwise be necessary. Also, these toll lanes are largely underutilized (for "managed lane" projects only about 8% of the traffic can afford to pay the extra tax to access the new lanes). So this is a BIG price to pay for a project that won't even provide congestion relief for the vast majority of commuters.

TXDOT wants 366 properties to widen 290 corridor
Public comment sought
Jay Blazek Crossley, Apr 16, 10.
Houston Tomorrow

The Texas Department of Transportation (TXDOT) has released the Final Environmental Impact Statement (FEIS) for a proposed project to add traffic lanes to the 290 corridor and fix the 610 / 290 / I-10 interchange.

Four of the additional lanes would be part of a new managed lane facility along the existing Hempstead Highway that would have variable toll pricing for private vehicles as well as HOV and METRO use, replacing the existing HOV lanes in the middle of 290.

The project identifies and preserves land for future transit use, but does not include implementation or specifics on technology or potential stops for transit. Construction could begin in 2011 and the total expected cost of the project is $4.65 billion.
The public now has the opportunity to comment on this proposed project.

The FEIS Notice of Availability Press Release states that TXDOT expected for the notice to appear in the Federal Register on April 16, 2010. The Notice of Availability states “The FEIS wait period ends May 17, 2010. Comments regarding the FEIS should be submitted to the Director of Project Development at the Texas Department of Transportation’s Houston District Office located at 7600 Washington Avenue, Houston, Texas prior to 5:00 p.m. on May 17, 2010. The Texas Department of Transportation’s mailing address is P.O. Box 1386, Houston, Texas, 77251-1386.”

TXDOT states that the project will require the use of eminent domain to take 366 properties to acquire right-of-way, including two churches: Celebration Lutheran Church at 15815 House Hahl Road and Christian Family Church at 14406 Hempstead Road (no apparent website). Appendix D of the FEIS identifies churches, community groups, and civic associations in the area that were contacted and provided information to publish to their constituents on the proposed project. Neither of the churches proposed for eminent domain appear on the list.The proposed eminent domain needs will include 360 residences, including both single and multi-family, and 392 businesses, some of which are listed as multiple businesses on one property.

The Indirect and Cumulative Impacts section of the FEIS states that 413 acres of prime farmland would be converted directly for ROW use, although that information does not appear on Form NRCS-CPA-106, Farmland Conversion Impact Rating for Corridor Type Projects. This form is presented as Appendix A, although it appears incomplete. This form is a consequence of the Farmland Protection Policy Act, which seeks to avoid adverse impacts on American farmlands as a consequence of federal programs, including road projects funded by the Federal Highway Administration. The FEIS does not appear to give an estimate of the amount of prime farmland that will be lost as a result of indirect impacts of the road project, however it states that TXDOT expects that 5,000 to 7,500 acres of additional development will occur in the study area as a result of induced demand from increased lane capacity in the corridor.

TXDOT explains that induced development does not occur because increased highway capacity brings new development to the Houston region, but instead that TXDOT’s decision will allocate development to this area of the region as opposed to other areas. Referring to a study by the Urban Land Institute, the FEIS notes in section 6.1.2 that “Regional development is primarily driven by regional economics and the major effect of highways is the distribution of development within a region. (FHWA 2004a; Cervero 2003; Hartgen 2003a and 2003b).” TXDOT notes that the study area currently houses 184,000 acres of undeveloped land, approximately 130,000 acres that is used for pasture and farming, 14,000 of which is cultivated farmland.

TXDOT describes the area surrounding 290 as such: “The transportation network is discontinuous with self-contained, isolated developments with very little interconnectivity of the roadway network.” The proposed addition of freeway lanes will not address this issue. TXDOT instead states that the City of Houston Mayor Thoroughfare and Freeway Plan will be used at a later time to add major thoroughfares “to be designed and built as development occurs.” TXDOT continues: “Thoroughfares are built as development happens, leaving gaps between communities. Bikeways and sidewalks are discontinuous, existing only as part of individual residential developments or isolated public projects along bayous or parks.”

TXDOT summarizes the major changes between the Draft Environmental Impact Statement and the FEIS as such:

The Preferred alternative has the same general configuration as the Recommended alternative, with some changes in the number of proposed main lanes on US 290: 12 lanes from West 34th Street to Pinemont Drive (revised from 10 lanes), 12 lanes from FM 529 to Eldridge Parkway (revised from 10 lanes), and 10 lanes from Eldridge Parkway to Telge Road (revised from eight lanes). Some direct connector and access ramp modifications were also revised. The other major change in the Preferred alternative is the relocation of the transit reserve from north of the managed lanes along Hempstead Road to between the managed lanes and the UP railroad from IH 610 to BW 8.

The stated purposes of the US 290 Corridor projects are:

Reduce congestion in the US 290 corridor within Harris County,
Improve LOS and mobility on US 290 and Hempstead Road,
Bring the roadway facilities up to current design standards, and
Improve safety in the US 290 Corridor.

Main My290 project website
Full US 290 FEIS Report (link is to a webpage with a series of pdf’s)
Executive Summary
Section 6 – Indirect and Cumulative Impacts
Appendix A – Farmland Conversion Impact Rating for Corridor Type Projects
Section 1 – Need for and Purpose of Proposed Action
Public Comment and Response Report (This document includes written responses to the DEIS, transcripts from public meetings, and an attempt by TXDOT to respond to every issue raised in a manner that groups public comments into a series of questions)

Image credit: deltaMike

PA State Auditor blasts Turnpike Authority for "gambling" with taxpayer money

Link to article here.

Remember this is written by a toll road industry advocate, so the tone is pro-toll. It's enlightening as to the financial chicanery being played with taxpayer money regarding interest rate swapping and other tricks with public debt that are not only risky, they're downright malfeasance!

State auditor hits Penn Pike for "gambling" with $2.23 billion in interest rate swaps
Toll Road News
Posted on Fri, 2010-04-09

The state auditor-general in Pennsylvania, Jack Wagner has criticized the Turnpike for "gambling" with $2.23 billion variable interest rate debt tied to 26 different interest rate swaps. He said his office calculated the cost to terminate the swaps could be $146m - the equivalent of around three months toll revenues.

Wagner wrote in a letter to Turnpike CEO Joe Brimmeier: "Swaps are tantamount to gambling with taxpayer money and they have no place in the public sector. With drivers already paying higher tolls mandated under Act 44, the Turnpike Commission must do all that it can to show Pennsylvanians that it is handling money wisely."

In his letter to Brimmeier, Wagner urged the Turnpike Commission to:

- stop using swaps,

- conduct a financial assessment to determine the financial impact of its swaps, and

- hire financial advisers through a competitive selection process.

He asked Brimmeier to provide more detailed information about the Turnpike Commission’s swaps giving a deadline of April 19.

Wagner is quoted: "The fundamental guiding principle in handling public funds is that they should never be exposed to the risk of financial loss. Swaps have no place in public financing and should be banned immediately."

Carl de Febo spokesman at the Turnpike said the commission is "reviewing that correspondence, and we have no comment at the moment."

Wagner is a candidate for the Democrat Party's nominee in the state governor election this November, since the incumbent governor Ed Rendell is term-limited out.

Populist politics?

Critics of Wagner will say he's engaging in populist politics and pandering to people's prejudice against complex financing instruments. Economists argue that all borrowing is risky. It is, they say, a gamble because future revenue streams to pay the interest and repay capital are uncertain, and because prevailing interest rates are unpredictable.

Interest rate swaps can - at a price - reduce the risk of interest rate volatility and such 'hedging' will make variable interest borrowing less of a gamble. Properly used they can be an insurance against big increases in interest rates on variable interest debt or on refinancing debt as debt matures.

To prohibit public authorities from hedging, they will say, could increase the "gamble" they take when they borrow - like prohibiting insurance.

But interest rate swaps that shielded borrowers in the boom turned out to be big lossmakers in the great financial crisis from 2008 on. Engineered to protect against rises in interest rates they turned into major lossmakers when interest rates plunged.

Carelessness and fraud

And many theoretically defensible swaps and auction rate securities seem to have been carelessly written, some were fraudulent. In addition many contracts just fell apart when the bond insurers lost their required credit rating. That risk had not been properly explained or considered.

Brian Chase an investment consultant and former Nossaman and Carlyle Group staffer says: "Frequently, we have seen that the public sector does not in fact understand the financial risks it has taken through its use of interest-rate swaps and auction-rate securities."

Elaine Greenberg, top SEC official in Pennsylvania, has said there is widespread pay-to-play corruption and bid fixes in bond underwriting and derivatives transactions in that state.

Small cliques seem to get the great bulk of the profitable work of underwriting and legal and financial advice.

Size of debt may be biggest issue

But the biggest question of all may lie not in hedging via interest rate swaps but in the absolute size of the Turnpike's borrowing relative to its income stream and its obligations.

How sound is the basis for the Turnpike's huge borrowing - $6.11 billion at end December last year? Can the Turnpike realistically deliver on the fixed Act 44 obligations it has assumed to support unpriced and loss-making transportation elsewhere in the state?

Public authorities held to lower standard of liability disclosure

Greenberg of the SEC told Business Week recently that public authorities like the Turnpike have not been required to fully disclose the liabilities they are taking on nearly as fully as investor owned companies.

So while they provide sexy subject matter for gubernatorial campaigning the interest rate swaps may turn out to be a trivial side issue compared to the fundamental question of whether the borrowing of these many billions is justified. Some say it isn't clear that the proceeds of the borrowings been productively invested to generate cash flows five and ten years off to service that huge debt.

TOLLROADSnews 2010-04-09

Tea Parties bring critical mass to fiscal issues

TURF speaks to Dallas Tea Party
By Terri Hall
Examiner.com
April 19, 2010

Though much maligned in the press, the Tea Party movement has the potential to bring much-needed attention to a host of fiscal issues that, if left unchecked, threaten to bankrupt the country. I was invited to speak at the Dallas Tea Party event at Quick Trip Stadium in Grand Prairie for its April 15th Tax Day anniversary, along with national talk radio host Mike Gallagher and Dallas talk radio hosts Chris Krok and Jeff Bolton. Fourteen-thousand concerned citizens from all walks of life, many political stripes, and of all colors gathered to express their concerns with a host of fiscal issues from government spending to unsustainable debt across a broad range of policies.

