Congress meets with investment bankers profiteers about P3s

Link to article here.

Members of congress are sitting down with investment bankers to ask them how well public private partnerships are working out for the taxpayers. Really? These are the very scoundrels ripping us off charging toll fees in excess of $23/day and congress gives what they say credibility with this charade?

No Simple Calculation in Comparing Public, Private Investment
By Tom Curry
Roll Call
June 17, 2014

When members of the House Transportation and Infrastructure Committee conferred with investment bankers in New York on Monday, one question they wrestled with was how to compare the cost-effectiveness of traditional infrastructure investment (states or other government entities issuing bonds to pay for projects) with public-private partnerships — PPPs or P3s — that give private investors stakes in toll roads and other projects.


Rep. Scott Perry, R-Pa., asked a panel of investment bankers and one academic urban planner “how public infrastructure projects and facilities are evaluated for efficiency and, if there is such a model, do you folks have it?” He wondered, “Are we just now starting to figure that out” and “is there any metric” that determines cost, risk, and efficiency for public projects compared to private ones.

Cintra facing bankruptcy on Indiana Toll Road, too

Link to article here.

Indiana Toll Road operator facing debt woes
Associated Press
Indianapolis Business Journal
June 19, 2014

A state agency says it is monitoring the Indiana Toll Road operator's finances as it works to make an upcoming debt payment on the financing of its $3.8 billion lease payment to the state eight years ago.

The Indiana Toll Road Oversight Board has asked the Spanish-Australian investor group Cintra-Macquarie about the status of the payment it owes this month after state officials made similar inquiries after news reports that it was struggling last year to make an interest payment, board Director James McGoff told The Times of Munster.

The case for a higher gas tax

Link to article here.

The reason Americans won't go for a gas tax hike is the amount of wasteful spending with our existing road taxes. When they divert massive amounts of money to boondoggles like commuter rail, street cars, and hike & bike trails ($48 million in just the next 4 years in San Antonio, TX alone), why would anyone in their right mind agree to give the government more of their hard earned money?

3 reasons a higher gas tax would benefit drivers
By Rick Newman
June 19, 2014
Daily Ticker

Americans tend to regard cheap gasoline as a national birthright. So go ahead and hyperventilate for a moment before considering the alien idea that maybe it would be good to pay a bit more for gas.

Now for the unhappy news: A new bipartisan bill in Congress would raise the federal gas tax by 12 cents per gallon, in two annual hikes of 6 cents each. The reason for this sure-to-be-unpopular plan is that the Highway Trust Fund, which pays for interstate highways and other important parts of the nation’s road network, is out of money. That leaves a choice between taking the needed funds from other programs (every one of which has powerful protectors in Washington) or foregoing road-building and maintenance.

The Highway Trust Fund is meant to be financed by the federal gas tax, which is now 18.4 cents per gallon (and 24.4 cents for diesel). The last time Congress raised the gas tax was in 1993, and inflation has since eroded its current value to about 11 cents, according to the Government Accounting Office. Congress has gotten in the habit of backfilling shortfalls in the trust fund from general tax revenues (which mostly come from personal income taxes), but that exposes highway construction and maintenance to all the dickering and delay voters find infuriating about Washington.

The new bill’s two sponsors — Republican Sen. Bob Corker of Tennessee and Democrat Sen. Chris Murphy of Connecticut — want to eliminate perennial shortfalls in the Highway Trust Fund by indexing the gas tax to inflation, so the tax would rise every year by the same proportion as overall prices. The odds of the bill passing before the November midterm elections seem low, but they might improve next year.

Here’s why the higher tax would be good for drivers:
We have to pay for roads and bridges somehow. Most drivers recognize the value of good roads and structurally sound bridges — especially when potholes start to swallow their tires and detours around failing bridges take them far out of their way. An efficient road network is also an economic necessity, since truckers need to move goods around and commuters need to get to work. Shortchanging transportation so motorists can save a few bucks today will backfire, even on drivers who think they can’t afford the tax or shouldn’t have to pay.

