The Highwaymen
Why you could soon be paying Wall Street investors, Australian bankers, and Spanish builders for the privilege of driving on American roads.
"the road is one succession of dust, ruts, pits, and holes." So wrote Dwight D. Eisenhower, then a young lieutenant colonel, in November 1919, after heading out on a cross-country trip with a convoy of Army vehicles in order to test the viability of the nation's highways in case of a military emergency. To this description of one major road across the west, Eisenhower added reports of impassable mud, unstable sand, and wooden bridges that cracked beneath the weight of the trucks. In Illinois, the convoy "started on dirt roads, and practically no more pavement was encountered until reaching California."
It took 62 days for the trucks to make the trip from Washington, D.C., to San Francisco, and another 37 years for Ike to complete a quest, inspired by this youthful journey and by his World War II observations of Germany's autobahns, to build a national road system for the United States. In 1956, President Eisenhower signed the Federal-Aid Highway Act, which called for the federal and state governments to build 41,000 miles of high-quality roads across the nation, over rivers and gorges, swamps and deserts, over and through vast mountain ranges, in what would later be called the "greatest public works project in human history." So vital to the public interest did Eisenhower, an old-style fiscal conservative, consider the interstate highway system, he even authorized the federal government to assume 90 percent of the massive cost.
Fifty years to the day after Ike put his pen to the Highway Act, another Republican signed off on another historic highway project. On June 29, 2006, Mitch Daniels, the former Bush administration official turned governor of Indiana, was greeted with a round of applause as he stepped into a conference room packed with reporters and state lawmakers. The last of eight wire transfers had landed in the state's account, making it official: Indiana had received $3.8 billion from a foreign consortium made up of the Spanish construction firm Cintra and the Macquarie Infrastructure Group (mig) of Australia, and in exchange the state would hand over operation of the 157-mile Indiana Toll Road for the next 75 years. The arrangement would yield hundreds of millions of dollars in tax breaks for the consortium, which also received immunity from most local and state taxes in its contract with Indiana. And, of course, the consortium would collect all the tolls, which it was allowed to raise to levels far beyond what Hoosiers had been used to. By one calculation, the Toll Road would generate more than $11 billion over the 75-year life of the contract, a nice return on mig-Cintra's $3.8 billion investment.
The deal to privatize the Toll Road had been almost a year in the making. Proponents celebrated it as a no-pain, all-gain way to off-load maintenance expenses and mobilize new highway-building funds without raising taxes. Opponents lambasted it as a major turn toward handing the nation's common property over to private firms, and at fire-sale prices to boot.
The one thing everyone agreed on was that the Indiana deal was just a prelude to a host of such efforts to come. Across the nation, there is now talk of privatizing everything from the New York Thruway to the Ohio, Pennsylvania, and New Jersey turnpikes, as well as of inviting the private sector to build and operate highways and bridges from Alabama to Alaska. More than 20 states have enacted legislation allowing public-private partnerships, or P3s, to run highways. Robert Poole, the founder of the libertarian Reason Foundation and a longtime privatization advocate, estimates that some $25 billion in public-private highway deals are in the works—a remarkable figure given that as of 1991, the total cost of the interstate highway system was estimated at $128.9 billion.
On the same day the Indiana Toll Road deal closed, another Australian toll road operator, Transurban, paid more than half a billion dollars for a 99-year lease on Virginia's Pocahontas Parkway, and the Texas Transportation Commission green-lighted a $1.3 billion bid by Cintra and construction behemoth Zachry Construction to build and operate a 40-mile toll road out of Austin. Many similar deals are now on the horizon, and mig and Cintra are often part of them. So is Goldman Sachs, the huge Wall Street firm that has played a remarkable role advising states on how to structure privatization deals—even while positioning itself to invest in the toll road market.
Goldman Sachs' role has not been lost on skeptics, who accuse the firm of playing both sides of the fence. "In essence, they're double-dipping," says Todd Spencer, executive vice president of the Owner-Operator Independent Drivers Association, a truckers' group that opposes toll road privatization. "They're basically in the middle, playing one side against the other, and it's really, really lucrative."