TURF Founder, Terri Hall, with national radio talk show host Mike
Gallagher

The new version of toll roads using "innovative financing" relies on heaps of multi-leveraged public debt (the same risky financial schemes that brought us the mortgage crisis and bailout era) and has caused our infrastructure to teeter on the edge of insolvency. Many in the DFW area heard for the first time about this new-fangled version of toll roads (totally different than the traditional turnpikes that have been in North Texas for decades) that co-mingle public and private funds and ultimately sells America's public infrastructure to the highest bidder on Wall Street in order to generate quick cash for government. Think of it as a government bailout as a result of decades of out of control spending and a lack of properly funding legitimate priorities like public infrastructure.

Hall - Tea Party.JPGThe crowd response was nothing short of amazing with shouts of "who's responsible for this?" and "what a rip-off," along with other sentiments of fiscal disgust. North Texas is under an all-out toll road assault, with virtually every new lane slated to be tolled and close to 600 miles of planned toll lanes. All three of the current public private partnership (PPP) contracts that will sell our roads to foreign companies are in North Texas: the DFW Connector, North Tarrant Express/I-820, and LBJ/I-635. These deals will charge extremely high tolls, 75 cents PER MILE, which is like paying $17 more for every gallon of gas you buy, just to use a single road! Hall with Dallas radio talk show host Jeff Bolton

PPP contracts essentially give private corporations the power to levy taxes and it's also opened the door to eminent domain abuse for private gain. PPPs are yet another example of socializing the losses and privatizing the profits that awakened the sleeping giant in the first place. Your average Joe is not gonna tolerate being taken to the cleaners for government irresponsibility nor for private gluttony.

With DFW and Houston comprising the largest population centers, their grassroots involvement on toll tax issues are critical to halting toll road proliferation and returning to sensible, affordable, and sustainable transportation policy in Texas. Clearly our elected officials have ignored the public outcry against tolls in Austin and San Antonio for years. But with the rise of the Tea Parties and the newly awakened electorate they represent, a massive, organized coalition can now be mounted against runaway toll taxation.

Fasten your seat belts, we're in for a wild ride in the next legislative session!

Read the complete text of TURF's Dallas Tea Party speech here.

Perry breaks state law, fails to report stimulus money

Link to article here.

Perry accepted $2 billion in stimulus money for road projects, 70% of which was slated to go to toll projects in a massive TRIPLE TAX scheme (gas tax, federal taxes to pay for stimulus, then another toll tax to use the road). It's inexplicable that anyone would call this man a "fiscal conservative."

Perry ducked state law on disclosing some stimulus money
Spending report was not posted on Web site as required.
By Laylan Copelin
AMERICAN-STATESMAN STAFF
Published: 9:39 p.m. Tuesday, April 13, 2010

Gov. Rick Perry has always publicly stiff-armed federal stimulus dollars, even as he accepted billions to balance the state budget and tens of millions that he could award to constituents.

He even ignored state law and his own executive order that require all state agencies and institutions of higher education to be "accountable and transparent" by posting their stimulus spending reports on their Web sites.

Until Tuesday, that is.

After a reporter's inquiry, the Governor's Criminal Justice Division began posting reports, some of them months old, on its Web site. Perry's spokeswoman, Katherine Cesinger, would not elaborate on why the governor chose not to follow the law that he expected other state officials to follow.
State Rep. Jim Dunnam, D-Waco , who leads the House committee overseeing federal stimulus programs in Texas, said Tuesday that he isn't surprised by the governor's actions.

"Unfortunately, it's a pattern of the governor publicly distancing himself from the federal stimulus while accepting the majority of the money," Dunnam said. "They took $16 billion, and most Texans think they haven't taken any of it."

Last year, Perry accepted about $16 billion in federal stimulus money so lawmakers could avoid deep budget cuts or tax increases. But he refused to accept smaller amounts for unemployment benefits and education programs, saying that money came with "strings attached," an argument his critics rejected.

Perry's failure to file reports on the governor's Web site involves only the money administered directly through his office.

The governor's office has received about $92.2 million of the $110 million it requested from the federal government for law enforcement purposes. About $81 million has been obligated and $6.8 million disbursed, according to the Comptroller of Public Accounts, which maintains weekly reports of the state's stimulus activities.

Perry's office submitted the weekly summaries with totals, but Texans looking for greater detail were directed from the weekly report back to the governor's Web site to find a report from 2006 — three years before the stimulus program existed.

Citizens looking for spending details would have had to navigate the federal site,

recovery.gov, where all agencies, including the Texas governor, must post reports.

The Legislature demanded more disclosure than posting to the federal site. The appropriations act requires each state agency and higher education institution to post stimulus reports on their state Web sites for easier public access.

In his Aug. 25 executive order, Perry cited those requirements when he directed state officials "to maintain transparency and accountability in all cases." He also required every agency to designate a representative "to maintain a flow of current information relating to the receipt, deployment, management and use of funds received by the state and any of its political subdivisions or contractors" under the stimulus program.

The governor's office has been hands-on in administering the money, with senior adviser Mike Morrissey running meetings with agency officials once or twice a week until recently.

The information on state Web sites varies. The Texas Department of Transportation has a "project tracker" that shows each construction project, contractors, amounts being spent and location. It can be viewed at apps.dot.state.tx.us/apps/project_tracker/stimprojects.htm.

Even the tiny Texas Commission on the Arts has a link to all National Endowment for the Arts awards in Texas at www.nea.gov/grants/recent/09grants/states2/arra.php?STATE=TX.

The public can view the efforts by the governor's office at governor.state.tx.us/cjd.

New diversion of road tax discovered, citizens demand end to diversions

Link to article here.

Anti Toll Groups Would Back Gas Tax Increase
but only if 'diversions' from gas tax fund are ended
By Jim Forsyth
Friday, April 16, 2010

Leaders of the anti toll road movement in Texas are quietly notifying state lawmakers that they would support an increase in the state gasoline tax as an alternative to toll roads, but they are demanding some concessions in return, 1200 WOAI news reports.

Terri Hall, founder of the anti toll group Texans Uniting for Reform and Freedom, says an increase in the gasoline tax would be preferable to 'out of control' creation of toll roads.

The Texas gasoline tax, which is 20 cents a gallon, hasn't been raised since 1991, and the move to more fuel efficient cars is drastically cutting into the amount of money available for highway construction and maintenance, which has led to talk of toll roads.

"The studies we've seen would show that somewhere between eight and ten cents a gallon would meet out road needs, without having to toll our roads," Hall said.

Tax increases are very controversial in the Texas Legislature, with the Republican leadership and Governor Perry repeatedly indicating that they would oppose tax increases.

Hall says she would back the gas tax increase if lawmakers agree not only to completely end the controversial practice of 'diverting' gas tax revenue to pet projects in their districts, and if lawmakers consider using the state automobile sales tax for highway projects.

"We all pay vehicle sales tax when we buy a car, and that money is now going into general revenue, instead of to roads," Hall said. "My understanding is that there is $4 billion a year that we could put back into roads, without having to raise any taxes."

The legislature is expected to be facing a massive deficit, as much as $15 billion, when the next session begins in January, and Hall concedes that with the state scrambling for general fund revenue, taking billions of dollars out of the general fund may not be politically feasible.

SHAKEDOWN: Blagojevich bribed road contractors on Illinois toll project

Link to article here.

WARNING: There is some profanity contained in this article. Blagojevich uses some profane words when speaking about his plans to extort money from road contractors in exchange for building a much bigger toll project (went from $1.8 billion to a $5 billion project).

Illinois Tollway in clear in Blagojevich corruption case - no staff or board implicated
Toll Road News
Posted on Wed, 2010-04-14 22:47

The Feds have released details of their corruption case against former Illinois Governor Rod Blagojevich. Called "Government's evidentiary proffer" the 91-page document filed in US District Court in Chicago by US Attorney Patrick J Fitzgerald today shows that the Governor tried to use the Illinois Tollway to extort money from Tollway contractors. But it makes no suggestion that Tollway officers or board members were involved in the shakedowns, just the Governor himself and his staffers.

The document is remarkable for the detail of hundreds of conversations between the governor and his immediate staff and telephone calls. Clearly the FBI had Blagojevich's offices wired and other places he met. They tapped into his telephone conversations and those of his immediate staff.

Most important, key participants in the conspiracies led by Blagojevich are cooperating with the US Attorney in his prosecution, perhaps in return for leniency.

The case begins before Blagojevich won the governorship in an election in late 2002. There are accounts of conversations with associates to plan extortions early in 2002.

From p21 of the US case after he became governor:

"There were occasions after Blagojevich became Governor that Blagojevich, Kelly, Monk, and Rezko (political hacks and flacks) all met to discuss their efforts to make money from state action. For example, the four men met in a conference room at the offices of one of Rezko’s businesses in about mid to late 2003. During the meeting, Rezko led the discussion, standing at an easel or chalkboard and listed at least three or four different ideas or plans to make money being developed by Rezko that involved some kind of state action. At times, Kelly got up during the meeting and clarified or added to things that Rezko was saying. Blagojevich mostly listened during the meeting, but was engaged. As Rezko talked, he indicated how much money Blagojevich, Kelly, Rezko, and Monk could hope to make from the different ideas. The amounts that were associated with the different ideas were typically in the hundreds of thousands of dollars per deal, which would be evenly split four ways."

Obsessed with moneymaking

As pictured in the US Government case Blagojevich was completely obsessed with using the post of governor to enrich himself and his supporters. Everything he did seems to have been geared to self-enrichment and self-advancement. Every issue and decision was discussed in terms of what opportunity it provided to extort and steal. Many cases of corruption are laid out in detail.

The Tollway appears about halfway through

Several pages (from p52 on) are devoted to "Attempted Extortion Relating to the Tollway Program".

That started when Tollway board members talked with Blagojevich about potential construction plans. They presented a $1.8 billion option and a more ambitious $5 billion option. Blagojevich told a flack named Monk that the Tollway's program would be great for engineering firms. If they'd cough up serious money he'd go with the $5b program: "If they don't step up, fuck 'em. I won't do the bigger announcement (the $5b) in January.”

The US case page 53 on: "In about mid-September 2008, Blagojevich met with Monk, Robert Blagojevich, and Construction Executive, who was an executive in a cement company, at the FOB (Friends of Blagojevich) offices. As an active member of a concrete industry association group, Construction Executive had been responsible for raising large amounts of contributions for Blagojevich beginning in about 2002. Monk had become the primary contact with Construction Executive in terms of fundraising for Blagojevich in about 2007.