Alternatives to a higher gas tax are worse. The gas tax isn’t perfect, but it does a pretty good job of imposing the cost of building and maintaining roads on the people who use those roads. Using income tax proceeds (or worse, borrowing) to pay for highways spreads the cost to people who don’t even use them, such as urban residents and non-drivers.

Besides, other schemes for financing roads have their own problems. One alternative to a higher gas tax, for instance, is more toll roads, which are also unpopular and penalize drivers who have no choice but to use such roads. Another idea: Congestion fees, which would apply to drivers who use roads during peak driving times — and seem unfair to people who have no other way to get to work except driving during rush hour. Public-private funding arrangements might make sense, except Congress seems to have no interest in taking up such legislation. And one high-tech solution is to attach tracking gizmos to every car in America, to measure “vehicle miles traveled,” or VMTs, and assess fees based on actual road use — since nobody in America minds if the government follows their every move.

You might not even notice. Americans have been driving less, on average, and burning less gas, for a variety of reasons: Fuel economy has improved considerably and will continue to do so, on account of aggressive new government MPG targets. The exodus of people from cities to suburbs and exurbs has reversed, with more people living closer to where they work. And financial pressure has simply forced some people to plan driving trips more efficiently and find other ways to save on gas.

Gas prices overall have generally been rising, because oil prices have been rising and a limited supply of refineries in the United States tends to keep gasoline supplies tight. Even so, a 12-cent gas tax hike could easily be offset by better fuel economy. Since 2010, for instance, average fuel economy has risen from 22.1 MPG to 25.6 MPG. For an average driver logging 12,000 miles per year and paying $3.50 for gas, the savings from fuel economy alone during that time are $260 per year. If a 12-cent gas tax suddenly kicked in, the savings would still be $204. And if that new tax revenue helped repair roads, it might mean fewer potholes, fewer car repairs and a smoother trip to work, too.

Pocahontas reverts to its creditors

Link to article here.

Pocahontas 895 toll road under a new operator
Australian company previously controlled Pocahontas 895
BY MICHAEL MARTZ
Richmond Times-Dispatch
June 17, 2014

Pocahontas 895 has a new operator, a year after an Australian company walked away from a long-term concession for the underperforming toll parkway across the James River between Henrico and Chesterfield counties.

DBi Services, based in northeastern Pennsylvania, quietly assumed control of the parkway — the first road built by public-private partnership in Virginia — on May 15 and informed local government officials two weeks later.

The company took over operation from Transurban, an Australian company whose board of directors voted last June to transfer control of the highway to a consortium of European banks that holds $300 million in debt on the project, not including a $150 million federal loan that must be repaid.

Congressman DeFazio announces plans to pay for roads and bridges

Link to article here.

Congressman DeFazio announces plans to pay for roads and bridges
By Reed Black
Land Line Now Magazine
June 16, 2014

Last week, U.S. Rep Peter DeFazio, D-Ore., announced his plan for paying for roads and bridges.



It calls for eliminating the gas tax at the pump and taxing oil at the refinery level instead. The oil tax would be indexed to increase with inflation, and the oil companies could pass along the cost of the tax to consumers.



DeFazio says the 24-cent federal tax on diesel would remain, but would be indexed so that truckers would not pay a disproportionate share.



DeFazio told “Land Line Now” on Sirius XM that the alternative to his plan is a nation of toll roads.



Indiana Toll Road Remains Contentious Infrastructure Financing Case

Link to article here.

Indiana Toll Road Remains Contentious Infrastructure Financing Case
By Tom Curry
Roll Call
June 17, 2014

For Rep. Michael E. Capuano, the senior Democrat in a group of House Transportation Committee members that met with New York investment bankers Monday, the key private infrastructure investment case that needs explaining is the 2006 lease of the Indiana Toll Road by a group of investors including Macquarie Atlas Roads, created by the Macquarie Infrastructure Group, an Australian firm.