Despite such concerns, the privatization model has the full backing of the Bush administration. Tyler Duvall, the U.S. Department of Transportation's assistant secretary for transportation policy, says dot has raised the idea with "almost every state" government and is working on sample legislation that states can use for such projects. "This is a ground battle in the United States right now," he says. "States just need to be convinced that this is basically something they should be considering."
The financial stakes are potentially huge. "You're buying the infrastructure of the economy, and it's enormously valuable," says John Schmidt, who served as associate attorney general in the Clinton administration and as counsel to the city of Chicago on the $1.8 billion privatization of the Chicago Skyway, the 7.8-mile freeway that connects the Dan Ryan Expressway in the west to the Indiana Toll Road in the east. "[Private road operators] haven't been able to get in here previously. There's been a demand, and it's been bottled up because we just haven't had privatized infrastructure in this country, so they've been buying toll roads in Chile and in France. Now, they suddenly have the opportunity to come into this country."
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THE USA IS THE ABOUT THE ONLY CIVILIZED[AS IN FLUSH TOILETS] COUNTRY I KNOW THAT ALLOWS PIRATES IN PUBLIC OFFICE TO RUN THINGS. SHAME ON YOU STUPID PEOPLE! YOU GET WHAT YOU DESERVE!
Isn't this the same crowd that bought up Russia's assets when it fell? Only in our case the vultures aren't waiting till we're dead.
And what about global warming? Higher price to drive leads to less driving. The ironic thing is that this may be a very progressive thing. If government is barred from building roads, they're not barred from building rail systems. Or running buses over those privatized highways.
This is the way that nothing useful gets done in this country. It's like the gas tax -- Republicans hate taxes in any form, Democrats say it'll hurt the poor. In this case, Republicans love roads, Democrats hate deals with large private corporations, and Ralph Nader just hates everything, period (never mind that he, of all people, should be in favor of discouraging driving).
We need to start analyzing things rationally, not emotionally. Chicago got a bad deal, and so did Indiana. But France didn't, and Spain didn't. Just because our politicians are idiots doesn't mean that private highways are a bad idea. Let's not throw out the baby with the bathwater.
Republican ideology led to us underfunding Amtrak. Green ideology led to us not starting a single nuclear plant. Meanwhile, France generates 80% of its electricity from carbon-free nuclear power, runs its high-speed trains on carbon-free nuclear-generated electricity (displacing airplanes which emit carbon). And, guess what, has a private system of toll roads. People think twice about using the roads rather than taking the train. (Ditto Spain, where Cintra is from.)
Let's have a laugh at Chicago and Indiana's expense, and then go focus on the larger picture. If our own city or state privatizes something, let's make sure not to get screwed money-wise, but let's not hold onto highways just 'cause it feels weird to sell them off.
This article reads like a Channel 5 news expose, all full of indignation and lacking in context. (Like the TV news report that questioned why Zipcar, the big bad private corporation, was given "free on-street parking." Hello?! Zipcar discourages people from owning cars, isn't that a good thing?)
I think MIG-Centra is getting a bad deal. If they were to put their $3.8 billion into any sort of investment instrument, they would make far more than $11 billion over 75 years. This is not taking into account their maintenance expenses. Am I missing something?
Ike charged the Bonus Marchers as a young cavalry officer, loved the Autobahn just like Lucky Lindy loved the Luftwaffe and now we are selling off our infrastructure like Mobutu sold off the wealth of the Congo. I am filled with civic admiration!
Aren't the "highwaymen" who want to privatize America's highways the same folks who are "protecting" us by blowing the [deleted] out of Iraq? Doesn't it ever dawn on the poorly educated minds of U.S. citizens that just maybe, the trillion dollars we threw away on this fiasco in Iraq could have rebuilt our national highway system? Just how proud can educators be, that citizens graduating from our high schools and universities, continue to vote for neo-cons while happily driving their SUV's down the road? No doubt, the ACLU has reaped what it has sown, replacing Jesus' human rights morality of reason with a "science" without moral compass, that creates mass pollution, nuclear bombs and the gas-guzzlers of GM and Ford Motor Company.
I see this barn wall with words painted on it - rules the Animals will live by on the Farm.
I see these animals trying to read the rules painted on the barn wall. I see these pigs sneaking in under cover of night to change the rules.
