concessions

Massachusetts Turnpike service plazas will not be privatized in a longterm concession. The state's transportation secretary (called Executive Office of Transportation) and the Turnpike CEO Jeff Mullan concurred in deciding this week to reject the bids made in a recent concession procurement.

Investor groups interested in tollroad concessions are putting their pitch in Washington DC for equity to play a major role in reviving the economy. They say $180 billion is available that could generate between 600k and 2m jobs in the US.

Democrat leaders in the Congress James Oberstar and Peter DeFazio write today that the financial markets crisis has heightened their concern over public private partnerships (P3s) and innovative finance, especially what they call "the lack of adequate transparency and public interest protections under these deals."

Private equity group Blackstone is establishing an infrastructure fund and they say it will be looking at tollroads as investments. The New York based group has recruited several former Macquarie specialists including Michael Dorell and Trent Vichy.

Macquarie, a major Australian investment bank, has suffered a major loss of capitalization in the recent weeks, and is retrenching to preserve liquidity. They have announced the sale of their concession on a major bridge in Lisbon Portugal.

TOLLROADSnews 2008-09-30

China Infrastructure Investment Corporation one of hundreds of investor-owned toll road companies in China is different in that it is now traded on the NASDAQ in New York (trading symbol CIIC). Incorporated in Nevada, it is headquartered in Henan province in China.

The Pennsylvania Turnpike Commission at a meeting today approved a staff proposal to advertise for expressions of interest in a toll concession to build three remaining sections of the connected Mon-Fayette Expressway and Southern Beltway projects south of Pittsburgh. They constitute some 83km (51.6 miles) of expressway with a project cost of about $5.2b, the Turnpike says in a statement issued after the meeting.

A report commissioned by the Democratic Caucus of the state House slams Governor Rendell's proposed longterm lease/concession for the Pennsylvania Turnpike, claiming that a corporate concession will have a present value of only $14.8 billion vs the Turnpike Commission (PTC) under Act 44 being worth $22.8b to $26.5b at present value. (CORRECTION HERE 2008-03-04 12:30 We initially misread the report.

Beijing's Xinhua news agency reports attempts by the central government of China to assert control over provincial government initiatives in building tollroads.

Penn Pike chief Joe Brimmeier is saying the Turnpike Commission is planning to issue Requests for Proposals shortly for toll concessions to build elevated toll express lanes on:

- (1) the Parkway East (I-376) east of Pittsburgh

- (2) the Schuykill Expressway (I-76) northwest of Philadelphia (pronounced 'skookull' with appropriate Dutch/Philly gutterals. REVISED)

In the wake of the Federal Transit Administration's 'No' to Virginia's request for federal funding for construction of the $5b Dulles Rail project, state officials are rethinking their plan to have the area's Airports Authority take over the Dulles Toll Road. This could open the way for resumption of the private sector concessioning that was interrupted by the MWAA intervention in 2006.

Spokesman for the Georgia Department of Transportation, Crystal Paulk-Buchanan tells us her boss the new commissioner of transportation Gena Abraham is certainly reviewing toll projects in the state, along with non-toll projects. But she says a report quoting the Commissioner as saying "she might scrap the whole list of (toll) projects and start over" is flat wrong.

Releases to the Australian Stock Exchanges coincidentally both on Jan 10 by Macquarie and Transurban show generally strong traffic numbers for 2007, but a few laggards mainly in the US. 407ETR the all electronic tollroad in Toronto Canada continues a star performer for Macquarie (which owns 30%). In its eleventh year it showed a 6.1% growth in vehicle kms to 2.25b 2007/2006.

Ric Williamson chairman of the Texas Transportation Commission said in one of the last interviews before his death Sunday morning that he thought the state Legislature will reinstate private toll concessions at the end of their 18 month review. The interview was with Len Gilroy, a Reason Foundation researcher based in Texas, and is just published today on the Reason website.

California governor Arnold Schwarzenegger is planning another push to get legislation passed to facilitate public private partnerships (PPPs). Previous efforts to get law more hospitable to private sector ownership of infrastructure including toll concessions have run into opposition from civil service unions and their supporters in the Democratic Party which has majorities in both houses of the legislature.

Texas DOT Turnpike division chief Phil Russell says that the Trans Texas Corridor 69 (TTC69) will offer opportunities for both public authority style tolling and private lease concessions. He says the decision announced last week to look first at upgrading existing routes is "no different" from the approach taken on TTC35. The difference of the second TTC, he says, is only in the nature of development along the route.

CNN anchor Lou Dobbs and reporter Lisa Sylvester were at it again last night (Oct 8) beating up on toll concessions, this time the Virginia DOT's negotiations with Transurban and Fluor for building toll lanes on the Capital Beltway.

A transcript follows with comments interposed (PSam for Peter Samuel):

Florida DOT have provided us with some more detail on their assessment of the value of three possible toll facilities to be put out for bid by investors. We've got "Possible leases of existing toll facilities" a five page screed dated 2007-09-05. It says the Sunshine Skyway Toll Bridge in Tampa, Alligator Alley Naples to Ft Lauderdale, and Beachline East expressway are "most likely candidates for consideration."

Florida Gov Charlie Crist is seriously considering longterm toll concessions, the Orlando Sentinel reports, on three Florida DOT properties bringing in between $1.12b and $2.92b. The three being considered are:

- Beachline Expressway FL527 which runs as a "bee line" between Orlando and the Atlantic coast (it was formerly called the Bee Line Expressway)

Texas governor Rick Perry has written a detailed and forceful four page rebuttal of the US House of Representatives' chairmen Obertsar and DeFazio's stance against toll concessions. Perry says the fundamental reason for "engaging the private sector" in concessions is that Texas can't wait for the US Government to solve the state's transport problems.

Texas law on tollroads has become as incomprehensible as the US income tax. Or US immigration law. You can devote hours to reading it, and employ professionals to interpret it, but you'll still get conflicting interpretations, the thing is such a mess of conflicting provisions, of prohibitions and exceptions, of elusive definitions, and so stuffed full of verbal padding that it tires the most indefatigable.