As states take a keener interest in public-private partnerships to pay for infrastructure, “the first major one in the country that I remember was the Indiana Toll road and, as I sit here today, I still do not have answers” on the benefits and costs of that deal, Capuano, D-Mass., said during the discussion.

“It’s a relatively straight-up project, it’s not like a water project that might be complicated, it’s not unique” and yet, he complained, there’s not enough data on the cost of the project.

“I need to be able to compare how many cars and how much toll money was being generated before it was sold, and how many cars and how much toll money now. Kind of simple. And we [the Transportation and Infrastructure Committee] haven’t gotten them.”

“If the cars aren’t there [on the toll road], where did they go? And if they’re going on to another road, is that road now need more infrastructure upgrades? Does that other road now have time constraints, now people are being backed up? What about its impact on the rest of our infrastructure? I don’t know the answer,” he said after the event.

Karl Kuchel, chief operating officer of Macquarie Infrastructure Partners in New York, did give the committee members some insights at the roundtable event Monday.

The traffic numbers for the Indiana toll road “are below the projections that were used for the original transaction” in 2006, Kuchel said.

When the Indiana Toll Road transaction was financed, private investors made a $3.8 billion payment to the state of Indiana. Traffic “has not performed to the level of our expectations — no surprise given the economic conditions from when the transaction was completed in 2006 to today.”

But he said, “None of that downside reverts to the public sector. That [loss] goes to equity in the first instance and then to the lenders. So it’s a private-sector risk at the time the transaction was financed. A view was taken on traffic. The present value of that was paid over [to the state] in the purchase price — and the equity and debt holders have to live with that.”

He said the Brisbane, Australia, tunnel example cited to the committee by Columbia University urban planning Professor Elliot Sclar as a case of another private infrastructure investment gone awry was in the same category. It was financed with private money, the project was delivered “and then traffic did not meet projections. From the public-sector perspective, if you wanted to be glib, you would actually say that they [the public] received a piece of infrastructure at well below the cost of its procurement. Because the private sector took the risk on traffic, financed 100 percent of it, and as it turns out, the traffic is not sufficient to justify the return.”

He added, “This is what risk is – and the private sector tries to price it.”

Despite some disappointments, there are still reasons to do private-public partnerships, Kuchel suggested.

He argued that “competition is a powerful driver of efficiency in these transactions. As somebody who invests private capital, PPP transactions can take sometimes years and millions of dollars just to submit a bid. You want to know as you’re going through that process, what the parameters are … and you want know that you will be competitive and hopefully successful. That drives you constantly to be looking at ways in which you can deliver the project more efficiently” – and the cost savings hopefully can be paid through to the taxpayers.

TxDOT approves $97 million for El Paso street car

Link to article here.

When TxDOT wastes our road money on silliness like street cars that don't solve (and actually cause) traffic problems, they're never going to win back the public trust or get their cooperation to give them more money. Street cars were removed for safety concerns and the fixed track became obsolete and replaced by more nimble and flexible buses. It's lunacy to install them again and waste taxpayer money on such nonsense when this same agency is whining for more money & claiming we can't get our roads widened without paying expensive tolls.

Funding approved for Downtown streetcar line
Work could begin on $97M project this summer
By Robert Gray
El Paso Inc.
June 29, 2014

A $97-million project to restore streetcar service to Downtown El Paso has received state funding and construction could start as soon as August.

Sometimes called trolleys, the streetcars were a part of life and work in El Paso until the early 1970s.

Returning streetcar service to Downtown has been a dream of many for a long time, but the project had been stymied for years because there had been no funding.

Cintra grabs I-77 public private partnership in NC

Link to article here.

I-77 tolls could be $9 to $11, study says
By the Charlotte Observer
Monday, June 23, 2014

A Mooresville-to-Charlotte round trip on planned Interstate 77 toll lanes is projected to cost $9 during the morning rush hour and at least $11 in the afternoon, according to state documents obtained by a Lake Norman area citizens group.

Widen I-77, which opposes tolls on N.C. interstates, obtained the documents through a Freedom of Information Act request.

