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  • Quote of the Day

    Posted by Jonathan on March 16th, 2007 (All posts by )

    The trucking groups don’t seem to realize that the leasing of a few high-profile toll roads is just a small part of a much larger and more important phenomenon: the infusion of global capital into a capital-starved U.S. highway system. The multi-billion-dollar new toll road projects that keep being announced in Texas are a foretaste of what we can look forward to if we create a comparably friendly investment climate in other states.

    -Robert Poole (in Surface Transportation Innovations, Issue No. 40, February 2007)

     

    5 Responses to “Quote of the Day”

    1. david foster Says:

      In dense areas, it would probably be difficult to do major new highway projects without use of eminent domain. Which raises some interesting questions if the project is being done by a private organization…

    2. Jonathan Says:

      Eminent domain may only be an issue for new construction and not for projects to improve current highways.

      Also, I suspect that eminent domain is less an issue for private projects than for government ones. Well-structured private projects should generate enough revenue to make the purchase of necessary land at market rates affordable, and certainly the market price of land should be factored into any cost calculations. However, I don’t know how this issue is actually being handled.

      Finally, with access to more capital come more options. The substantial revenue potential from congestion-reducing private highway projects in dense urban areas probably makes alternatives such as tunneling cost-effective in some cases.

      I generally oppose eminent domain. However, the case for private road projects is an unrelated issue. Given two competing proposals to build and operate a road, I would prefer the private one over the government one. I intended this post mainly to highlight the insight, which Bob Poole captured very well, that the ability to privatize the income stream from toll roads makes available an enormous amount of new capital for road projects. Progressive state governments are starting to exploit this pool of capital by commissioning new toll-financed private projects. Over time, these projects appear likely to be a huge boon for residents of congested urban areas.

    3. Texas Slim Says:

      A couple of thoughts from a Texas driver to add:

      -I would think that truckers can do some economics for their own sakes; for example, the traffic disaster that is I-35 through downtown Austin would seem to encourage use of the new (public) toll bypass that starts in Seguin (~40 miles south) and reconnects in Round Rock (~20 miles north). The time saved, plus gas savings for not inching along for at least an hour during rush hour should provide some incentive.

      -Funding Texas transportation would be easier if we got a better return on our federal gas tax dollar, as Poole mentions. We get $0.93 for every buck. Lame.

      -The project I think Poole is refering to is the Trans-Texas Corridor, which at first blush has all kinds of stuff I like: separate truck lanes! High speed rail! Serious internet backbone infrastructure! But bear in mind, this isn’t some urban traffic reliever — it is to go from Laredo to Oklahoma, 500 miles long, half-mile to a mile wide, avoiding major cities. Which makes me think…

      -You are way more optimistic about eminent domain than I, or the hundreds of farmers in the proposed path are. I’m sure that at least some of these people are 8th-generation-on-the-land types with no intention of leaving. They are also well armed, and good shots.

      -The funders are looking for reliable revenue; the TTC includes language with a 40 year non-compete clause, meaning no other state/local toll roads could be built that could even theoretically draw traffic away. Take it one step further: I-35 also goes from Laredo to Oklahoma. Does that mean lawsuit the next time I-35 needs an inevitable expansion?

      Kinda long-winded here, especially since it looks like the project is as dead as the HPV vaccine for 12 year old girls. The Ledge only meets once every two years, but it seems the current session is geared toward poking a pointy stick in the Guv’s eye.

    4. Jonathan Says:

      Thanks, TS. Very informative.

    5. Robert Schwartz Says:

      David: Railroads, Electric Utilities and other public utilities have long had and exercised the power of eminent domain. In return they accept an obligation to serve the public.