Why do I feel like the cows and chickens and the horse in Animal Farm listening to Goldman Sachs tell me why selling our roads to foreign companies (the infrastructure to our economy, someone called it) is a GOOD thing?
Well, folks this is "democracy" on the march. Or more precisely, this is capitalism, which we say is what we applaud as a nation.
Well, those who have money control the "free market" and since the USA is going bankrupt conducting an immoral and illegal war (in addition to our numerous other pork barrel giveaways to ensure political reelection) and doesn't have any money, its a buyer's market for those with the dough!!
When this country decided to replace private sector mass transit with public roads after WW II it was not only an environmental disaster, but an economic one as well. Thank God for Harley Staggers D-WV) and his deregulation bills which saved private sector freight railroading. We have a reasonably secure private freight system which can sustain itself.
The best thing which could happen would be the privitization of Interstate Highways. Among a variety of virtues, perhaps the most significant would be the private operators' ability to charge truckers for road damage, whereas now the motoring public subsidizes the big rigs.
My God to get groceries or a shirt for my back, I will have to pay toll to get to town...How many State Bridge Inspectors in MN lost their jobs so Pawlentie's cronies could hire on as Private contractors to inspect the Bridges? Privatization really costs.
At this time our Governor and the legislature in Pennsylvania is considering putting a toll on our Interstate 80. The republican representative (Phil English)is trying to stop the proposed toll by introducing a bill to put any money generated by such tolls into a government program to "help workers whose jobs were moved overseas."
Phil English has never tried to help the workers, so I suspect he is in favor of the type of lease MOTHER JONES is talking about.
The choice is to add the tolls or lease to foreigners.
Lew Jeppson voices a popular misconception: "The best thing which could happen would be the privitization of Interstate Highways. Among a variety of virtues, perhaps the most significant would be the private operators' ability to charge truckers for road damage, whereas now the motoring public subsidizes the big rigs." Hey Lew! How do you think all those low priced consumer goods get to where you pick them up for the lowest possible price? It's the big rigs that are subsidizing YOU. Share the road, and the infrastructural cost, or watch your prices rise and rise!
What we are seeing, is the privatization of the Commons [water - waste - schools - roads - bridges - utilities etc].The people have been left totally outside the 'process', except for bearing the costs.Besides tolls, citizens will bear the cost of higher prices for food/goods that are trucked to market. The highway in Indiana, was not Governor Daniel's to SELL! This is [was] an asset paid for by the people. All this back room wheeling and dealing [by the high rollers],if you'll note, never makes the major media.The corporate owned media, keeps these deals [protests] local - least there be a popular uprising. Gone are the days of the muckrakers or a literate society for that matter.How informed are the public on the NAFTA Superhighway, the North American Union or our new money the Amero [reported on BBC News]! Most alarming, is that those on the election circuit, [boring everyone to tears] and the professional politicians, in Foggy Bottom aren't informing their constituents.They're too busy holding slumber parties, or spending nauseating hours drolling over Hillary's cleavage! As for "getting what we deserve" what would William (first comment) suggest. what with DIEBOLD doing the voting and mass protests not being televised? 10 million people, world wide said 'NO' to war, and here we are - five years later, and we can't secure the road to the airport from Baghdad! Try writing to your Congressman about your concern over our highways etc; being sold off to foreign interests, and most likely you'll get back a detailed FORM letter as to why Gay Marriages are the ruination of families. The corporate robber barons - bankers - politicians and shills, are building themselves a Global Plantation - with a race to the bottom in wages. Millions of economic refugees (failed NAFTA) are entering our country, unchallenged, to hurry the plan along. Long gone, are the company towns (Detroit looks like Chernobyl) with their own local uniqueness. If you can keep the populous ripping and tearing at one another (Mexican and U.S. Citizens) nobody will notice the 'FOR SALE' sign on our nation's resources and infrastructure; whose marketing it; and whose profiting? Perfect. I suspect Yellowstone should soon be on the auction block (other national forests). IF we weren't engaged in FOREVER WAR with the few profiting mightily, at a cost of $200,000 per minute, I imagine we could maintain our bridges? With all this money BORROWED, and the interest on this DEBT, approximately $48 million per hour - there goes any chance of those potholes being filled or programs being funded for the states. The Highway Trust Fund, will be (so much for the attentiveness of Congress busy giving themselves YEARLY raises) out of money in 2009 - thus, with this disaster in Minnesota (through negligence) the drum beat will grown louder for PRIVATIZATION a 'win - win' situation for the money men and 'lose -lose' for citizens. Heck, most people are unaware of this taking place in their own communities [privatizing the people's assets] let alone what's ado in Indiana - Pennsylvania - New Jersey etc. Well, one good thing,with all these plans for a NAFTA highway, (foreign owned) four football fields wide [Texans have been demonstrating - not on the news], cutting through farms, ranches etc; its heartening to see that the Supreme Court, phew, took care of the messiness of 'eminent domain'. Now if we could just find that $2.3 Trillion, that former Defense Secretary Donald Rumsfeld, announced on Sept 10 -2001, couldn't be accounted for - we could build NEW bridges instead of patching them! JM
OUTRAGE! these robber barons are scum who think the world is theirs for the taking! this is what starts revolutions. the thieves never seem to realize it until it's too late! the fouth box may be opening soon....
