CIVIL RIGHTS EDITORIAL:Non Discrimination for Roadbuilders – HICSA?

“To help meet the nation’s infrastructure needs we must take advantage of private sector resources by opening up avenues for the private sector to take the lead in designing, constructing, financing and operating highway facilities.

“In most cases the private sector can complete a large scale project faster, better, and cheaper than the government... this nation faces a daunting highway infrastructure shortfall. Closing the gap will require full access private capital as well as government resources. It is critical for the private sector’s considerable resources to be brought to bear to address this problem.

“The HICSA will allow these projects to utilize tax-exempt bond financing – an important financial resource that is available for airport, port facility, highspeed rail and other large scale infrastructure development, yet which remains beyond reach for highway projects.” (Chafee press release 2/25/99)

Terrific words. Look at that first sentence again. It talks of having the private sector “take the lead” from government in all aspects of highway service! Wow, sounds like Milton Friedman or Bob Poole got into Congress.

Trouble is the details of the bill itself fall so far short of doing almost any of this that it reads like a sick self-parody, displaying a kind of disconnect between promise and performance, between rhetoric and reality in which modern politicians seem to specialize, and which has them, rightly, held in such low public esteem.

Tax exempt status under HICSA is only to be conferred for up to 15 projects for bonds up to $15b total, each project to be selected at the discretion of the US Sec of Transp in consultation with the Sec of the Treasury and the projects must be deemed by these worthies to

(1) serve the public

(2) be needed to evaluate the potential of business involvement

(3) be located on government owned right-of-way

(4) be government owned or revert to government ownership

(5) be consistent with all US laws and regulations for US funded roads (Title 23)

(6) meet all federal, state and local labor, design, environmental and construction standards

In other words these investor ‘pilot projects’ must be an integral part of the political and bureaucratic command-and-control process that makes government roadbuilding the clumsy, cumbersome and expensive process it already is. Bring your money, the US government is saying, and then if you subject yourself to most of the politics and bureaucracy which we have devised for ourselves, then we might let you design, build and operate a road – except it has to be on land you give us, built the way we build it, and you’ll have to agree, at the get-go, to hand all your investments over to us at some future date specified.

Friedmanite rhetoric

So despite that Friedmanite rhetoric, in its specifics HICSA places the investor firmly in the category of the led, not the leader, and brandishes all manner of handcuffs and shackles to try ensure that he will not in fact get to take much of a lead.

Government standards? Montgomery AL now has a couple of investor-built toll bridges because investor Jim Allen challenged the state standard that every new bridge must meet a 100 year flood test, asking the local people if they would prefer bridges designed to flood and to be closed for a few days every 10 or 15 years, which he could finance with tolls, to no bridges at all under the unaffordable 100 year flood standard. They preferred a 364/365 day open bridges to no bridges, but HICSA wouldn’t have helped him.

And to avoid the protracted legal costs and uncertainties of government involvement in a ‘concession’ he required a simple agreement that the city would build and maintain local road connections to his bridges. He built the bridges and owns them in perpetuity like an investor who builds a factory or an apartment building, and just as the apartment owner charges market rents Allen charges market tolls. Now, that’s the private sector taking the lead, Senator Chafee! But HICSA’s not much help to a Jim Allen.

HICSA would have been of no assistance either to the Dulles Greenway VA or the Colombia Solidarity Toll Road TX both of which are on the investors’ land. As for US government labor ‘standards’ the odious Davis Bacon regulations originally designed to exclude ‘cheap’ black labor from road work on Long Island NY, and which now give labor racketeers leverage to as much as double the costs of government road projects, these are also to apply to any HICSA projects. Thanks for such help!

All that said, stuff like HICSA could be helpful to some road projects. A few. And we should be thankful for the door being opened, even if just a crack, we’ll concede. But HICSA projects helped will not be able to be led by normal human beings. They will need a special superbreed of heroes and pioneers, extremely patient, persistent, ingenious and resilient investors, persons who thrive in adversity, picky detail-oriented persons who can master the minutae of many laws and legal agreements but also students of Machievellian strategy and tactics, guys with nerves of steel able to endure vilification and misrepresentation, assaults from feckless government agencies and the media (even newsletters) and above all they will have to be political houdinis who can break their way out of one set of shackles after another, after another.

To Jerry Pfeffer, Kent Olson, Tom Horkan, Michael Crane, Jim Carroll, Keith Denton, Carlos Benavides, Greg Hulsizer, Nick James, Ken Walker, Tom Smith, James Taylor, Jose Maria Lopez, John Beck, Bob Farris, Gordon Wu and others who welcome and take up HICSA-like challenges, we stand in awe. (Contact Nicholas Graham, Senate Committee on Public Works 202 224 2921)