Drive Now, Pay Later
Builder financing, private operators, more tolls: Is "borrow and spend" right for taxpayers?
Gov. Charlie Crist declared that he wanted DOT to focus on congestion, but he didn’t mention anything about money. The backlog of projects is in the tens of billions, and no one is proposing more taxes. What to do?
[Art: Todd Davidson/ Getty]
In Miami, DOT is putting together a “public-private partnership” to build a tunnel from Interstate 395 to the Port of Miami so trucks won’t have to go through downtown. It’s a $900-million project, but the builders are putting up part of the money, to be repaid through tolls they will collect for 35 years, after which point the tunnel reverts to DOT.
DOT is resisting the most drastic privatizing — selling off existing roads to private owners to raise money for future projects, as has happened with the Chicago Skyway toll road and the toll roads around Dulles Airport in Virginia. Florida has focused on enlarging private involvement in new projects that get more roads built faster.
Two years ago, DOT’s eminently knowledgeable financial guru, Assistant Secretary Lowell Clary, was in a cautious mood over the prospect of privately built or privately financed roads, wondering exactly what the advantage would be. Today he is talking about financial “hedging,” “shadow tolls” and “innovative financing.” He predicted “deal flow very soon.”
On a panel with Clary at a July meeting of the Florida Transportation Builders Association (FTBA) were representatives of Goldman Sachs, the Carlyle Group, MacQuarie Securities (a subsidiary of an Australian bank), and Itinere (a subsidiary of an $8-billion Spanish construction conglomerate). TEAMFL, the association of toll road authorities, lists among its new members the Bank of America and Merrill Lynch [“For Whom the Tolls Swell,” April 2006, FloridaTrend.com].
They are all elbowing their way into the hot new business called “public-private partnership,” known as PPP or P3 in industry jargon. Crist’s secretary of transportation, Stephanie Kopelousos, has declared Florida “a good business climate for P3s.”