"At the meeting, Blagojevich also talked about both the potential $1.8 billion and $5 billion Tollway road building programs. Blagojevich indicated to Construction Executive that he was going to announce the small plan that Fall. Blagojevich said that he was inclined to also go forward with the larger plan, but that he did not want word to get out about his interest in doing so. Blagojevich explained that he wanted to keep that quiet so that the legislature would continue to feel pressure to pass a capital bill. Blagojevich suggested to Construction Executive that Blagojevich had the power to go forward with either of the two Tollway roadbuilding programs without the approval of the legislature. In response, Construction Executive told Blagojevich that he was in favor of the building programs because the concrete industry really needed the work."

Get the money in before the law changes

"Shortly thereafter in the meeting, Blagojevich said he wanted to talk about campaign contributions. Blagojevich talked about the change in Illinois law that would restrict the ability of companies that did work with the State of Illinois to contribute money to him, and how that law would take effect by the end of the year. Blagojevich asked for Construction Executive’s help raising money and indicated that Blagojevich wanted to raise the money before the end of the year.

Fobbed off

"Blagojevich asked Construction Executive how much money he could raise. When Construction Executive initially indicated that he did not know, Blagojevich again brought up the Tollway program and discussed additional projects that could be done if the larger program were done. At the end of the meeting, Construction Executive was again asked about how much money he thought he could raise for Blagojevich. Construction Executive indicated that he would have to go back to his people and talk to them about it.

"Both Monk and Construction Executive understood that Blagojevich was making a connection in the meeting between the amount of money that Construction Executive might be able to raise for Blagojevich and his willingness to do the larger Tollway program. As a result of Blagojevich’s statements, Construction Executive felt pressure from Blagojevich to raise money for Blagojevich so that he would allow the larger Tollway program to go forward.

"After Construction Executive left the meeting, Blagojevich directed Monk to ask Construction Executive to raise $500,000 in contributions, which money Monk understood would come both from Construction Executive’s own company as well as from other companies in the road building industry.

Blagojevich: "If they don't perform (pay up) fuck 'em"

"On October 6, 2008, Blagojevich met with Lobbyist A at the offices of Friends of Blagojevich (“FOB”) offices. During their meeting, Blagojevich mentioned an upcoming announcement he was planning to make regarding a $1.8 billion project with respect to the Tollway. Blagojevich said words to the effect of, 'I’ve got Lon going to Construction Executive and asking for $500,000' and 'I could have made a larger announcement but wanted to see how they perform by the end of the year. If they don’t perform, fuck ‘em.'

$1.8 billion or $5 billion is the issue

"Lobbyist A knew that Construction Executive was involved with a trade association that would benefit from the proposed $1.8 billion project. Lobbyist A understood Blagojevich to mean was that he expected that Construction Executive would raise $500,000 in contributions to FOB and that Blagojevich was willing to commit additional state money to the project beyond the $1.8 billion but was waiting to see how much money interested entities raised for FOB before the end of the year.

"In mid-October 2008, Blagojevich announced a plan for a $1.8 billion Tollway building program. On about October 22, 2008, Blagojevich called Construction Executive. Blagojevich talked about the $1.8 billion program and asked Construction Executive something like 'How are you coming with the fund raising?'"

But the US Government account has it that Construction Executive was in fact stringing the governor along, not saying yes, not saying no.

Here's the official account quoting from p55 and p56:

"Construction Executive indicated to Blagojevich that he was working on raising money, but that was not true. Construction Executive did not, in fact, plan on raising any money for Blagojevich, but Construction Executive did not want to say that for fear that Blagojevich would be less inclined to go forward with the larger Tollway project. Construction Executive ultimately did not make or arrange for any contributions to be made to Blagojevich.

"(Flack) Monk also continued to stay in touch with Construction Executive about potential contributions to Blagojevich, and consistently reported on the status of those conversations to Blagojevich and Robert Blagojevich, including on November 24, 2008 (Blagojevich Call #1005).22/"

That's the extent of the Tollway involvement in the 91 page document from US Attorney Fitzgerald.

The Governor tried to use his power over key Tollway decisions to extort money from companies wanting business with the Tollway. But he failed.

Of Blagojevich, apparently, the Construction Executive rightly said "Fuck 'im."

Under his breath anyway.

BACKGROUND: Blagojevich, a Democrat was arrested by US marshals Dec 9 2008 charged with extensive corruption, the most spectacular count being an effort sell to the highest bidder the US Senate seat vacated by Barack Obama after his election as US President. Blagojevich as governor had the power to appoint a successor to Obama.

An oddly youthful looking man he's in fact53 (born 1956-12-10) his full name is Milorad Blagojevich, his first name anglicized and simplified to Rod. Born and raised on the northwest side of Chicago to Serb immigrants he worked as shoeshiner, pizza delivery, and in a meat plant. He is said to have washed dishes in a camp on the Trans Alaskan Pipeline.

Wikipedia on his education: "Blagojevich graduated from Chicago's Foreman High School after transferring from Lane Technical High School. He played basketball in high school and participated in two fights after training as a Golden Gloves boxer.[19] After graduation, he enrolled at the University of Tampa.[20] After two years, he transferred to Northwestern University in suburban Evanston where he graduated with a BA in history in 1979. He later (obtained) his JD from the Pepperdine University School of Law in 1983. He later said of the experience: 'I went to law school at a place called Pepperdine in Malibu, California, overlooking the Pacific Ocean — a lot of surfing and movie stars and all the rest. I barely knew where that law library was.' "

He married Patricia Mell the daughter of Richard Mell a Chicago alderman. He clerked for another Chicago alderman, then got a job as an assistant prosecutor under famous mayor Richard M Daley, when Daley was State's Attorney.

His influential father-in-law appears tog have launched him on his political career - first in the state house, then as a US Congressman for the 5th district (Chicago). He seems to have been a good campaigner but kept out of the spotlight as a state and US representative.

His predecessor as Illinois governor George Ryan, a Republican, also an extortionist and thief, is serving time in a federal jail.

TOLLROADSnews 2010-04-14

Goldman Sachs accused of defrauding investors

Link to article here.

Goldman Sachs has been a key player in advising governments as well as private investors on infrastructure/toll road deals called public private partnerships. They're instrumental in many deals in Texas and have swarmed our highway department, infecting them with their fraudulent schemes that exploit taxpayers. Perhaps if justice is truly served in this case, we may rid ourselves of at least one major canker in this fight.

SEC accuses Goldman Sachs of defrauding investors
Posted Friday, Apr. 16, 2010
By MARCY GORDON
AP Business Writer

WASHINGTON — The government on Friday accused Wall Street's most powerful firm of fraud, saying Goldman Sachs & Co. sold mortgage investments without telling the buyers that the securities were crafted with input from a client who was betting on them to fail.
And fail they did. The securities cost investors close to $1 billion while helping Goldman client Paulson & Co., a hedge fund, capitalize on the housing bust. The Goldman executive accused of shepherding the deal allegedly boasted about the "exotic trades" he created "without necessarily understanding all of the implications of those monstrosities!!!"

The civil charges filed by the Securities and Exchange Commission are the government's most significant legal action related to the mortgage meltdown that ignited the financial crisis and helped plunge the country into recession.
The news sent Goldman Sachs shares and the stock market reeling as the SEC said other financial deals related to the meltdown continue to be investigated. It was a blow to the reputation of a financial giant that had emerged relatively unscathed from the economic crisis.

Goldman Sachs denied the allegations. In a statement, it called the SEC's charges "completely unfounded in law and fact" and said it will contest them.

The SEC is seeking to recoup the money lost by investors and impose unspecified civil fines against Goldman Sachs and the executive, Fabrice Tourre. The SEC could enter into settlement negotiations over the amount if Goldman changed its stance and decided not to fight the charges in a trial.

The SEC said Paulson paid Goldman roughly $15 million in 2007 to devise an investment tied to mortgage-related securities that the hedge fund viewed as likely to decline in value. Separately, Paulson took out a form of insurance that allowed it to make a huge profit when those securities' value plunged.

The fraud allegations focus on how Goldman sold the securities. Goldman told investors that a third party, ACA Management LLC, had selected the pools of subprime mortgages it used to create the securities. The securities are known as synthetic collateralized debt obligations.

The SEC alleges that Goldman misled investors by failing to disclose that Paulson & Co. also played a role in selecting the mortgage pools and stood to profit from their decline in value. Two European banks that bought the securities lost nearly $1 billion, the SEC said.

"Goldman wrongly permitted a client that was betting against the mortgage market to heavily influence which mortgage securities to include in an investment portfolio, while telling other investors that the securities were selected by an independent, objective third party," SEC Enforcement Director Robert Khuzami said in a statement.

But Goldman said in a statement that it never mischaracterized Paulson's strategy in the transaction. It added that it wasn't obliged to "disclose the identities of a buyer to a seller and vice versa."

The charges name only Goldman Sachs and Tourre, who was a vice president in his late 20s when the alleged fraud was orchestrated in 2007. Tourre, the SEC said, boasted to a friend that he was able to put such deals together as the mortgage market was unraveling in early 2007.

In an e-mail to the friend, he described himself as "the fabulous Fab standing in the middle of all these complex, highly leveraged, exotic trades he created without necessarily understanding all of the implications of those monstrosities!!!"

Tourre, 31, has since been promoted to executive director of Goldman Sachs International in London.

Stanford University spokeswoman Elaine Ray said a student by the name of Fabrice Tourre received a master's degree in management science and engineering from the school in 2001.

A call to a lawyer for Tourre, Pamela Chepiga at Allen & Overy LLP, wasn't returned.

Asked why the SEC did not also pursue a case against Paulson, Khuzami said: "It was Goldman that made the representations to investors. Paulson did not."

Paulson & Co. is run by John Paulson, who reaped billions by betting against subprime mortgage securities. He is not related to former Treasury Secretary Henry Paulson, a former Goldman CEO.

John Paulson was among the first on Wall Street to bet heavily against subprime mortgages. His firm earned more than $15 billion in 2007, and he pocketed $3.7 billion. He has since earned billions more, largely by betting against bank stocks and then buying them back after their shares plunged.

In a statement, Paulson & Co. said: "As the SEC said at its press conference, Paulson is not the subject of this complaint, made no misrepresentations and is not the subject of any charges."

Goldman, founded more than 140 years ago, built a reputation as a trusted adviser to investment banking clients and for sending top executives into presidential Cabinet posts.

In recent years, it shifted toward taking more risks with its clients' money and its own. Goldman's trading allowed the firm to weather the financial crisis better than most other big banks. It earned a record $4.79 billion in the last quarter of 2009.

The complaint filed in federal court in Manhattan "undermines their brand," said Simon Johnson, a professor at the Massachusetts Institute of Technology and a Goldman critic. "It undermines their political clout. I don't think anybody really values being connected to Goldman at this point."

