Roads to Riches

Investors are demonstrating a growing and sizeable interest in acquiring America's highways, bridges, port facilities, airports and even lotteries. The author explores the private sector's purchase of public infrastructure valued in the billions of dollars and cautions why the public should be wary. Admittedly there are immediate benefits to states from the private purchase of public property such as lowering of state debt, reduction of maintenance budgets, greater investment in social programs and balancing budgets. However the vital question is are the private investors getting a much better long term deal? Private investors view the purchase of roadways such as the Indiana Toll Road as a sure revenue stream for decades to come without having to be held accountable for future guarantees of continued maintenance standards or fair toll pricing. Driving the growing market in private interests purchasing/leasing public property is the potential revenue from toll increases. Built into these agreements are aggressive toll hikes spread over years but nevertheless placing the purchase/lease price burden on citizens while a handful of investors see only no risk profits. The negotiating trick for states considering some form of private ownership of public property is to see the potential rewards and benefits during the full length of the lease agreement, not just the immediate short term appeal of a balanced budget.

Language

  • English

Media Info

  • Media Type: Print
  • Pagination: pp 50-57
  • Serial:
    • Business Week
    • Issue Number: 4033
    • Publisher: McGraw-Hill, Incorporated
    • ISSN: 0007-7135

Subject/Index Terms

Filing Info

  • Accession Number: 01049384
  • Record Type: Publication
  • Files: TRIS
  • Created Date: May 8 2007 10:20AM