"In Mussolini's Italy, such ['public-private'] partnerships were called "consortia" and provided the economic foundation for his regime."
Stop the great auction
February 6, 2007
The Valley Independent
Bank of America, Bear Stearns, Goldman Sachs and numerous foreign banks/investment firms are interested in leasing the 537-mile Pennsylvania Turnpike.
The state is considering leasing to plug a $1.7 billion shortfall in transportation funding, the taxpayer-financed infrastructure is being sold to generate revenue for cash-strapped jurisdictions.
On a single day in June 2006, an Australian-Spanish partnership paid $3.8 billion to lease the Indiana toll road. An Australian company bought a 99-year lease on Virginia's Pocahontas Parkway, and Texas officials decided to let a Spanish-American partnership build and run a toll road from Austin to Seguin for 50 years.
Also, tolls from the U.S. side of the tunnel between Detroit and Windsor, Canada, go to a subsidiary of an Australian company which owns a bridge in Alabama and a 99-year lease on the eight-mile Chicago Skyway for $1.83 billion. The buyer was the same consortium -- Macquarie Infrastructure of Sidney, Australia, and Cintra Infraestructuras de Transport of Madrid, Spain -- that leased the Indiana toll road.
These selling/leasing deals could turn into ripoffs. As an example: Macquarie-Cintra could make $133 billion over the 75-year life of the Indiana toll road lease, which got Indiana $3.8 billion. In five to 10 years, all that money is gone and the tolls keep rising and the money keeps flowing into foreign coffers or large Wall Street investment groups.
The question is what gives government the authority to sell roads and bridges built with public money to anyone. This trend of selling is fueled by mismanaged jurisdictions that cannot tax enough revenue out of the people to provide services and keep vital infrastructure in good working order. Selling roads and bridges seems like a good idea because investors are willing to pay high prices for them and the money and be used to finance urgent public works projects and pay for improving the one in public domain.
Some think privatizing public infrastructure like roads, bridges, electric supply facilities, mass transit, ports, waterways, schools, prisons, etc. is a good idea because private enterprise is more efficient than government.
Let's question the intelligence of selling them. Number one, investment corporations are flush with record profits and cash as a result of free trade and globalization as the rank and file gets left behind.
Secondly, foreign interests -- as investment firms, foreign central banks and foreign royalty are buying up vital components of national infrastructure. It would seem the first order of national security would be to maintain domestic control over ports, waterways, roads and utilities. But instead Americans are prohibited from boarding an airplane with bottles of water.
There are not set qualifications for potential buyers, and most of the road leases/buyouts have non-compete in them which prohibits the seller from upgrading existing roads that would compete against their toll road, forcing cars and commercial truck traffic to use their toll roads at whatever tools they wish to charge.
These firms are using the term "public-private partnership" as a description of nominally private corporate concerns that work closely with government. This is what we call corporatism -- government that has the power to tax, regulate, subsidize, control and ultimately destroy -- is invariably the senior partner. In Mussolini's Italy, such partnerships were called "consortia" and provided the economic foundation for his regime. In World War II, Germany had the industrial complex. Not that they both failed.
It is expected that the federal highway funds will dry up by 2010. With proper management by Pennsylvania, cost cutting and the elimination of money-losing services and projects, we can stop the great auction.
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