He continued: "There are many people who - until this morning - thought Goldman Sachs was well-run."

The SEC's enforcement chief said the agency is investigating a wide range of practices related to the crisis. The prospect of possible legal jeopardy for other major financial players roiled the stock market.

Goldman Sachs shares fell more than 12 percent Goldman and lost $14.2 billion in market capitalization. The Dow Jones industrial average finished down more than 125 points.

The SEC appears to be taking a particularly aggressive approach with Goldman. Typically, cases are resolved by firms agreeing to a settlement before the charges are made public, said John Coffee, a securities law professor at Columbia University.

"The SEC has changed its style," Coffee said. "They wanted to tell the world what they thought Goldman had done wrong."

The charges come as lawmakers seek to crack down on Wall Street practices that helped cause the financial crisis. Congress is considering tougher rules for complex investments like those involved in the alleged Goldman fraud.

President Barack Obama vowed Friday to veto a financial overhaul bill that doesn't regulate mortgage-backed securities and other so-called derivatives. Legislation in Congress would for the first time regulate derivatives, whose value depends on an underlying asset, such as mortgages or stocks. Senate Republicans oppose the bill.

Rep. Barney Frank, D-Mass., chairman of the House Financial Services Committee, is "pleased that the SEC is departing from the lax enforcement of the Bush administration and is returning to the SEC's proper role of protecting investors in the marketplace," spokesman Steven Adamske said.

The biggest loser in the alleged fraud was ABN Amro, a major Dutch bank, and the Royal Bank of Scotland, which acquired major portions of it in 2007. The SEC said the Royal Bank of Scotland paid Goldman $841 million to unwind ABN transactions.

IKB Deutsche Industriebank AG, a German commercial bank, lost nearly all its $150 million investment, the agency said. Most of the money the banks lost went to Paulson in a series of transactions between Goldman and the hedge fund, the SEC said.

IKB was an early casualty of the financial crisis. It issued a profit warning in 2007 saying it had been hurt by U.S. subprime mortgage investments. IKB was sold in 2008 to Dallas-based Lone Star Funds.

Ed Trissel, a spokesman for Lone Star Funds, declined to comment on the case.

The SEC charges come after Goldman Sachs denied last week it that bet against clients by selling them mortgage-backed securities while reducing its own exposure to them.

In an annual letter to shareholders, Goldman said it began reducing its exposure to the U.S. mortgage market in late 2006.

AP Business Writers Alan Zibel in Washington, Stevenson Jacobs in New York and Ashley M. Heher in Chicago contributed to this report.

Dixon: We need principled road policy

Link to article here.

Mr. Dixon has been a stalwart supporter of the cause for many years. He's sacrificed more hours than we can count in Austin advocating for taxpayers on transportation issues. This article was also published in the Lone Star Report. It hits the nail on the head of how we move forward...

Tired of Gridlock? Try Principled Road Policy
by Don P. Dixon
Dallas Morning News, Guest blogger
Mon, Apr 12, 2010

The main reasons Texans are stuck in traffic is a massive failure in public road policy, lack of reforms and inefficiency at TxDOT. The fact is that public roads are a low priority for the state.

In 30 years the state budget went up 8.66 times – from $10.22 billion in 1980 to $88.57 billion in 2009. In the same 30 years, road work went up 2.69 times from $1.58 billion to $4.25 billion.

In 1980, Texas spent 15.45 percent of state budget on road work (maintenance and new construction). In 2009 Texas spent 4.8 percent of state budget on road work.

Whether state leaders believe it or not, in 30 years road work priority and efficiency continue to deteriorate. Car and truck drivers have paid billions in gas taxes and registration fees to build and maintain the roads, but almost half is diverted away from public roads. All gas tax and registration fees should go to public roads.

Taxpayer restitution of at least $12 billion needs to be corrected by temporarily transferring auto/truck sales tax (including parts sales) to public roads, almost $4 billion per year.

Before the public is asked to pay more in new taxes, reform of road policy must occur:

1. Stop building roads with debt such as $12 billion state road debt and $12.7 billion plus off-budget toll road debt.

2. The toll road debt and costs to run toll road bureaucracy are unacceptable, unaffordable, and unsustainable.

3. End diversions completely.

4. Increase TxDOT efficiency and stop wasteful spending.

5. TxDOT must halt the siphoning of billions of dollars from public roads to convert public right of ways into toll roads, i.e., stop tolls, stop CDAs (privatizing road ways).

6. End non-traditional financing (innovative financing).

The off-budget tax increases the state leaders have laid on drivers through tolls and privatizing Texas roads are confiscatory taxes. This must be stopped.

The toll tax of 17 cents to 75 cents per mile means the driver pays $4 to $17 per gallon extra for toll roads.

The 87 toll roads TxDOT has on its books will cost Texans, optimistically speaking, a minimum of $177 billion in toll tax over 22 years, which annualized is more than the current TxDOT budget.

No one likes tax increases; however, if additional funds are needed after reforms, the statewide gas tax per gallon is the most efficient and most fiscally responsible way to fund roads.

With regard to the local option tax, Gov. Pat Neff (father of the public road system) learned it served only to create a patchwork road system. He saw it was a failed system, so he founded the statewide highway system.

A uniform statewide public road system funded at the state level – freely accessible by all citizens, regardless of income, status or location - is the proper and rightful duty of the state.

The once superior ranking of the Texas public road system was lost by compromising sound, principled road policy. Thus we are in road gridlock.

Restoration of an equitable statewide public road system will come about only through our elected leaders, in every branch of government, recognizing the cause and courageously mandating an accountable agency using best practices and a sound fiscal policy in order to regain the taxpayers’ trust.

Don Dixon is a retired engineer who lives in San Antonio.

Toll reader mistakes digits, bills & fines WRONG driver

Link to article here. Electronic toll equipment continues to be rife with problems that fine and harass innocent motorists. Refunds are late in coming if ever, but bills and fines sure aren't!

Toll road computer needs glasses
Misreads an 8 as a 0; issues fine to Army wife in South Korea
By Jon Yates
CHICAGO TRIBUNE
What's Your Problem?
April 11, 2010

It's pretty clear Heather Perry didn't blow through a toll without paying March 10, 2009.

For one thing, she was half a world away, living with her Air Force husband, stationed at Osan Air Base in South Korea.

For another, she didn't own the car photographed by an Illinois tollway camera. Even the license plate number was wrong. Perry's plate, which sat in a storage facility in California, ends in a zero. The license plate in the picture ends in an eight.
By the time the notice of violation arrived at her mother's Broadview home, there had been three violations mistakenly attributed to Perry.

Each missed $1 toll had been assessed a $20 fine, bringing the total to $63. The notice of violation gave Perry 14 days to respond. If she didn't, she would be found liable for the tolls and assessed another $150 in fines.

Her mother, Phyllis Perry, forwarded her the letter immediately.

"Because she's in Korea, she went ahead and paid," Phyllis Perry said. "I told her not to. I said we have some time. I think she was worried she'd get fined, and it would double. She didn't feel like she could fight it."

A short time later, Phyllis Perry called the Illinois State Toll Highway Authority and pleaded her case. A customer service representative reviewed the case and agreed with her.

Turns out, a computer that reads the license plates of toll violators had erroneously interpreted the eight as a zero. A toll authority worker who is supposed to review the computer's work failed to catch the computer's error.

The customer service agent promised to send Perry a $63 refund.

That was more than a year ago.

Phyllis Perry had almost forgotten about the refund until she received another notice from toll authority last month. It seemed history had repeated itself.

The same car that blew through three toll plazas in 2009 had blown through another three this year. Again, the tollway's computer misread the license plate. So did the toll authority's human employees.

For the second year in a row, the toll authority sent Perry a notice that she owed $63.

"It's the same car, the same license plate, the same exits as the car that did this in 2009," Phyllis Perry said. "It's very, very crazy."

Phyllis Perry said she called the toll authority again, and a customer service representative immediately agreed to erase the newest batch of fines. Phyllis Perry then asked about the status of her daughter's refund from last year.

"She told me you have to be patient."

Patience is one thing. But an entire year? Tired of waiting, she e-mailed What's Your Problem?

"I'm very, very frustrated," the mother said. "It bothers me that they want more money for things going on in the state, and they can't take care of this one little problem."

The Problem Solver called toll authority spokeswoman Joelle McGinnis, who looked into Perry's case. A few days later, McGinnis called back with a mea culpa. Put simply, the toll authority dropped the ball.

"We have documentation of the request for the refund coming to our contracted customer service center," McGinnis said. "Unfortunately, that request never was processed."

It has been now. McGinnis said the request was hand delivered to the appropriate office on Wednesday. Perry should be getting her check for $63 within about a week, McGinnis said.

Phyllis Perry said she will call her daughter and inform her of the good news. When the check arrives, she will forward it to Korea immediately.

She said the process still bothers her.

"When I called them this last time, (the customer service agent) told me I just have to be patient, that these things take time," Phyllis Perry said. "She should have told me it wasn't in the system, and we could have gone from there."

Not that she's too upset.

"At least it's coming now," she said. "As long as it's coming, I'm happy."

PPP planned for Oregon bypass through farmland

Link to article here.

It shouldn't surprise that the pro-toll crowd sees farmland as fair game fro condemnation for toll roads and preferable to residential and commercial property. With this attitude, how will we feed America if we continue to pave over our country's farmland to make way for urban "congestion relief"? The Trans Texas Corridor is a perfect case in point. Studies showed that a bypass through rural Texas would do NOTHING to relieve urban congestion.

It was too out of the way, plus the fact that people would have top pay a toll to access it, made traffic volumes too low to be toll viable. Yet to listen to this industry article, they live in a world of their own reality. One that promises rosy traffic projections but will likely end in massive taxpayer bailouts when the road goes belly-up as the South Bay Expressway PPP contract just did in San Diego.

Oregon businessman, engineer developing P3 for I-5 to 99W connector
Fri, 2010-04-09
Toll Road News

A group of local businessmen, engineers and roadbuilders in Oregon are developing an approximate 20km (12 mile) $350m to $400m tollroad project designed to improve connections between Portland and the coast. Called the Coastal Parkway the project would provide a high quality connection between I-5 and the 99W or Southwest Pacific Highway near Dayton. They hope to get a toll concession from the state under its Public Private Partnerships law of 2009.

Principals of the group Coastal Parkway LLC are Bob Youngman, a developer based in Newberg and Phil Martinson PE, a consulting engineer. Also involved are some local construction companies.
We had a long talk with Youngman this afternoon.He says the new P3 law in the state is a great improvement on previous law, and he has been encouraged by support offered for the project by state and local officials.