Privatizaton=Pirate-ization
The selling or "leasing" off of public assets to private interests at bargain-basement rates, and giving the private firms the right to impose very high toll-rates is the usual stuff of legend -- the legend of how this country is mis-managed into ever mounting piles of debt and mismanagement. Observers need to pay attention to what has happened in areas where water-utilities have been privatized.
While "Be-Careful-What-You-Wish" has an excellent point about this privatization scenario discouraging auto use, his pro-nuclear stance should include the usual reality checks of heavy government subsidizes, checkered safety records, and no place to put spent fuel (and if Yucca Mountain is ever approved, it has more fault lines through it than anywhere else in this country).
It is heartening that there are those perceptive enough to see that this give-away of public assets to private firms is anything but libertarian, and that REASON FOUNDATION's libertarian claims to a "free market" philosophy is rather silly.
Looks like feudalism is coming back. We are the serfs. Multinational corporations and banks are trying and succeeding in taking control of the arteries that keep America running. How does anyone with a lick of sense believe that private for profit can be in the best interest of the "toll payers". I am so tired of the fear mongering about having government run services. If government jobs pay decent wages, is that a crime? Bring back the work programs of the Depression era. I still enjoy the beauty of their efforts in parks all over the country. I'm sure the billions going to the debacle of "Iraq" could have gone a long way in repairing our infrastructure and paid good wages to Americans. Well now, maybe there would be no bidding and Haliburton et.all. would get the work and screw it all up at our expense. Is there any hope of politicians seeing themselves as serving their constituents instead of the lobbyists. Oh, I rant and ramble, there is so much that needs doing and the masses seems not to heed the dangers coming.
okay, so if they want it this way, okay.
let's make a list of these roads. let's drive on these roads, and when we get to the end, tell the toll collector that since this is a private debt, we are not paying, and it's too bad, if they want to take us to civil court to collect the few dollars, to go right ahead.
let's make this a _bad_ investment for them.
Sadly, leftists have only themselves to blame for the urge to privatize. We wouldn't be here if they hadn't turned our public infrastructure into a huge special-interest hell. Everyone - the contractors, the unions, the lefty politicians - makes out like bandits except the poor working tax-payer who is forced to drive increasingly expensive, poor public infrastructure to his job as tax serf. It's surprising there isn't more privatizing.
If you really believe in public-run services then maybe once, just once, you should care about giving the consumer cost-effectiveness instead of endless pay-offs to public-check-recipients.
$3.8 billion over 75 years, yeilding $11 billion is an annual rate of return of 1.43%. *Not* "a nice return on Cintra's investment." They must have other numbers or uses in mind. On the face of it Indiana is just taking a bunch of off-shore sucker's money.
This sucks. You and I could never raise the same money these people did and ever expect to do the same thing that this people did, though fortunately, we'd never want to.
There's capitalism, then there's legally sanctioned financial plutocracy.
lets just hope that privatization of roads brings in enough public funds to re-institute a usable mass transit rail system. just maybe we'll get lucky enough that prices will rise on subsidized Walmart goods and local companies might actually pop up to manufacture goods instead of giving all our money to China.
however public property should at least be bought by US companies/citizens so when private roads are rendered useless we don't have to buy the land back from foreign investors.