The documents predict that Mooresville-to-Charlotte tolls will jump to at least $20 one way by 2035, according to the group.

Local leaders question toll plans on US 75

Link to article here.

State, county leaders question proposed toll lanes along U.S. 75
By JULIETA CHIQUILLO
Dallas Morning News
July 2, 2014

RICHARDSON — Several Collin County and state officials voiced concerns Tuesday about TxDOT’s plans to turn HOV lanes into toll lanes along a section of U.S. Highway 75.

The elected officials were among more than 120 people at the Richardson Civic Center for a public meeting about the proposal.

Under a plan unveiled last month, single-occupancy vehicles would be allowed to use the managed HOV lanes by paying a toll. Car poolers would have to register to use the lanes for free. The plan involves a stretch of U.S. 75 beginning near LBJ Freeway and ending in Allen.

Obama highway plan called 'crazy'

Link to article here.

OBAMA: My Highway Plan Is 'Not Crazy, It's Not Socialism, It's Not The Imperial Presidency'
By Brett LoGiurato
Business Insider
July 1, 2014

A rather exasperated President Barack Obama pressed Congress to find a solution to the looming Highway Trust Fund crisis, arguing "it's not socialism" to want to build new highways and bridges in the country.

"It's not crazy. It's not socialism. It's not the imperial presidency," Obama said Tuesday afternoon during a speech in front of the Georgetown waterfront with the Key Bridge in the background. "We're just building roads and bridges, like we have for the past 50 years."

Toll Roads, State Gas Tax Hike Discussed by Legislature

Link to article here.

It's important to note that Donna Campbell campaigned on an anti-toll platform. Now she's calling for toll roads to be part of the mix in conflict with her own party's gubernatorial candidate Greg Abbott who promises to fix Texas roads without raising taxes, fees, or tolls.

Toll Roads, State Gas Tax Hike Discussed by Legislature
By Jim Forsyth
June 24, 2014

Lawmakers now say it will take between $4 billion and $5 billion a year to simply maintain the state’s crumbling road system, and state lawmakers are considering the possibility of a hike in the gas tax, 1200 WOAI’s Chris Fox reports.

Calls to reform federal transportation spending before tax hikes

Link to article here.

Here’s a Crazy Idea: What About Reforming Transportation Spending Instead of Hiking Taxes?
By Emily Goff, Heritage Foundation
June 26, 2014
Daily Signal

Americans know the drill. When Congress faces a gap between its spending wants and available money, it is quick to ask for more money, instead of fixing the spending side of the budget ledger.
This time it’s Senate Finance Committee chairman Ron Wyden, D-Ore., who has proposed a rag tag group of revenue provisions, including hiking taxes on heavy vehicle use, aimed at filling a hole in Washington’s Highway Trust Fund (HTF). Federal gas and diesel taxes deposited in to the HTF go to pay for road, bridge, transit, and other surface transportation projects in the states.
Yup, you got it: Wyden’s focusing on new ways to collect money – without even mentioning spending reforms.

Conservatives on the committee rightly grumbled at its total lack of spending cuts, and now the committee is going back to the drawing board to try and find more palatable reforms all around.
Wyden isn’t alone: Others in Congress have called for gas tax hikes or bailing out the fund with postal reform revenue. But few have proposed reforming spending out of the HTF. In other words, lawmakers by and large aren’t interested in, changing which programs are eligible for the federal gas and diesel taxes deposited into the HTF.

Lawmakers on collision course with taxpayers on transportation

Link to article here.

Lawmakers on collision course with taxpayers on transportation
By Terri Hall
Examiner.com

It’s been quite a week for transportation in Texas. Senate Transportation Committee Chair Robert Nichols held two interim hearings on highway funding. The first was a lovefest over public private partnerships (P3s) that hand public roads to private corporations who extract extremely high toll rates. The committee, which barely gained a quorum, heard invited testimony from the Texas Transportation Institute (TTI) and three toll authorities about various P3 projects that are advancing. You would think P3s are the greatest thing since cars were invented. The second was a hearing on the state of transportation funding in Texas, the same song as the House Transportation Committee hearing a few weeks ago about the fiscal cliff coming in 2015.