He says the project is sorely needed but state and local officials say there is no prospect for financing the project with tax revenues.

They also have no stomach for taking it on as a public toll project.

Oregon is one of the few states in the union without any toll road or crossing.

Previous studies

The 99W corridor has been studied several times in the past for upgrades.

It is currently a 4-lane surface arterial with little access control and no grade separations. Previous planning for upgrades has focussed on sticking close to the southwest-northeast axis of 99W and bypassing the towns of Tualatin, Sherwood, Newberg and Dundee. The bypasses have been studied right on their fringes, and sticking to the north side of the Williamette River.

This is a corridor about 40km (25 miles) long but quite heavily developed and the improvement to expressway standard was costed at close to $1 billion for the length of the corridor.

Concession with Macquarie only generated study

Macquarie and Bechtel competed for a toll concession for this route (and for two others around Portland area) in 2005 and Macquarie won.

But Macquarie concluded in 2007 the traffic and revenue wouldn't support the cost of the 99W bypass upgrade. The project languished.

More economical than the fringe bypassing

Youngman says his group's proposal is far more economical because rather than attempt the fringe bypasses along 99W, it makes use of some 22km (14 miles) of I-5 south to the Donald/Aurora area and involves a much shorter new east-west tolled link through rural land to meet 99W in Dayton.

That proposed east-west link is being called the Coastal Parkway.

Five alternative alignments are being shown at meetings. They range in length between 18km (11.3mi) and 23km (14mi). The longer alternates take off from I-5 further north but make for a slightly shorter run Portland to the coast, although because of the dogleg of using I-5 all are a few miles longer than the old plan for hugging the towns of the 99W corridor.

An advantage however is that they involve almost no resumption of residential or commercial properties like the fringe bypass plans, since the routes for the Coastal Parkway go through farmland.

Williamette River bridge

They do involve a decent sized bridge over the Williamette River. This has to have a span of around 180m (600ft) so it would probably be a cable-stay bridge. However the river is not used by major ships and the Coast Guard only requires a clearance of 15m (50ft).

Otherwise the Coastal Parkway involve three interchanges, one at each end, I-5 and 99W and another at River Road NE serving the small town of St Paul. They also propose a recreational bike/hike trail along the river.

With just one intermediate interchange there would be just two toll points and all-electronic tolling sounds the likely choice.

Youngman says they estimate project cost will be in the range $350m to $400m - less than half the cost of previous schemes in the 99W corridor itself.

The route should attract 99W car travelers between the Portland area and the coast plus a lot of lumber, chip, plant nursery, and produce trucks as well as motor coaches. Indian reservations at Grand Ronde to the southwest have tourism and casino activities swerved by coaches.

Traffic volume

As for traffic volume they are confident that the tollroad can attract more than the 24k vehicles/day they estimate is the break-even traffic for the project.

Youngman, who was born and raised and is still based in the Newberg area, says the congestion is so bad through the small towns along 99W that economic opportunities are limited. He says the project is gaining support with the promise of traffic relief and improved travel for the cities and towns of Newberg, Dundee, McMinnvile, Dayton, StPaul, Lafayette and Donald.

He is interested in partnering with larger companies.

pdf of a powerpoint presentation by Coastal Parkway LLC:

http://www.tollroadsnews.com/sites/default/files/PowerPt.pdf

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

Transportation Secretary: End to favoring motorized transportation with gas taxes

Link to article here.

Perhaps the most disturbing part of this policy shift is that we already have a litany problems caused by diverting gas taxes AWAY from roads. Diverting yet more money away from roads is stealing from Peter to pay Paul. We pay gas taxes to build and maintain our roadways. It's supposed to be a dedicated fund that cannot be touched for other purposes. Mass transit, bike lanes, walkways need to be paid for through other means, particularly when the road funding shortfalls have caused massive new tax hikes through tolling (75 cents a mile to drive our public roads compared to 1-2 cents per mile under the gas tax system).

LaHood's cavalier attitude about government intrusion and its attempts to coerce people out of their cars by starving their gas taxes to pay for non-road uses is equally disturbing.

“It is a way to coerce people out of their cars,” said LaHood...“About everything we do around here is government intrusion in people's lives...So have at it.”

Obama Transportation Secretary: ‘This Is the End of Favoring Motorized Transportation at the Expense of Non-Motorized’
Wednesday, March 24, 2010
Terence P. Jeffrey, Editor-in-Chief
CNS News.com

(CNSNews.com) - Transportation Secretary Ray LaHood has announced that federal transportation policies will no longer favor “motorized” transportation, such as cars and trucks, over “non-motorized” transportation, such as walking and bicycling.

LaHood signed the new policy directive on March 11, the same day he attended a congressional reception for the National Bike Summit, a convention sponsored by a bicycling advocacy group, the League of American Bicyclists. LaHood publicly announced his agency’s new direction four days later in a posting on his blog—“Fast Lane: The Official Blog of the U.S. Secretary of Transportation”--where he effusively described it as a “sea change” for the United States.

“Today, I want to announce a sea change,” LaHood wrote. “People across America who value bicycling should have a voice when it comes to transportation planning. This is the end of favoring motorized transportation at the expense of non-motorized.”

LaHood’s policy statement not only called for this change to take place in programs funded by the federal government, but also said the federal government would “encourage” state and local governments to do the same in their own programs.

“The establishment of well-connected walking and bicycling networks is an important component for livable communities, and their design should be a part of Federal-aid project developments,” said LaHood's policy statement.

“Because of the benefits they provide, transportation agencies should give the same priority to walking and bicycling as is given to other transportation modes,” it said.

LaHood's policy statement envisions the development of a transportation system in which people walk and bike for short distances and rely on mass transit for longer trips. “The primary goal of a transportation system is to safely and efficiently move people and goods,” said LaHood's statement. “Walking and bicycling are efficient transportation modes for most short trips and, where convenient intermodal systems exist, these nonmotorized trips can easily be linked with transit to significantly increase trip distance.”

On May 21, LaHood told reporters at the National Press Club that the “Partnership for Sustainable Communities’ his department had formed with the Environmental Protection Agency and the Department of Housing—sometimes known as the “livability initiative”--was designed to “coerce” people out of their cars.

“Some in the highway-supporters motorist groups have been concerned by your livability initiative,” said the moderator at the National Press Club event. “Is this an effort to make driving more torturous and to coerce people out of their cars?”

“It is a way to coerce people out of their cars,” said LaHood.

The moderator later asked: “Some conservative groups are wary of the livable communities program, saying it's an example of government intrusion into people's lives. How do you respond?”

“About everything we do around here is government intrusion in people's lives,” said LaHood. “So have at it.”

Motorists now pay a federal tax of 18.3 cents on every gallon of gasoline they buy, and 24.4 cents on every gallon of diesel fuel. These taxes fund the federal Highway Trust Fund. According to a study by the Heritage Foundation, 26 percent of the money in this trust fund was diverted in fiscal 2008 to pay for things other than highways and roads. Of the total of $52 billion spent that was spent that year, $9.7 billion went to mass transit, even though mass transit passengers accounted for only 1.6 percent of surface-transportation passengers. The highway trust fund also gave $80 million that year to build trails.

Trinity toll road farce

Link to article here.

TxDOT insisted NO work could commence to retrofit decaying bridges near the Trinity River in Dallas unless the Trinity toll road was built first. Now they've changed their tune saying work CAN begin on the unsafe overpasses BEFORE the Trinity toll road is built. So once again, TxDOT used deceptive tactics to force voters into supporting an unwanted toll road only to do a bait and switch post-election.

This is why insisting on a public vote on toll roads is a recipe for failure. The big money armed with the aid and comfort of a corrupt highway department know how to get these ill-conceived projects past the voters. If nothing else, they know it's a waiting game...they won't fix our roads and we'll be stuck in endless gridlock until we finally capitulate to their toll agenda.

TxDOT: Key phase of downtown Dallas road project can start Trinity toll road

Saturday, April 3, 2010
By RUDOLPH BUSH and STEVE THOMPSON / The Dallas Morning News
Part of the city's tangled Mixmaster interchange downtown, including two key bridges spanning the Trinity River, can be rebuilt without constructing a toll road through the Trinity levees, a top transportation official told regional planners and elected officials Friday.

Bill Hale, Dallas district engineer for the Texas Department of Transportation, said the city and state need to move forward with rebuilding the bridges over Interstate 35E and I-30 because they are rapidly deteriorating.

He urged Dallas officials to focus on finding funding for those projects as soon as possible.
The Mixmaster interchange is a key piece of the $2 billion Project Pegasus, which city and state officials have long said could not get under way until the toll road between the Trinity levees was built.

Speaking to the Dallas Regional Mobility Coalition, Hale said Friday that was TxDOT's view for many years.

"We knew the best way to get it built was to have the extra lanes built first, meaning the Trinity [toll road], then secondly coming in with the Pegasus project," Hale said.

The condition of the bridges has changed that, he said.

"The issue that we're working with on this thing [now] is the safety of the thing. And that's what I'm concerned with," he said.

City officials hope to replace both concrete bridges with soaring white steel bridges designed by famed Spanish architect Santiago Calatrava.

Calatrava has designed the I-30 bridge, also known as the Margaret McDermott Bridge. The I-35E bridge has yet to be designed, and neither is funded for construction.

In 2007, during the run-up to a referendum that would have killed the toll road, backers of the road repeatedly cited transportation officials' tying of funding for Pegasus to completion of the toll road.

In a November 2007 article in The Dallas Morning News, Timothy Nesbitt, a Transportation Department project manager, said the toll road was the key to nearly $5 billion in other badly needed highway improvements in downtown Dallas.

"Without the Trinity, the other projects go away," he said.

And in an opinion piece in The News, Mayor Tom Leppert, who led the successful fight for the road, wrote that "TxDOT has flat out said it will not proceed with the state and federally funded Project Pegasus, the Mixmaster fix, if a reliever route – the Trinity Parkway – isn't in place."

Now, it appears the Transportation Department is eager to go forward with much of the Mixmaster – which includes the I-35E and I-30 interchange southwest of downtown – even if it cannot yet construct the entire Pegasus project. This portion would cost an estimated $500 million to $600 million, or more than a quarter of the cost of Pegasus.

Hale said the toll road or some other reliever route must be built before the so-called Canyon – a depressed portion of I-30 south of downtown – can be rebuilt.

In an interview after his presentation, Hale said his comments weren't intended to represent a major shift in plans.

