15 Jan

Yes Virginia, roads are socialized and subsidized

Some people are beginning to realize that roads were subsidized to an amazing extent in the past, and it has them upset. But they are not paid for, and now some places are trying to figure out how to pass on the cost of the huge road boom:

“Hoyne opposes any move by the village to vacate public roads and rely on private property owners to maintain them. At the same time, he recognizes that roads need to be kept up and that he and fellow residents of the northwest suburb are likely going to get stuck paying more — whether in the form of a new tax or by taking on the road costs directly.

‘If you have a nice home and you like where you live, you don’t want to have the road in front of your home in disrepair,’ Hoyne said. ‘The road fairies don’t exist. They’re not going to come down and pave your road just because you’re a swell guy.'”

(Via Chicago Tribune – Long Grove plan may pave way to privatize public roads.)

27 May

Failure to maintain infrastructure costs more in the long run

Penny wise, pound foolish:

“Now, instead of the $7 million in renovations and upgrades, the cost to replace the collapsed bridge will run $15 million and take up to a year. The collapse will cost an estimated $47 million in reduced productivity and trade. With the current average tax revenue from this total for trade and productivity in dealing with trade to Canada to be around 22%, the result is that this bridge collapse will cost the federal government $10 million in revenue for the period of repair, which when added to the $15 million pricetag means that we are looking at a total impact of $25 million. All in order to save $7 million.”

(Via So Much For Fiscal Hawks – Republicans Now Costing You Tens Of Millions To Save A Few Million | Addicting Info.)

26 Apr

Public Private Partnerships not so successful with roads

Selling public assets to private companies doesn’t end so well for the common good… at least the way it is being done in the US:

“Lots of people point to the $2.2 trillion shortfall in infrastructure investment in this country, and suggest that privatization of public assets is the best way to deal with the situation. So, for example, this might mean leasing a highway to a group of investors and giving them the right to charge tolls. The rationale is pretty sound: government at all levels is cash-strapped, there is tremendous public need, and profit opportunities (in theory, anyway) abound. But in practice, results on this front have been pretty awful in this country, and today there was more bad news as a privately run toll road in South Carolina teeters on the edge of going bust.

What’s going on?

As with the S.C. road, many existing deals are proving to be financial failures. The Australian financial giant Macquarie signed a $3.8 billion, 99-year lease on the Indiana toll road in 2006 which has utterly imploded since then. Last month the bank marked down the value of the asset by 70%. Another billion dollar deal for the Chicago Skyway toll road looks nearly as bad.”

(Via Public Private Partnerships: Another One Bites The Dust | INFRASTRUCTURIST.)