Harris County plays Texas hold 'em
Texas’ toll route
Jun. 24, 2006
Fort Wayne Journal-Gazette
Copyright 2006
Indiana and Texas – traveling at dramatically different rates of speed on toll-road privatization – chose different routes this week. Which state made the better choice might not be known for many years, but it’s clear that Texas spent more time studying the road map.
In January, just a day after Gov. Mitch Daniels unveiled the “astounding sum” offered by the top bidder for the Indiana Toll Road, the Harris County (Texas) Board of Commissioners authorized a $1 million study of options for its own 83-mile toll road system. While that study was under way, Indiana lawmakers argued over how to spend $3.8 billion and approved the governor’s Major Moves plan. Objections from Democratic legislators and a lawsuit filed by lease opponents presented only minor roadblocks.
Tuesday, with results of the Texas study in hand, the Harris County commissioners voted unanimously to continue operating their toll road system instead of selling or leasing it to private investors. The investment consultant’s report advised that the county could increase profits by imitating a private firm’s practices.
“Now we can erect a sign on the toll roads: ‘Not for sale, not for lease,’ ” said Commissioner Steve Radack.
The study concluded that the Harris County Toll Road Authority would have to give up most of its control over rate increases to secure the best price for a sale or lease. JP Morgan and Popular Securities advised the county officials that they could have gotten as much as $20 billion for the Houston-area toll road system.
The same day Texas officials chose the exit ramp for privatization, the Indiana Supreme Court accelerated Daniels’ plan by rejecting legal arguments raised by opponents of the Indiana Toll Road lease. By upholding a ruling that says the plaintiffs must post a $1.9 billion bond to proceed, the court effectively killed the lawsuit. The state is now set to collect $3.8 billion from Cintra-Macquarie, the Spanish-Australian consortium that will run the Toll Road for the next 75 years.
The “astounding sum” will, indeed, present a major boost for the state’s long-delayed road-building and improvement efforts. Hoosiers can expect to see benefits soon – particularly given the interest Republican lawmakers have in proving to voters their Major Moves support was warranted.
But the deal’s success can’t be fairly judged before Nov. 7, or even in the 10 years it will take to spend the lease proceeds. The real test will come in the decades ahead. Will the private operator maintain the Toll Road without continual legal pressure by the state? Will the communities bordering the Toll Road face court battles each time they propose new roads or improvements to roads that might draw drivers away from the toll booths? Will northern Indiana residents ultimately bear the full cost of the deal in the form of toll increases?
The Harris County decision offers an interesting view of the road not taken. We’ll keep watching.
© 2006 Fort Wayne Journal Gazette: www.fortwayne.com
Jun. 24, 2006
Fort Wayne Journal-Gazette
Copyright 2006
Indiana and Texas – traveling at dramatically different rates of speed on toll-road privatization – chose different routes this week. Which state made the better choice might not be known for many years, but it’s clear that Texas spent more time studying the road map.
In January, just a day after Gov. Mitch Daniels unveiled the “astounding sum” offered by the top bidder for the Indiana Toll Road, the Harris County (Texas) Board of Commissioners authorized a $1 million study of options for its own 83-mile toll road system. While that study was under way, Indiana lawmakers argued over how to spend $3.8 billion and approved the governor’s Major Moves plan. Objections from Democratic legislators and a lawsuit filed by lease opponents presented only minor roadblocks.
Tuesday, with results of the Texas study in hand, the Harris County commissioners voted unanimously to continue operating their toll road system instead of selling or leasing it to private investors. The investment consultant’s report advised that the county could increase profits by imitating a private firm’s practices.
“Now we can erect a sign on the toll roads: ‘Not for sale, not for lease,’ ” said Commissioner Steve Radack.
The study concluded that the Harris County Toll Road Authority would have to give up most of its control over rate increases to secure the best price for a sale or lease. JP Morgan and Popular Securities advised the county officials that they could have gotten as much as $20 billion for the Houston-area toll road system.
The same day Texas officials chose the exit ramp for privatization, the Indiana Supreme Court accelerated Daniels’ plan by rejecting legal arguments raised by opponents of the Indiana Toll Road lease. By upholding a ruling that says the plaintiffs must post a $1.9 billion bond to proceed, the court effectively killed the lawsuit. The state is now set to collect $3.8 billion from Cintra-Macquarie, the Spanish-Australian consortium that will run the Toll Road for the next 75 years.
The “astounding sum” will, indeed, present a major boost for the state’s long-delayed road-building and improvement efforts. Hoosiers can expect to see benefits soon – particularly given the interest Republican lawmakers have in proving to voters their Major Moves support was warranted.
But the deal’s success can’t be fairly judged before Nov. 7, or even in the 10 years it will take to spend the lease proceeds. The real test will come in the decades ahead. Will the private operator maintain the Toll Road without continual legal pressure by the state? Will the communities bordering the Toll Road face court battles each time they propose new roads or improvements to roads that might draw drivers away from the toll booths? Will northern Indiana residents ultimately bear the full cost of the deal in the form of toll increases?
The Harris County decision offers an interesting view of the road not taken. We’ll keep watching.
© 2006 Fort Wayne Journal Gazette:
posted by Porkus Maximus Tex: at Saturday, June 24, 2006
<< Home