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Follow TURFUs motorists rage over toll rates on foreign-owned road
Though we're not opposed to completely private roads that use no eminent domain, no public money, and have no non-competes prohibiting the expansion of public free roads, this private toll road operated by Macquarie still draws the same sort of backlash and protest. The most telling part of this story is the very last sentence. Macquarie declares it doesn't need to listen to the public because, "We're not a public entity." That sums up why we cannot let Texas roads fall into the hands of private entities...we lose control over the level of taxation, plain and simple.
US motorists rage against Macquarie toll
By Simon Mann
Sydney Morning Herald
March 28, 2011
Drivers are avoiding the Australian-run Dulles Greenway in Virginia amid anger over its high costs, writes Simon Mann in Washington.
Australian investors are being accused of highway robbery by motorists in Virginia who blame Macquarie Group for what they say are exorbitant road tolls.
The complaints have been taken up by a member of the US Congress and Virginia's transport authorities who have agreed to set up a committee to look at ways of making the 22-kilometre Dulles Greenway "more user-friendly".
But the prospect for lower tolls is poor. The road, one of the most expensive in the US, charges up to $US5.25 for car journeys but has not paid a dividend to its owner, Macquarie Atlas Roads, for the past three years. Some residents and local companies have boycotted the road - choosing traffic jams on alternative routes - and week-day traffic volumes fell 3 per cent last year. Despite this, toll increases helped lift income by 1.8 per cent.
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"Either way, residents and businesses lose while a foreign company profits," said Congressman Frank Wolf. "It is my hope that this advisory committee will introduce Toll Road Investors Partnership II [the Macquarie-run local operator] to the concept of being accountable to the people it claims to serve."
The road rage is being reflected in online postings, too. "The only way to affect the way the Aussies conduct business is to Not use the Greenway," one motorist urged.
But the man who runs the road, Tom Sines, chief executive of TRIP II: "We are a toll road and, sure, people don't like to pay tolls and there's probably very little we can do to put lipstick on that pig, so to speak."
Built in the mid-1990s, the Dulles Greenway stretches west from Washington's international airport (named after the 1950s secretary of state John Foster Dulles) to Leesburg, coursing through Virginia's fast-growing Loudon County.
It connects with the state-owned Dulles Toll Road that runs east to the US capital, which levies tolls at much lower rates. Revenues from that road are being used to subsidise the cost of building a rail link from Washington to the airport, and tolls are expected to rise over time. Together, the two roads form State Route 267.
Macquarie bought the Greenway in 2005, subsequently spending big on improvements in return for tolling proceeds through to 2056. Its interest in the road is divided 50:50 between two of its managed funds, Macquarie Atlas Roads and Macquarie Infrastructure Partners. Other assets include toll roads in Chicago and Indiana, as well as private roads in Britain and continental Europe.
The locals' anti-Australian sentiment has not been confined to Macquarie. Transurban Group, part of a consortium building so-called HOT (high-occupancy toll) lanes on Washington's beltway and on interstate highways 95 and 395, has also been caught up in local politics, with councils and residents wary of government dealings over the projects.
So incensed were Arlington County officials that at one point they filed a lawsuit saying that the I95 and I395 legs of the Transurban project were "racist" because they stood to benefit "more affluent, largely Caucasian citizens". Bemoaning a lack of transparency and suspected government subsidies for the road builders, one local editorial observed sharply: "Under current market conditions the private sector would never finance such a risky, uneconomic concept. That means Virginia taxpayers likely will pay a $US250 million subsidy
for the privilege of being tolled by Australians."
The sniping comes amid renewed interest across the US in privately funded infrastructure projects as cash-strapped states battle to balance budgets that have been crippled by the US economic slump.
The downturn, along with petrol prices pushed beyond $US1 a litre by Middle East tensions, is also hurting tollroad operators nationwide. But a prime criticism of the Dulles Greenway is that it does not incorporate distance pricing that would allow it to charge less for short trips. In some cases travelling barely two kilometres attracts the maximum toll. The road has few electronic tag readers and relies heavily on cash collection points.
But TRIP II's Sines says that adding more electronic toll points would cost an estimated $US6.5 million, while distance tolling could ultimately hurt revenues. He says the company might be interested if authorities pitched in upfront and were willing also to "backstop against any lost revenue".
But Wolf says this attitude reveals a loyalty to the operator's foreign masters and that TRIP II is not interested in "protecting current users or attracting new users" of the road. The community advisory committee would aim to "make the road more user friendly and potentially provide [toll] relief''.
However, tolls on the road are set, ultimately, by Virginia's State Corporation Commission, which must approve any increase. They were last raised at the beginning of last year.
Sines is frustrated by the criticism of the six-lane divided roadway, which pays state property tax, leasing charges and is a big donor to community projects. It also pays $US700,000 a year for police patrols. "We're a business, and Congressman Wolf has to realise we're a business," he says.
"We're not a public entity."