I don't suppose it occured to anyone that these are not our assets to sell?
Not with this generation, when so god damned many have sold themselves.
A Modest Proposal
1)Repeal the Federal gas tax
2)Make the entire Interstate highway network a toll road
3) Contract with Dubai Ports World to operate it
The German Motorways (Autobahns) are the best roads in the world, and thousands of miles of 'no speed limit' quality. These roads are not toll roads or any other private enterprise operated roads. Why are these government roads the best in the world? Is there something to learn from German Road Engineering? and road safety, considrering that these roads are far safer than the US Interstates.
I loved the article but, unfortunately, it may amount to nothing more than preaching to the converted. Uncorrupted lawmakers and the thinking public need to find ways to convince the Wal-Mart Millions what's at stake if they continue to so stubbornly avoid paying up front the true cost of what they are consuming. Big government and high taxes are bad where they do not serve the public interest; but the greedy politicians have clearly demonstrated over the past quarter century how the alternatives can be so much worse!
I see a slippery slope here. We have already burdened future generations with the Iraq bill; do we now want to possible give away one of our major infrastructures to foreign interests.
Once roads are privatized, toll-operators are free to gouge consumers and they won't be able to say a thing about it. You can't complain your politicians -- sorry that road is private for the next 100 years.
In France privatization has led to sky-high prices for driving on expressways. It costs an outrageous $60 to drive from Paris to Cannes, a distance similar to crossing about 2/3 of Texas.
Some people out there say sky-high road prices are a good thing because it will reduce congestion. How? Are people going to stop driving and not go to work?
Now we have free highways, built over many years by taxpaying citizens who thought the highways belonged to all of us. Why is charging people to drive those roads a better deal? Why do mayors, senators, members of Congress think they have the power to make such a change without the vote of the people? They do not own those assets, the taxpayers do. Who gets paid off in these deals besides the brokers who arrange them?? Has everyone gone mad?
Having been born in 1956 to a father who jogged the halls of power, often while I stood by as a casual observer, I have personally witnessed some of the worst of primal human nature in people. The difference in the 60's and now can be summarized simply. Government has always been comprised of many people with awsome ability to lie and make the most sane people believe them. In the past, though, there were enough people of character to impede the progress of those with nefarious plans. Now it seems that we are governed by only people of dark character, and the door is closed to those with any semblence of good in them. We are quickly reaching the point of no return as a people, if those of reason and noble intent connot regain the reins.
when do you call for the professional help for a mentally ill person? public means "owned by all", and there is no room for personal interests b.eing served. again, where are the people who look to public service as a noble thing?
At the core of this and most of the more serious problems our country faces begins and ends with lobbyists. We spoke of the evils of having persons effectively buying influence for the entirety of my formal education in this country. We know that their entire purpose is to ply our representatives with money, to curry favor. My question now is, with all we know, why are people still permitted to 'lobby' our politicians? We know that most people will succumb to greed, so why do we continue to allow it? We must be truly insane. To know how to alleviate perhaps the greatest problem with our method of governence and not take the simple step to remedy it? It begs the question of who is in charge of the assylum? And not one can say he or her is any better than those, nor any more righteous than those who are permitted to perpetrate these things, because it seems we are all fools to believe anything a politician will promise.
What is your source for the $11 billion that Indiana could have possibly received?
A reputable accounting firm in Indianapolis came up with $1.9 billion.
When will we wake up and keep american money in america.first nafta, now sellig off our highways.whats next leasing our political jobs out to foreign countries. You know that would never happen. Or could it happen?
thanks for posting this, i heard about it on globalgrind.com and came here for more info. GG's site has a list of 25 stories that are under the radar, like the one, that we need to know about. check them out
There had been some reports that states "if the states, and federal, goverments pay back and keep out of the Hiway Trust Fund" there would be enough funds the maintain and grow the national hiway system. This of couurse means that the politcos are responsible to the people who elected them, not to the money.
It is rubbish nothink is about highwaymen in this peice. Put in it highwaymen rob traverlers on the road.