"It's not a shift. There are portions of the Pegasus that can't begin before [a reliever route] happens," he said.

Leppert and City Manager Mary Suhm said they too don't view Hale's recommendation on the bridges as a sweeping change to the project.

"Can we do stuff around the edges and periphery? Absolutely," Leppert said.

He compared reconstruction of the bridges to the city and state's decision to go forward with the reconstruction of Dead Man's Curve on the S.M. Wright Freeway. That was originally intended to be rebuilt in tandem with the toll road.

But opponents of the toll road, led by council member Angela Hunt, see it differently.

"First, it was we cannot do any part of Project Pegasus; we are going to lose hundreds of millions in funding" without the toll road, she said. "Now it comes to light that we certainly can get started on a major part of the project and move forward without having this detour in place," she said.

Hunt, who has long urged the city and state to complete the Pegasus project without the toll road, said the decision to move forward now flies in the face of representations by toll road backers during the 2007 campaign.

She said she believes that the toll road project – hampered not only by concerns about the safety of the city's levee system but also by a $1 billion funding gap – is dead, and that the Transportation Department has no choice but to move on with Pegasus now.

In her view, Hale's urging of the city to focus on funding construction of the bridges instead of the toll road is telling.

"TxDOT does not like to be on the wrong side of Dallas city politics. To even express that in conservative terms, I think, is pretty significant," she said.

Leppert called that blatantly false and said the city has been working constantly to secure funding for the bridges.

"You don't just do one thing at a time. In terms of the importance of the bridges, I was in Washington [recently] to make a push," he said.

Privatized toll road goes bankrupt using taxpayer money

San Diego's South Bay Expressway foreign-owned toll road has become the new poster child for the failed policy of road privatization. Up until now, most "conservative" and libertarian think tanks have promoted PPPs (public private partnerships) as the "free market" solution to road building. I've said all along it's no such thing. They're government-sanctioned monopolies and the Editorial Board of a leading conservative national newspaper, the Washington Times, agrees.  

The editorial also notes the flaw in raising toll rates when traffic drops, which is the exact opposite of a free market response to fewer customers. To increase demand they need to lower not increase toll rates. Yet what did the North Texas Toll Authority, a publicly run toll entity (so this problem isn't just isolated to privatized toll roads), do when its toll road system experienced a decline in traffic? Raised its rates by 32%!  

The new generation of toll roads that have relied on "innovative financing" (ie - taxpayer subsidized toll roads, often co-mingled with private money) find themselves consistently upside down on their debt despite the taxpayer bailouts that help front the construction costs. The foreign toll operator of the South Bay Expressway was one of the first to snag a federal, taxpayer-backed, low interest loan called a TIFIA loan (think public money for private profits). Now that the toll road went bankrupt, will the taxpayers EVER be paid back? The taxpayers long, sordid history of being fleeced by politicos who are nothing more than putty in the hands of special interests gives us the answer.  
Taxpayer-funded lobbying for Wall Street's sweetheart deals  

The Texas Department of Transportation (TxDOT) has twice directly lobbied Congress for PPPs, but also to relax any federal restrictions on them. Their latest lobbying push (see pages 5 & 6 here, draft only available, the final was adopted by the Commission but has not been posted on TxDOT's web site) tells Congress not to mess with Texas (let us do whatever we want, even if it means fleece our own citizens without their consent), yet it also asks them to aggressively fund the TIFIA loan program and other means to maximize the use of taxpayer money to subsidize private profits using these PPP toll roads.  

Our insolent, taxpayer-funded highway department has become a wholly-owned subsidiary of the Chamber of Commerce, PPP crowd, particularly when Texas law specifically prohibits state agencies from using public money to lobby. TURF still has a pending lawsuit to stop TxDOT's illegal lobbying. Perry vetoed the bill the Texas Legislature passed last year, HB 2142, to close TxDOT's perceived loophole it exploited to wage PR campaigns to persuade the public to accept PPPs and the Trans Texas Corridor. However, the bill only sought to clarify that advertising toll roads to seek to change public opinion against toll roads was indeed illegal. The law still very clearly prohibits lobbying, yet onward TxDOT marches with impunity.  

Our sold-out politicians are creating an infrastructure bubble that will be deemed "too big to fail" requiring even greater taxpayer bailouts if we allow this tax raid to continue. I have yet to see any data that shows increasing the cost of transportation (toll taxes on top of high gas prices) is good for the economy. All available data shows the opposite is true. When the cost of transportation goes up, driving and, subsequently, gas tax revenues go down, a principle that translates to toll roads. When the price of gas and or tolls go up, the usage of toll roads goes down.  

Bogus traffic projections the norm with toll roads  

 Also, the Washington Times piece mentions a study TxDOT did that admits toll roads are based on FLAWED traffic projections (that are kept secret until after the contracts are signed). The foreign toll operator, Macquarie, based in Australia, was off by nearly 40,000 vehicles per day! Such overblown traffic forecasts are the norm with this new generation of toll roads, so much so that the bond investors and toll operators are suing the traffic modelers when the traffic projections are so obviously akin to a fairytale than reality.  

The Editorial sums up why politicians like Rick Perry and his fellow so-called fiscal conservatives in the Texas Legislature support these deals -- outsourcing the tax hikes: "Bureaucrats and politicians turn to public-private partnerships because they, in effect, outsource unpleasant revenue-raising duties to private companies. As we see from the South Bay Expressway, the deals governments strike with companies to perform this task frequently are based on faulty, unsustainable assumptions."  

Second mortgage on our highway system  

Yep, government gets quick cash up front to build yet more toll projects in exchange for generations of debt and sky-high toll taxes in the hands of private companies to whom they defer all blame for the draconian tax hikes. This is precisely what we tried to stop in a bill that passed the Texas Legislature (SB 792) in 2007. SB 792 was the counterfeit PPP moratorium, which replaced a genuine moratorium, HB 1892 that was vetoed by Rick Perry, with the Governor's version that grandfathered the Trans Texas Corridor contracts along with close to a dozen others.  

A provision known as market valuation also forced public toll entities to jack-up toll rates as high as the private ones using toll rates as high as the "market" will bear in order to suck some speculative future "surplus revenue" out of the deal up front so they could go spend the money, today, building more toll roads (leveraging these projects to the hilt, never mind that surplus revenue has yet to show-up using "innovative finance" techniques). It's like taking out a second mortgage on our public highway system using the worst and most costly financing schemes.  

Housing bubble turned infrastructure bubble  

Essentially politicians, at Perry and the banksters behest, enshrined in law known risky multi-leveraged debt financing schemes using OPM (other people's money)...YOURS AND MINE! It's the very same financial scheme (monetizing the debt and spreading its toxicity to the far corners of the markets) that brought down the housing bubble and required massive taxpayer bailouts of the banksters and brokers who orchestrated the thievery.  

SB 792 allowed these traffic and revenue studies (toll viability studies that give the traffic estimates) to stay secret until AFTER the contract is signed. We tried to get lawmakers to remove this provision from the bill, and the amendment only got 19 votes (so much for OPEN GOVERNMENT, especially the kind that saves taxpayers money). This must be changed. We've long held that it violates federal law, the National Environmental Policy Act (NEPA), that requires the public and decision makers to be fully informed of the financial impacts of ALL the alternatives of a roadway project so it can properly weigh them and determine the preferred alternative.  

Revealing these flawed traffic projections BEFORE going to contract will help taxpayers ferret out the truly viable (and sensible) toll projects from those that aren't, which are being propped up by HEAPS of taxpayer subsidies (gas taxes, Texas Mobility Funds, Prop 14, Prop 12, stimulus money, TIFIA loans, PABs, etc., up front) that end up going bankrupt anyway.  The failure of the San Diego South Bay Expressway PPP toll road in less than three years exposes the mythical "free market" concept of public private partnerships (called CDAs in Texas). It's a fad whose time has ended.

Proposed toll road through prime farmland in Oregon draws ire

Link to article here.

Sounds eerily familiar...the Trans Texas Corridor would also eat-up prime Texas farmland, the Blackland Prairie, and just one corridor would displace $1 million people. Wait till the Oregonians find out about non-compete agreements and guaranteed profits for these private toll road operators...

Proposed toll road south of Portland runs into opposition
By Dana Tims, The Oregonian
April 05, 2010

PARKWAY.jpgView full sizeSteve Cowden/The Oregonian A proposal to build Oregon's only privately financed and operated toll road, almost all of it crossing prime farmland south of Portland, is running into stiff opposition from local residents, farmers and elected officials.

Backers of the Coastal Parkway -- a proposed 11.77-mile four-lane highway linking Interstate 5 near Woodburn with Dayton in Yamhill County -- have been meeting quietly since last fall with landowners and officials in potentially affected towns. But their apparent goal of building grass-roots support, one willing seller at a time, doesn't seem to be working.

"I'm a little fascinated by their assertion that there is any support for this at all," Marion County Commissioner Patti Milne said. "We don't need a bypass here that does nothing but solve Yamhill County's traffic problems."

Milne and fellow commissioners Sam Brentano and Janet Carlson are scheduled to meet with parkway promoters April 15, "just to hear first-hand where things stand," she said.

When the idea of establishing toll roads came up in 2006 as a way to relieve traffic congestion in the Dundee area, the reaction from residents in the area was swift and clear. A new toll-road proposal also faces an uphill battle.Newberg businessman Robert Youngman, president of Royal Chinook Development Co., has, to date, been the parkway's most visible public spokesman. He met with Donald-area farmers at a local cafe March 13 and has made recent presentations to city councils and planners in Dundee and Newberg. Similar talks are set for later in April with councilors in St. Paul and Donald.

Reached at his Newberg office this week, Youngman declined to comment on a project that, if completed, would be only the third or fourth privately operated toll road west of the Mississippi River.

"We appreciate your call," he said. "We'll be in touch."

Phil Martinson, a West Linn civil engineer who has attended many of the same meetings with Youngman, said it's too early to say much about the project. "Hopefully, within a few weeks, I can give you something more," he said.

Youngman, according to meeting minutes, told Dundee City Council members in October that the Coastal Parkway's financial backers want to proceed because they don't believe the long-planned and publicly financed Newberg-Dundee Bypass will ever be built.

He tagged the Coastal Parkway's estimated cost at $260 million and said the limited-access roadway's preferred option would have only three interchanges -- at Interstate 5, at Oregon 219 north of St. Paul and at Oregon 18 near Dayton. The route crosses prime farmland in the French Prairie area of northern Marion County.

Without one or the other projects, he said, commercial and commuter traffic on Oregon 99W through Dundee will continue to remain hopelessly gridlocked.

