Florida senator does a Carona - supporter of P3s flips to populist campaign against

Dave Aronberg, a Democrat state senator and minority whip seems to be "doing a Carona" - flipping from support of privatization when it isn't controversial to strongly opposing it once a particular project attracts criticism. Aronberg is introducing two bills in the state senate:

- to impose a two year moratorium on signing toll concession/lease agreements on existing facilities

- to permanently bar concessioning existing facilities to more than 10% foreign entities

"Doing a Carona" is following the pattern of Senator John Carona, Texas Senate transportation chairman who went from support of Texas Transportation Corridors and legislation enlisting the private sector in building tollroads under concession to supporting a moratorium on its implementation and halting much of the program once criticism arose.  Senator Aronberg supported passage of the 2007 law he now seeks to rein in.

We got texts of the two bills from the senator's office. They can't get official numbers until Nov 18 when there is a procedural meeting of the legislature.

The moratorium bill adds to the statute s334.40 "public private transportation faciltiies"  prohibits FDOT from entering into any concession agreement with a private entity for leasing an existing transportation facility between July 1 2009 and July 1 2011.

The anti-foreign concession bill bars FDOT from entering into any concession agreement on an existing tollroad of the concessionaire company obtains more than 10% of its financing through one or more extraterritorial corporations.

Neither of the bills refers to the Alligator Alley concessioning that is presently under way by FDOT, although a press release makes that it the centerpiece of the bills. Headed up "Senator Aronberg files legislation to stop the lease and sale of Alligator Alley", it begins: "Concerned about higher tolls, lowered maintenance and a national security risk, Sen Dave Aronberg submitted legislation today to put the brakes on the FDOT high stakes plan to lease Alligator Alley to foreign-owned companies."

The senator charges that FDOT "failed to do their homework" and cites two consultants reports "that indicate plans to move forward with the project are premature" and that "keeping Alligator Alley instate hands is likely the best option for Florida taxpayers."

He says the process is "being rushed through without any figures to justify this outsourcing."

FDOT, he charges, has balked at requests for an independent review of the project.

COMMENT: Aronberg is responding to emotional uninformed protests and misrepresenting the situation to gain political mileage with disaffected groups. FDOT's procurement is following a very normal staged course and is not being rushed. It is only at the point where possible concessionaires have been short listed and a draft concession document has been published. No proposals have been made, the deadline being December 15.

see http://www.alligator-alley.com/calendar.php

Given inflation, tolls will rise anyway and the concession agreement sets maximum tolls and minimum maintenance requirements for the concessionaire. The state has enforcement powers. On security the concession can have no effect since that remains under the control of state police. The concessionaire only gets to run the business side - the toll revenues and the operations and maintenance.

We've reviewed the two consultants reports - from Goldman Sachs and KPMG - and while they suggest some alternative numbers - the senator misrepresents their conclusions. Nowhere do they say keeping the tollroads in state ownership is the best option for taxpayers, as he claims.

How could they? The private sector proposals aren't in yet.

Without knowing what they will offer there can be no basis for saying they will be a poorer (or a better) deal than continued state operation.

The two year moratorium on new concessions is a straight copy of the Corona compromise in Texas, where at least the bill established a study commission to report at the end of the two years.

The senator doesn't explain why foreign capital should be shut out, as provided in his second bill. International companies are the ones with the most expertise in concessions and in running tollroads. The geographic logic of a narrowly nationalistic view leads to restricting out-of-state companies or even out-of-town companies. America welcomes Japanese, German and Korean car companies to invest in and operate cars factories here. Why not benefit also by having them help finance and manage the roads the cars run on? It's a world of global enterprise.

The state can set the terms on which they do business in the concession contract.

Aronberg's bills apply only to concessions on "existing facilities" apparently leaving concessions open for new toll roads. What's the logic of that distinction? If it's good enough to have these international companies develop and operate new projects what's wrong with having them compete to run the existing facilities?

Many road developments involve a mix of existing and new - the I-595 near Ft Lauderdale project for example.  It is "existing" in that there is an 8 lane expressway. But every square yard of pavement will be rebuilt under an availability concession that widens it to 17 lanes, and to that extent it is "new" construction. So the I-595 project is both an existing facility and a new one.

It is unclear if Aronberg's bill would block projects like I-595?

For the concession process on Alligator Alley see FDOT's http://www.alligator-alley.com/

Copies of the two bills:

http://www.tollroadsnews.com/sites/default/files/Moratorium.doc

http://www.tollroadsnews.com/sites/default/files/ForeignBar.doc

TOLLROADSnews 2008-11-03