You know what? It all boils down to one thing. We, the people in this nation have created this ourselves. We have elected officials to our government that should never have been considered to serve. Their main concern was and is, to fill their own pockets. One for instance is William Jefferson Clinton. This person,and his wife, were and are after one thing. That is to rule the one world government that is being pushed onto us. The Idea began to surface with then Pres. Carter. One world order was mentioned quietly around the world during his admin. That word, has grown more popular over the years. Bill Clinton has done the most any leader has done in this nation. He was a poor man when elected into government in this state of AR. With his dealing in drugs and other non mentionable practices, this man gained enough clout to run for president. The biggest part of his backing came from the Red Chineese. His under the table dealings with the Chineese gave them the Missile guidance systems for pin point accuracy they had been trying to develop for thirty years. Also the decoupling system in their missiles that continued to fail. They were also given the port of Long Beach Ca. I read an article a couple of years ago that the sun comes up on the docks in Long Beach now 30 minutes later due to the height of the shipping containers having to be stored around the port as the Chineese will not take them back.
I followed Bill Clinton's actions from his time at Yale and Cambridge, going to Moscow to protest against the US involvement in Vietnam while our young were being killed there. I watched as he, when Att. Gen and Gov of Ar. did pretty much as he wanted. If you got in his way, you were dead. When he ran for President, I could not understand how he could get into that position, much less when he won election, I could not understand how anyone could vote for an enemy of the state. But they did.Bill Clinton now is wealthy enough to be called a philanthropist. I ask you, where did this money come from? Most came from the Red Chinese, directly and/or indirectly. In these dealings, Wall Mart went from a small three state department chain to the worlds, get that, World's biggest retailer.
You see, we the common people of this nation have to get together and throw out these in government who hate this very nation and what it was built on.
You can blame everyone else, it seems that is the way these days, No one will take the blame for their own actions.
I work the voting polls every election and have for some time. Numerous people come into the voting precinct making this statement,"I do not know who these people are, but I must do my duty and Vote".
You see, for this nation to survive, we the people, must know who and what we vote for. I love this nation and I fear that I have seen it at it's greatest. I saw the decline begin during the seventies. I knew then it was a mistake to allow wages to continue to rise and to allow durable goods into the nation made with near slave wages. The scales don't balance. Too much goes out and none or very little come back. This new stimulus package of approx. 160 billion dollars is coming from China. Monies borrowed. Good for them. Most people will spend this money for goods made in China. Bad for us. The money will have to be paid back with high interest to the Chineese.
I will hush now, could go on and on, however one thing else. I reiterate strongly, WE, THE PEOPLE MUST TAKE THIS NATION BACK FROM THESE DESTROYERS. IF WE DO NOT, WE AS A NATION ARE DOOMED.
Hisemiester
IT IS BORING AND SOOOOOOOOOOOOOOOOOO GAY LIKE YOU WHO ROTE IT LOL
WHAT THE [deleted] IS IT ABOUT IT IS SO [deleted]ING CRAP IT IS A PIECE OF [deleted]ING [deleted]
We are selling out our country piece by piece. That is why in end times, the U.S. is no where in view. We are already down the tubes.
this is not helping me do my home work
Are the authors and supporters of this viewpoint crazy? This "Toll Road would generate more than $11 billion over the 75-year life of the contract, a nice return on mig-Cintra's $3.8 billion investment." That so called "nice return" equates to a return of about 1.5% per year - and that is on revenues, not net income. I wonder which of the critics would accept that kind of return on their 401(k). This reporter could not possibly have his facts correct! No firm, not any, not even LTCM or Bear Stearns would buy this deal!
We all need maps to show us how to stay off those roads.
Public opinion means little or nothing now.
This company is buying out Puget Sound and Energy this will be a disaster they will own our damns and our much of our infastructure with this sale. more informtion on this site. http://www.savepse.org/ Could you please follow up with an article, thank you Vrolijk
This story is written incredibly well for what amounts to a battle over pavement. I live in Indiana and only wish I'd found this article before now. However, learning about the Citizens Action Coalition of Indiana should keep me informed about other anti-democratic undertakings in this state. Thanks for this fine specimen of journalism, Mr. Schulman and Mr. Ridgeway.
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