Asked to identify the Coastal Parkway's financial supporters, Youngman listed Hampton Lumber, Evergreen Aviation, Cascade Steel Rolling Mills, the Oregon Trucking Associations and the Business Transportation Group.

Steve Zika, Hampton Lumber's CEO, said he wasn't familiar with details of the Coastal Parkway proposal, but said any alternative to the current congestion jamming Yamhill County's main highways would be welcome.

Bob Russell, executive director of the Oregon Trucking Assocations, said his organization "has not indicated its support for any alternative to the Newberg-Dundee Bypass, "nor have we provided any financial backing."

None of the other groups cited by Youngman as backers immediately returned calls.

Sterling Anderson, Marion County's planning manager, said that even if sufficient funding is found, the Coastal Parkway will run into significant legal and regulatory obstacles.

State requirements mandating that exclusive farmland remain in parcels of at least 80 acres, for instance, would have to be addressed, since a new road running through the middle of that land would create two parcels of 40 acres each, he said.

In addition, the need to build a new bridge crossing the Willamette River, and perhaps the Yamhill River, would present huge hurdles for developers.

"This would be the biggest, most significant land-use case the county has dealt with in my 26 years here," Anderson said. "And the biggest road project since I-5 was built."

State Transportation Department officials have sat in on several of Youngman's presentations, but said it's too early to assess the project's chances of success.

"We're treating it as if it were a private development," said Tim Potter, ODOT's Area 3 Region 2 manager. "When it's to the point they want to talk seriously about traffic impacts and the exact locations of tying into our road system, we'll roll up our sleeves and get serious."

Local residents, meanwhile, say that French Prairie farmland is not for sale, certainly not for a new highway.

"Farmers here are united," said Marcie Garritt, a St. Paul resident and member of the town's planning commission. "Whether the route would cross their land or not, they all agree -- you don't do this to farmland."

-- Dana Tims

Study of non-toll plan for 281 nixed

The fact the MPO could not get a single contractor to do an independent study for a non-toll option on 281 (and 1604 was added by an amendment by Rep. David Leibowitz) shows the whole process is severely tainted and that non-toll options will not be given any serious consideration as federal law requires. It's obvious that road builders know if they dare give an honest analysis or put forward an independent non-toll option for 281 (for which there already is one, see the plans here: www.281overpassesnow.com), they'll never get another job in this town again.

The obvious answer is to update the TxDOT plan from 2001 that was already adopted by the MPO for 5 years and promised and promoted in public hearings. There is also another more recent plan done in 2005 that can also be used as a non-toll plan. As a last resort, the MPO can always find a contractor outside Texas politics to do an independent non-toll plan. The cancellation of a non-toll plan OUTSIDE the control of the tolling authority, the RMA, displays the pathetic state of transportation in Texas today. I don't know which is worse, the power TxDOT and the toll authority wields or the gutless crowd of contractors we have...

Toll road study axed but alternatives still on the table
By Vianna Davila - Express-News
03/29/2010

The long-awaited resolution to the battle over tolls roads still hasn't come — yet.

In December, members of the Metropolitan Planning Organization board authorized a study to determine the cost differences between toll and nontoll alternatives on U.S. 281, after a heated public meeting last fall over the board's transportation options.

But by a February deadline, no consulting firms had stepped up to do the study, leaving the board back where it started.

At MPO's transportation policy board meeting on Monday, officials decided to rely on the Alamo Regional Mobility Authority's environmental impact statement — a three-year study that will ultimately recommend an option on U.S. 281 and how to fund it.

The environmental study will examine three main construction options: an expressway, which could include a combination of high-occupancy toll lanes and nontoll lanes similar to those in Houston; an elevated expressway, which also would include a similar combination of high-occupancy toll and nontoll lanes; or an overpass expansion, a plan that currently does not include tolls and would have the smallest physical impact, said RMA Executive Director Terry Brechtel.

For the rest of the story, go here.

San Diego privatized toll road goes belly-up

The South Bay Expressway foreign-owned toll road is the new poster child for the failed policy of road privatization. Up until now, most "conservative" and libertarian think tanks have promoted PPPs (public private partnership) as the "free market" solution to transportation finance. I've said all along it's no such thing. They're government sanctioned monopolies and this editorial states it.

It also notes the flaw in raising toll rates when traffic drops, which is the exact opposite of a free market response to fewer customers. To increase demand they need to lower not increase toll rates. Yet what did the North Texas Toll Authority, a publicly run toll entity (so this problem isn't just with privatized toll roads), do when its toll road system experienced a decline in traffic? Raised its rates by 32%! The new generation of toll roads that have relied on "innovative financing" (ie - taxpayer subsidized toll roads, often co-mingled with private money) find themselves consistently upside down on their debt despite the taxpayer bailouts that help front the construction costs. We're creating an infrastructure bubble that will be deemed too big to fail that will require even greater taxpayer bailouts if we allow this tax raid to continue. I have yet to see any data that shows increasing the cost of transportation (toll taxes on top of high gas prices) helps the economy either.

Also, this article mentions a study TxDOT did that admits toll roads are based on FLAWED traffic projections (that are kept secret until after the contracts are signed). This is precisely what we tried to stop in SB 792 from 2007 (the counterfeit CDA moratorium) that allowed these traffic and revenue studies (toll viability studies that give the traffic estimates) to stay secret until AFTER the contract is signed. We tried to remove this provision from the bill, and only got 19 votes (so much for a conservative majority that should be for OPEN GOVERNMENT, especially the kind that saves taxpayers money). This must be changed. We've long held that it violates federal law, NEPA, anyway. Revealing these flawed traffic projections BEFORE going to contract will help us ferret out the truly viable (and sensible) toll projects from those that aren't which are being propped up by HEAPS of taxpayer subsidies (gas taxes, Texas Mobility Funds, Prop 14, Prop 12, stimulus money, TIFIA loans, PABs, etc., up front) that end up going bankrupt anyway.

We're going to continue to work against this mythical "free market" concept of public private partnerships (called CDAs in Texas). It's a fad whose time has ended!

Link to article here.

Tuesday, March 30, 2010

EDITORIAL: The trouble with tolls

THE WASHINGTON TIMES

A toll-road project in San Diego, once held up as a model of the "innovative" public-private partnerships, collapsed last week.

The South Bay Expressway filed for Chapter 11 bankruptcy protection after being open for business less than three years. Proponents of the tolling fad insist that allowing private companies to charge motorists to drive on roads represents the free-market solution to all of our transportation funding woes. The South Bay Expressway failure shows that plan is a road to nowhere.

Thanks to gasoline prices around $3 a gallon and the ongoing recession, hard-pressed consumers weren't interested in shelling out an additional $4.50 to drive 10 miles. Macquarie Infrastructure Group, the Australian firm that owns the expressway, assured federal highway officials that 60,000 paying customers would use the road daily. In fact, only 22,600 did so, leaving the project without enough revenue to sustain its debt obligations.

It turns out that estimates based on rosy scenarios are the norm in the world of tolling schemes. A Texas Department of Transportation study completed last year found that a majority of toll-road projects overestimated traffic levels in the first five years by at least 20 percent to 30 percent. Because public transportation agencies generally cut deals with private tolling companies behind closed doors, such detailed forecasts are not available for public review until long after the contract is signed.

Plunging traffic is also the norm nationwide. The Pocahontas Parkway in Richmond reported a 12 percent drop in traffic last year. Transurban, the Australian company that owns the road, responded by raising prices every year since 2008 and is scheduled to continue doing so until 2016. Dulles Greenway traffic is similarly down 7.2 percent, and Macquarie has put in motion a series of regular price hikes.

In a true free-market environment, the projects would follow the law of supply and demand, dropping rates to attract new customers. Instead, the foreign companies operating these roads are hiking tolls as fast as they possibly can - the opposite of what one would expect in a truly competitive marketplace.

Toll roads get away with this conduct because they are state-sanctioned monopolies, not free-market operations. Bureaucrats and politicians turn to public-private partnerships because they, in effect, outsource unpleasant revenue-raising duties to private companies. As we see from the South Bay Expressway, the deals governments strike with companies to perform this task frequently are based on faulty, unsustainable assumptions.

We hope Virginia Gov. Robert F. McDonnell heeds this lesson and drops his support for the foolhardy plan to impose tolls on the Interstate 95/395 high-occupancy vehicle lanes.

________________________________________________________________

Link to article here.

PFI - First US TIFIA road files for protection
Reuters - Thursday, March 25

NEW YORK, March 24 - South Bay Expressway, the first US toll road to tap the federally subsidized TIFIA loan program, has filed for bankruptcy protection. The 9.3-mile electronic tollroad is located in southern California.

Toll collections have been dramatically under projections since the road opened in late 2007. The road is owned by Macquarie funds - 50% by Macquarie Infrastructure Partners, the US fund owned by large institutional investors and 50% by the Australian listed Macquarie Atlas Roads.

South Bay Expressway currently has US$340m outstanding of a US$400m construction loan converted into a term loan facility according to bankruptcy filings. The term loan was arranged in 2003 with BBVA as admin agent and Depfa as co-lead, and matures in 2021. Other lenders to the project include Allied Irish, Bank of Ireland, BNP Paribas , Commonwealth Bank, DVB Bank, DZ Bank and HSH Nordbank.

In addition, South Bay took out a US$140m, 35-year TIFIA loan, under which the first mandatory interest payment was due in 2011. That facility now totals US$170m after the capitalization of US$30m in interest.

South Bay sought bankruptcy protection after attempts to negotiate a settlement with ORC, a contractor to the tollroad, failed to result in a settlement. ORC has made claims totaling US$600m, which is disputed by South Bay Expressway.

__________________________________________________________________

Link to article here.

Toll road builder files for Chapter 11
The Newspaper.com
March 24, 2010

Toll increases were not enough to save the company that built the South Bay Expressway from bankruptcy.

The 10-mile toll road in San Diego was built in 2007 by California Transportation Ventures, a group that eventually became South Bay Expressway Ltd. The group is a subsidiary of toll operator Macquarie Infrastructure Group of Australia, the same Macquarie that holds stakes in the Indiana Toll Road, Chicago Skyway and Dulles Greenway.

South Bay Expressway Ltd. filed for Chapter 11 bankruptcy reorganization in recent days according to the San Diego Union Tribune.

Company officials had projected 60,000 vehicles per day using the roadway, but daily traffic in 2009 averaged just 22,600.

The roadway will remain open as the company restructures $510 million in debts.

Land Line Magazine reported throughout 2009 that the South Bay Expressway was falling behind in traffic counts and that the company would have lost money if it had not raised tolls.