Cintra teetering on edge of bankruptcy on SH 130

Link to article here.

Cintra teetering on edge of bankruptcy on SH 130
By Terri Hall
Examiner.com

It’s hard to resist the temptation to say I told you so. Moody’s reports SH 130 private toll operator Cintra is scrambling to avoid default on the first public private partnership (P3) in the state of Texas. The Spain-based company in partnership with Zachry American Infrastructure is seeking to restructure its over $1 billion in debt and delay its June payment or face default. In less than two years in operation, the southern 41-mile stretch which opened in October 2012 with much fanfare and boasting by Governor Rick Perry now faces bankruptcy.

Abbott has signed off on contracts for big campaign donor

Link to DMN story here.

Wendy Davis is under investigation by the FBI for conflicts of interest with her private law firm representing the North Texas Tollway Authority while also a member of the Transportation Committee that oversees NTTA legislation,  so this appears to be written from a press release by the Davis campaign to deflect her own troubles to try to make Greg Abbott appear to be involved in shady dealings approving a NTTA contract that benefited a campaign donor.

However, by law the AG has to review and sign-off on such contracts, and it’s important to note his office does not determine who gets the contracts, the state agencies who submit them to his office choose the contractors. So there’s no way those campaign contributions could have influenced Abbott’s office. State agencies put out the contracts to bid and select the contractors, so they serve as a third party buffer between the AG and the contractor in this case. We’re no fans of Linebarger and its corrupt practices of trying to buy influence, but in this case, the story seems like an attempt to smear when there’s no real money trail of undue influence to the AG here.

Abbott has signed off on contracts for big campaign
By CHRISTY HOPPE
Austin Bureau
Dallas Morning News
June 16, 2014

AUSTIN — The attorney general’s office under Greg Abbott has approved more than $3 million in state contracts for a law firm that has been a generous political contributor — providing $200,000 to Abbott’s campaigns in the past 12 years.

SHOCK: Houston toll agency surrenders control to TxDOT

Link to article here.

Houston toll agency surrenders control to TxDOT
By Terri Hall
Examiner.com
June 17, 2014

The US 290 project in Houston used to be held up as an example of local-state cooperation on how transportation projects could be accelerated back in 2012. But that was then and this is now. Last week, the Harris County Commissioners Court approved a deal that cedes control of several Houston-area toll projects to the Texas Department of Transportation (TxDOT), a state agency infamous for its penchant to impose tolls on Texans.

The Houston Chronicle suggested that the deal could mean more free lanes on the U.S. 290 project, but don’t hold your breath. TxDOT has discovered how to self-fund its agency with unlimited taxation through tolls. The Commissioners approved a deal that would hand over not only the U.S. 290 toll lanes, but also cede the managed toll lanes on I-10 to TxDOT as well. The county would still receive one-third of the I-10 toll revenues, but the state would gobble-up the rest. The rub that caused the rift on U.S. 290 was over entrance/exit ramps from the inner toll lanes. Local taxpayers will still be subsidizing the toll lanes and will be charged again to actually use the lanes.

Deal with Cintra in N. Carolina for I-77 will soak commuters

Link to article here.

It's outrageous that any state DOT would hand over a major interstate based on a single bid! Even worse that they'd donate the right-of-way purchased with taxpayer money and taken with eminent domain to a private corporation! Private toll roads are the MOST expensive way to expand roads and are a threat to property rights. Commuters will be fleeced with $20/day tolls by this private foreign corporation whom they cannot hold accountable in any way. Losing control of our public roads is criminal malfeasance.

NCDOT Toll Lanes Deal with Cintra Would Slam Commuters
June 10, 2014
by Kurt Naas
Watchdog Wire

In early April the NCDOT announced they had selected Cintra, a Spanish company, as the contractor for the I-77 toll lane project. As it turns out, the Cintra bid was the only one received. Under the terms of the contract, NCDOT will donate the remaining public right-of-way  and grant Cintra an exclusive concession to design, build and operate toll lanes along the Lake Norman stretch of I-77 for the next 50 years. The NCDOT noted Cintra’s proposal had been subject to an extensive review of over 300 pass/fail criteria, and the Cintra package met all of them.

