U.S. Toll Roads — Making Money For Whom?
In recent years, some U.S. transportation authorities have sold outright their stake in local toll roads to foreign corporations. The results are rarely pretty. Transurban and Macquarie Infrastructure Group, both Australian firms with highly leveraged U.S. holdings, have posted major losses for the year ended June 30, 2009.
Transurban, who owns the Pocahontas Parkway in Richmond, VA and is also building High Occupancy Toll lanes in Virginia, reported a A$16.1 million loss. Macquarie, owner of the Indiana Toll Road (better known as I-80 to some) as well as the Dulles Greenway in Virginia and the Skyway in Chicago, lost A$1.7 billion.
The phrase “revenue maximization” has popped up in the quotes from spokespersons from both companies. Generally, this means hiking the tolls that are already imposed on drivers and reducing customer service / information technology budgets. Transurban and Macquarie both point to recent traffic trends that show signs of higher usage of toll roads as another reason they expect to return to profitability soon. Don’t expect toll reductions when that happens.
In a disturbing turn of events, certainly for Texas taxpayers, the Regional Transportation Council (RTC) of the North Texas Council of Governments is paying out a multi-million dollar concession prize to an unsuccessful bidder on a toll road project. Spanish company Cintra Concesiones de Infraestructuras de Transporte was awarded $3.6 million by the RTC as a stipend for their losing bid on constructing a 26-mile extension of State Highway 121. Part of the rationale for the payment was that the costs to Cintra for loan applications related to the project would have been backed by federal taxpayers. Texas Governor Rick Perry, who backed the Cintra bid throughout the evaluation process, approved legislation that authorized unlimited compensation to losing bidders on toll projects.
In related news, U.S. Senator Kay Bailey Hutchinson recently announced her plans to unseat fellow Republican Perry as Texas governor. One significant plank of her campaign platform, Hutchinson said, is “… to return to our tradition of free, quality highways and roads.” She singled out Perry’s “land grab” transportation policies as the Texas Department of Transportation’s “arrogance” in promoting toll roads despite public sentiment to the contrary.