“Apart from the toll increases, traffic volumes on South Bay Expressway continue to be impacted by the weak regional housing market and a slowdown in economic activity which has also led to a decline in Mexican border crossings,” company officials stated in a 2009 financial report.

Macquarie-operated roadways have relied on toll increases – most of which have been guaranteed in contracts with state entities – to stave off financial losses.

South Bay Expressway Ltd. is less than three years into its 35-year agreement to operate the tollway. Caltrans is scheduled to take over operations in 2042.

The $635 million expressway was one of the first toll roads in the U.S. to use federal tax dollars under the Transportation Infrastructure Finance and Innovation Act – or TIFIA – program developed by the Federal Highway Administration.

– By David Tanner, associate editor

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

Investors seek farm land grabs, water rights

Link to article here.

The footprint for the Trans Texas Corridor (TTC) land grab of over 580,000 acres of private Texas farm and ranch land may be taking shape through various means. This article explains how the TTC is very much alive and well, not only in Texas, but also in Canada and Mexico and everywhere in between. The article below speaks of investors seeking to buy-up U.S. farm land and seek farmers' water rights. Beware!

Hancock ag investors eyeing more farm deals

Reuters | 17 March 2010

by Carey Gillam

Investors are growing more bullish on U.S. farmland as softness in some sectors spurs increased competition for buying quality acres, a top U.S. agricultural investing group said on Wednesday.

New hedge fund players were among a range of large and small investment groups participating in farmland dealings, Jeff Conrad, president of Hancock Agricultural Investment Group, told the Reuters Food and Agriculture Summit in Chicago.

“There is more competition,” said Conrad, who oversees Hancock’s $1.2 billion of agricultural investments in the United States, Australia and Canada. “We are definitely seeing more deal flow.”

Notably, capital flow is increasing from overseas, in particular from Europe, Asia and the Middle East, Conrad said.

The market action is accelerating to the level where Conrad sees portfolio trading opportunities and potential development of a real estate investment trust.

The interest in buying farmland comes amid a decline in commodity prices tied in part to a global glut of key crops like corn and soybeans and diminished corn-based ethanol demand.

Conrad said the Hancock group’s return was down last year to 7.6 percent from 18 percent in 2008 as commodity prices fell and land values flattened. He is cautiously projecting continued single digit returns again for 2010.

Still, the group’s client base, which is made up of pension funds, large taxable investors and funds of funds, continues to grow, Conrad said.

“Our investors are very long-term oriented,” Conrad said. “Typical farmland provides very attractive current income that is what institutional investors are looking for.”

OPPORTUNITIES IN SOFT SECTORS

Conrad said his investment group was finding some opportunities where previous investors had bought land intending to convert it to commercial property but were stymied as credit dried up and the economy swooned.

The group is also finding good values in farmland in Idaho were the dairy industry is struggling, and remains very active in the U.S. Midwest, the heart of corn and soybean production.

As well, the group is looking to deepen its presence in the California vineyard sector, another area that has been struggling through the recession due to falling demand for wine.

“There has been a glut of wine for the last few years so that is a sector we like,” Conrad said.

The Hancock group is a unit of the Hancock Natural Resource Group, an indirect wholly-owned subsidiary of Manulife Financial Corporation (MFC.TO) (MFC.N). In addition to the row crops and wine, Hancock is heavily invested in specialty crops such as almonds, walnuts, cranberries, apples, pistachios and macadamia nuts.

Cranberries and pistachios provided double-digit returns in 2009 while apples and almonds did poorly, according to Conrad. Cranberries appear to be softening, however, with more supply building up inventories amid limited exports.

One key area for investing now is a rush to lease or buy water rights, Conrad said. Water is a key resource for agricultural production and scarcity concerns coupled with a growing world population makes water control critical.

“That pattern is just going to become more and more common,” he said.

The United States and its technologically advanced farming systems do not offer the same high rates of potential return as some investors are seeking in Brazil and other countries, Conrad said.

But the more mature market does offer solid long-term opportunities and Hancock has no plans to extend its investments outside the United States, Australia and Canada.

“Our plan is to build out the countries we’re in right now,” he said.

(Reporting by Carey Gillam; Editing by Tim Dobbyn)

Trans Texas Corridor still alive

Trans Texas Corridor routes moving at freight train speed
By Terri Hall
Mar 20, 2010
Houston Examiner

After Rick Perry's highway department announced the Trans Texas Corridor (TTC) route known as TTC-35 was "dead" in 2009, we find out post-election in 2010 that it, along with free trade, is very much alive and well. Canadian officials have shown renewed interest in a multi-modal trade corridor along I-35. Winnipeg recently announced its intention to build an inland port similar to those in San Antonio and Dallas. One such inland port in Kansas City has ceded sovereign United States territory to Canada and Mexico with the flags of all three countries flying over it. Officials in Winnipeg said it also intends to run a logistics and trade corridor to include rail and high speed highways all the way to Mexico as an Asia-Pacific gateway connecting to Toronto and Montreal.

It should surprise no one that former San Antonio Mayor Phil Hardberger and tolling authority (Alamo RMA) Chairman Bill Thornton took a trip to Toronto in 2006, partially at taxpayer expense, to promote Trans Texas Corridor-style trade connections and to be certain it includes the Port of San Antonio.

Norris Pettis, Canadian Consul General in Dallas, notes in the latest San Antonio Business Journal that "of all the urban centers I deal with, San Antonio is right up there in preaching free trade." The article also said Canadian officials observe an anti-trade sentiment in the U.S. as a whole, but see an open door in Texas, which they say doesn't share "protectionist policies."

Read the rest of the story here.

London tube line’s public private partnership in the hole

Link to article here.

This is another example of how a so-called "public private partnership" (PPP) actually means PUBLIC money for PRIVATE profits rather than the "partnership" taxpayers were promised, one where the private entities put up the money and take all the risk. A legal ruling deemed that the private contractor, Ferrovial (parent company to Cintra, the Spain-based company involved in several PPPs in Texas), does not have to upgrade the system, taxpayers do. Even worse, this also demonstrates that once the government gives away control of our infrastructure to private corporations, it has little recourse to protect the public interest. The private entities write these iron clad contracts to protect their interests, leaving taxpayers holding the bag. We have yet to see one PPP deal that worked out well for the taxpayers in any country. PPPs are just one more scam to give private corporations free access to taxpayers' wallets using government-sanctioned monopolies in the name of "free market."

Boris Johnson told he must plug £460m tube funding gap
Arbiter of public-private partnership rules that London Underground contractor Tube Lines should not have to make up shortfall in budget
By Dan Milmo
guardian.co.uk
Wednesday 10, March 2010

Boris Johnson must make cuts to London's public transport network or postpone improvements to one of the capital's busiest underground lines after he was told to plug a £460m funding gap in a controversial public-private partnership.

The London mayor said taxpayers were being asked to "write a blank cheque" to fund Tube Lines, the last surviving PPP contractor responsible for maintenance and upgrades on three tube routes: the Jubilee, Northern and Piccadilly lines.

In a final ruling today, the arbiter of the PPP contracts, Chris Bolt, said Tube Lines's work programme over the next seven and a half years should cost £4.46bn. The publicly owned London Underground, which still runs the tube network on a day-to-day basis, must fund the work and has budgeted only £4bn for it – leaving a shortfall of £460m on its already stretched balance sheet.

Johnson, who ultimately controls LU and its parent Transport for London, said he would consider taking legal action against Bolt, who rejected demands that Tube Lines fund the difference by raising debt privately. Instead, Bolt said TfL should either cut back on an upgrade to the Piccadilly line – the only tube link to Heathrow airport – or find cost cuts elsewhere in its £9bn annual budget.

"Londoners will also be outraged that the tube upgrades promised to them are now threatened," said Johnson. The mayor claimed that Tube Lines's co-owners, Ferrovial, the Spanish owner of Heathrow airport, and Bechtel, the US project management specialist, would be paid £400m in management secondment fees by 2017.

"In other countries this would be called looting, here it is called the PPP," he said.

But Bolt rejected the management fees argument, saying that Ferrovial and Bechtel managers were helping to keep down overall costs and, without them, the maintenance and upgrade work could cost more than £4.46bn.

Andrew Cleaves, Tube Lines's acting chief executive, said delaying an upgrade to the Piccadilly line was one option for closing the funding gap. Bolt has already asked the Department for Transport whether funding set aside for purchasing new Piccadilly line trains, believed to be about £500m, could be used to plug the gap.

"There are many different variations around timing that we can work through with London Underground, including the timing of the fleet and the upgrade. That's the sort of thing I want to sit down with London Underground about and discuss," said Cleaves.

The Piccadilly upgrade is due to deliver faster and more frequent trains on the route by 2014 and failure to deliver it on time raises the threat of overcrowding on an already busy line.

The Tube Lines boss also denied that the ruling would threaten the company's viability. Tube Lines had originally argued that the work should cost £5.75bn and faced an even greater funding shortfall than LU, which prompted Tube Lines directors to discuss whether the company is a going concern at a recent board meeting.

Johnson's funding options are becoming increasingly limited after the DfT said it would not reopen a 2007 funding settlement that awarded TfL £40bn until 2017. Lord Adonis, the transport secretary, is adamant that TfL cannot increase its borrowing to fund the £460m gap.

Sidebar

Important Information

Forbes: Toll roads prohibit China from benefiting from its highway system

Over 300 properties to be condemned for 290E toll project

PA State Auditor blasts Turnpike Authority for "gambling" with taxpayer money

Tea Parties bring critical mass to fiscal issues

Perry breaks state law, fails to report stimulus money

New diversion of road tax discovered, citizens demand end to diversions

SHAKEDOWN: Blagojevich bribed road contractors on Illinois toll project

Goldman Sachs accused of defrauding investors

Dixon: We need principled road policy

Toll reader mistakes digits, bills & fines WRONG driver

PPP planned for Oregon bypass through farmland

Transportation Secretary: End to favoring motorized transportation with gas taxes

Trinity toll road farce

Privatized toll road goes bankrupt using taxpayer money

Proposed toll road through prime farmland in Oregon draws ire

Study of non-toll plan for 281 nixed

San Diego privatized toll road goes belly-up

Investors seek farm land grabs, water rights

Trans Texas Corridor still alive

London tube line’s public private partnership in the hole

Subcategories

Eminent Domain

Trans Texas Corridor

Public Private Partnerships

Regional Mobility Authority

Metropolitan Planning Organization

Climate Policy

Video

Latest News

Latest Press Releases