Corzine wants a New Jersey turnpike with bottomline mentality but state owned
Posted Tue, 2007-06-19 10:11
New Jersey Governor Jon Corzine has reassured US House transportation chair James Oberstar he won't have any objection to what he'll propose to do with the New Jersey Turnpike. Oberstar along with coauthor congressman Pete DeFazio has been penning warnings to state governors not to do bad toll concessions or PPPs with investor groups, saying he will work to "undo" any such contracts from his perch in the US Congress.
Oberstar in Newark NJ yesterday to make a speech to a local group said Corzine administration officials had told him: "Don't worry. We're not doing any of those things you warned about in your letter."
Meanwhile Corzine was reported in the Star-Ledger newspaper as saying yesterday he was "dotting the I's and crossing the T's" on his plan, and was checking it with different constituencies in the federal government.
Corzine is quoted: "We would like to create a public benefit corporation with tax-exempt status. A 'company' that operates with a bottom line mentality but the dividends go to the public."
The existing New Jersey Turnpike Authority (NJTA) is a public benefit corporation with tax exempt status, and the extent to which it operates with a bottom line mentality is up to its board of directors and management and their incentives. Political appointees normally are incentivized to go along with the short term political needs of those who appointed them, rather than the bottom line. Without having shares that shareholders can buy and sell, and without any value in the capital markets their board of directors and management don't have any reason to focus on the bottom line or return on investment.
Their accounts and financial reports don't even allow any easy reading of what their return on investment is.
The only dividends that go to the public are dividends of publicly traded companies. In theory every New Jersey taxpayer is a "shareholder" in the NJTA, but this is semantic theory only, since they can't sell their "shares" so-called if they are dissatisfied, or buy more if they are bullish about the Turnpike. And no challenge to management is possible by people prepared to put their money where their mouth is and launch a takeover bid. Shareholders so-called don't elect the board of the NJTA.
Bottomline mentality is hardly consistent with a restriction on operating beyond the confines of a single state as is the case with most American public toll agencies. Real bottomliners like be able to think and go beyond state (and national) lines.
Maybe the NJ Governor has in mind something like the pre-2000 European arrangement in which Autostrade, ASF, Brisa and other tollsters sponsored by European governments were structured as for-profit companies subject to corporate law, traded on the stock exchanges, but having the majority of their stock owned by the state or state agencies. The Italian tollster, Autostrade while it was still majority owned by the state in the mid-1990s was, after all, running operations at the Dulles Greenway tollroad in northern Virginia.
TOLLROADSnews 2007-06-19
New Jersey Governor Jon Corzine has reassured US House transportation chair James Oberstar he won't have any objection to what he'll propose to do with the New Jersey Turnpike. Oberstar along with coauthor congressman Pete DeFazio has been penning warnings to state governors not to do bad toll concessions or PPPs with investor groups, saying he will work to "undo" any such contracts from his perch in the US Congress.Oberstar in Newark NJ yesterday to make a speech to a local group said Corzine administration officials had told him: "Don't worry. We're not doing any of those things you warned about in your letter."
Meanwhile Corzine was reported in the Star-Ledger newspaper as saying yesterday he was "dotting the I's and crossing the T's" on his plan, and was checking it with different constituencies in the federal government.
Corzine is quoted: "We would like to create a public benefit corporation with tax-exempt status. A 'company' that operates with a bottom line mentality but the dividends go to the public."
The existing New Jersey Turnpike Authority (NJTA) is a public benefit corporation with tax exempt status, and the extent to which it operates with a bottom line mentality is up to its board of directors and management and their incentives. Political appointees normally are incentivized to go along with the short term political needs of those who appointed them, rather than the bottom line. Without having shares that shareholders can buy and sell, and without any value in the capital markets their board of directors and management don't have any reason to focus on the bottom line or return on investment.
Their accounts and financial reports don't even allow any easy reading of what their return on investment is.
The only dividends that go to the public are dividends of publicly traded companies. In theory every New Jersey taxpayer is a "shareholder" in the NJTA, but this is semantic theory only, since they can't sell their "shares" so-called if they are dissatisfied, or buy more if they are bullish about the Turnpike. And no challenge to management is possible by people prepared to put their money where their mouth is and launch a takeover bid. Shareholders so-called don't elect the board of the NJTA.
Bottomline mentality is hardly consistent with a restriction on operating beyond the confines of a single state as is the case with most American public toll agencies. Real bottomliners like be able to think and go beyond state (and national) lines.
Maybe the NJ Governor has in mind something like the pre-2000 European arrangement in which Autostrade, ASF, Brisa and other tollsters sponsored by European governments were structured as for-profit companies subject to corporate law, traded on the stock exchanges, but having the majority of their stock owned by the state or state agencies. The Italian tollster, Autostrade while it was still majority owned by the state in the mid-1990s was, after all, running operations at the Dulles Greenway tollroad in northern Virginia.
TOLLROADSnews 2007-06-19