Dallas to charge solo drivers to use HOV lanes

Link to article here.

Officials even admit the HOV lanes on LBJ are 'underused.' In other words they're admitting the failure of government social engineering. So what;s their solution? More social engineering, higher taxation, and manipulation. The whole impetus for this plan is due to a private, foreign toll corporation, Cintra, who operates the new toll lanes on I-635. TxDOT wants every HOV lane that potentially feeds into the privately-run toll lanes to allow single occupancy drivers like Cintra's lanes in order to encourage more drivers to pay them tolls.

It's key to note TxDOT will be operating and profiting off these HOV lanes (that taxpayers have already built and paid for), not the North Texas Tollway Authority. So TxDOT will be able to make money off this scheme without accountability to local taxpayers. Rather than restrict the use of these lanes to those who can afford tolls or who have the ability to carpool (which aren't many based on their own admission), they should be opening them up to ALL motorists. It's yet another way to extort money from taxpayers by an unelected commission.

Plan will admit solo drivers to HOV lanes... for a price
by DAVID SCHECHTER
WFAA.com
June 9, 2014

DALLAS — In North Texas, every square foot of pavement is precious real estate to help keep us moving. That’s why underused HOV lanes on LBJ Freeway are getting a closer look from the Texas Department of Transportation.

By early 2016, on drivers in "single occupancy vehicles" (SOVs) on LBJ between Interstate 30 and North Central Expressway will be able to pay a still-undetermined amount to drive in the High Occupancy Vehicle (HOV) carpool lane. The concept is called "managed lanes."

Poll: New Yorkers don't want tolls

Link to article here.

There ya have it, voters instinctively know the best deal, and that’s raise the gas tax rather than pay tolls to build and maintain our road and bridges. Tolls are prohibitively expensive compared to a gas tax system and particularly detested when imposing tolls on something that is already traveled for free now. No tolls on existing free infrastructure.

Quinnipiac: Voters say no to East River tolls
By Celeste Katz
New York Daily News
June 16, 2014

New Yorkers think slapping a toll on the East River bridges is an incredibly bad idea, a poll released Monday finds -- unless the cost of crossing other interborough spans falls at the same time.

By a margin of 71% to 23%, according to a new Quinnipiac University poll, city voters slam on the brakes when asked if the currently free bridges should be taxed.

Voters buck the idea 49% to 41% if bridges outside Manhattan were to be tolled at a lower rate at the same time.

Opposition to the idea stretches across all five boroughs and extends to both drivers and mass-transit users, Quinnipiac found.

Whether they use their cars or ride the rails, voters overwhelmingly agree traffic is a serious city problem.

When it comes to how to pay for maintaining roads, bridge, and public transportation, 26% prefer hiking the state gas tax, 23% suggest adding tolls to bridges into Manhattan, and 18% think an increase in the city sales tax would be best.

Quinnipiac polled 1,033 city voters from June 5-9. The survey has an error margin of 3.1 percentage points.

House bans license plate readers: The road to toll collection threatens liberty

Link to article here.

House bans license plate readers: The road to toll collection threatens liberty
By Terri Hall
Examiner.com
June 16, 2014

The U.S. House of Representatives passed an amendment barring any federal funds from being used to buy equipment or store data collected from license plate readers. Congress had previously banned any federal funding of red light cameras, but Rep. John Fleming (R - Louisiana) decided to expand the ban to include automatic license plate reader cameras, too.

He cited the threat to personal liberties, especially in light of the National Security Agency’s collection of phone data on innocent Americans. License plate readers can collect data that tracks personal movements, and they can record intimate details such as where one worships or receives counseling, etc. Fleming and the majority of his colleagues agreed, 255 to 172, that the risks to personal privacy and freedom do not outweigh any benefits.

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