To doubt the wisdom of the lease of the Indiana Toll Road, as many have from the beginning, does not prevent one from acknowledging its benefits. The state has faithfully carried out the plans for highway construction and improvements laid under former Gov. Mitch Daniels, the architect of the 2006 sale. The Fort-to-Port project, which turned U.S.24 east of Fort Wayne into a four-lane corridor, is but one example. Those who urged a bit more caution when the Toll Road was leased to a foreign-owned investment consortium for 75years were not worried about how effectively the state would spend its $3.85 billion windfall. The concern was what might happen in the long run. With news that the consortium is close to going under, that concern has resurfaced, big time. According to the Wall Street Journal, the Indiana Toll Road Concession Co., which comprises the Spanish infrastructure company Cintra and an Australian bank called Macquarie, is $6 billion in debt. The company, which missed a payment on the road in June, “has already reached an agreement on a restructuring plan that would set the framework for a sale of the road,” the Journal reported. Who will buy it? Perhaps another investment firm. If no likely suitors emerge, hedge funds that have bought up the company’s debt might take over the Toll Road. Somebody, at some price, is going to want to take advantage of the authority to raise tolls on the 157-mile expressway by as much as 3 percent each year. David Tanner of Land Line, a professional truckers magazine that opposed the Toll Road lease, noted last week that truckers paid $14 to drive across Indiana before the road was leased. “That same truck currently pays $38.70,” he noted, and by 2081, when the lease expires, that toll could be $280 per truck trip. Drivers of passenger cars who use EZpass have so far been spared the toll increases, though Indiana has paid back the consortium more than$50 million for that little favor. In 2016, though, that exemption goes away, and every northbound driver who makes a left at Angola will be coughing up more cash. And more. And more. The operators of the Toll Road are responsible for its maintenance. Let’s hope the unknown hedge-fund managers who could be in our future believe in speedy road-crack repair and ice-and-snow removal. Of course, if the Toll Road’s next owners – or the next after that – prove to be poor highway stewards, there’s a provision for Indiana to claw back ownership. But how long and involved and costly a process might that prove to be? Former Indiana Rep. Win Moses voted against the 2006 deal. After the latest problems were revealed, he told The Journal Gazette’s Jamie Duffy that there was always “certainty that something will go wrong. It just happened earlier than we expected.” Just as the enhancements of U.S. 24, U.S. 31 and Interstate 69 are invaluable to travel and business in the areas they serve, I-80/94 is a vital link for residents of northern Indiana and all other Hoosiers. The Indiana Toll Road is one of the state’s most valuable resources. That reality explains why people in our region were more reluctant to buy into Daniels’ grand strategy, and why people in Indianapolis and Evansville tended to think it was a magnificent idea – a matter, as Daniels once put it, of simply being willing to cash a winning Powerball ticket. It has always been easier to view the Toll Road sale plan as a slam-dunk victory if you haven’t regularly paid to drive on the Toll Road, or if you haven’t needed to get to Chicago or South Bend or to receive a shipment from Milwaukee. But as part of the national interstate highway system, the Toll Road is more than a fast way to get to a meeting or a football game. The interstate highway system was part of a larger national system that was championed by President Dwight D. Eisenhower in the 1950s. Eisenhower argued that the system was vital not just for the nation’s economic interdependence but for national defense. As a young soldier after World War I, he’d seen how hard it was to move military equipment across the country. As commander of the Allies in Europe during World War II, Eisenhower saw what an advantage the German highway system provided militarily. As president during the Cold War, he envisioned a day when millions of Americans might have to be evacuated after a nuclear exchange. Eisenhower is long in his grave, and the Cold War is long since done with (right?). Such unlikely scenarios no longer play politically. Drivers on the Toll Road are more likely to be worried about speeding double-rig semis and unfilled potholes than nuclear missiles. Not to stereotype, but hedge-fund operators might not be very likely to be worried about any of those things. The hazards illuminated by Indiana’s headlong rush to sell a vital piece of infrastructure weren’t lost on other states, including Ohio, which backed away from the privatization craze. Let’s hope the lessons are not lost on Indiana legislators, as well. journalgazette.net/article/20140921/EDIT10/309209910/1150/EDIT10
Posted on: Sun, 21 Sep 2014 09:52:38 +0000
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