Ohio Turnpike proposed for latest acquisition by foreign firm
http://ipcommunications.tmcnet.com/news/2006/09/15/204559.htmOhio Turnpike proposed for latest acquisition by foreign firm(Copley News Service Via Thomson Dialog NewsEdge) COLUMBUS, Ohio - A foreign business consortium that controls the Indiana Toll Road and the Chicago Skyway is eyeing the Ohio Turnpike in what could become a 406-mile monopoly of East-West transportation.
Macquarie-Cintra, an Australian-Spanish consortium, has asked for and received 20 years of traffic and revenue data from the Ohio Turnpike Commission, according to Gary Suhadolnik, the commission's executive director. J. Kenneth Blackwell, the Republican candidate for governor, has included leasing the 241-mile turnpike as part of his economic development plan for Ohio. He said bids could bring $6 billion or more, and the money would pay for other infrastructure projects, such as highways and sewers, across the state.
His opponent, Democrat Ted Strickland, knocked the turnpike lease as a "bad idea" because it would likely put the highway into foreign hands and tolls would increase.
A nonprofit organization called Road to Work Ohio - headed by the former executive director of the Ohio Rail Development Commission - was formed last week to advocate for the turnpike lease. Although the group is made up of businesspeople with Republican ties, James Seney said the group is not affiliated with any campaign or political party.
POLITICAL PLUS OR MINUS?
The issue is clearly Blackwell's. He has campaigned using the 75-year lease of the Indiana Toll Road, negotiated by Republican Gov. Mitch Daniels, as a model. Blackwell said Ohio would get more than the $3.85 billion Indiana got for its shorter 157-mile road. Democrat-controlled Chicago got $1.8 billion for the 7.8 mile Skyway.
Daniels' popularity, however, plummeted so much after the Indiana deal went through that fellow Republicans, including congressional candidates, are not asking him to campaign for them. In fact, one of Daniels' few campaign appearances this year was for Blackwell last month in Columbus.
"It's interesting that he's campaigning in Ohio and not Indiana," said Robert Schmuhl, a political analyst and professor at the University of Notre Dame. "A number of Republican candidates are fearful about what might happen in November because of the lingering animosity that Gov. Daniels has attracted."
WHAT WILL HAPPEN TO TOLLS AND SIDE ROADS?
Those who watched the Indiana deal urged caution about the details in an Ohio turnpike lease. For example, tolls in Indiana will nearly double for the next four years and then increase more after that. All of Indiana's money, which is generating $500,000 in interest per day, will be gone in 10 years. And the new private operator of the Indiana Toll Road, without notifying authorities, put barriers in all of the highway's emergency turnarounds, preventing rescue vehicles from getting to crashes.
Analysts also say traffic will increase on the Ohio Turnpike's parallel roads - state Route 2, U.S. Route 20 and possibly U.S. Routes 30 and 224 and Interstates 76 and 70 - as truckers and others avoid increased tolls. And if a no-compete clause appears in the lease contract, as it does in Indiana, the state might be prevented from improving those roads to handle the increased traffic.
Any lease deal likely would mean the state would have to use its share to pay off the turnpike's debt, which is $700 million. A private operator also would get control of service plazas, including concessions and advertising. The annual $113.5 million in taxes from fuel used by drivers on the turnpike that now goes to the state's general revenue funds could disappear.
"We're concerned about selling it," said Larry Davis, who represents the Ohio Trucking Association, "but we're more concerned about how the money will be used."
Should the lease become a reality, he said truckers prefer the state use the money for highway projects and not "sewers in Youngstown."
'SELLING OF AMERICA'S INFRASTRUCTURE'
All of Indiana's money from the lease is allocated strictly for highway projects, many of which have been on the drawing board for years. But that doesn't please everyone, either. Residents in southwest Indiana are upset that a new Interstate 69 extension from Evansville to Indianapolis will be a private toll road. And northern Hoosiers are fuming that the lease money will not stay in their part of the state.
"There is a sense of loss of a state asset to a foreign company," Schmuhl said.
"I'm one of those who has a hard time with selling off America's infrastructure," said Jennifer Duffy, a political analyst in Washington, D.C. "It's quick cash. It's probably a temporary fix to a problem. A lot depends on how the deal is cut."
Duffy called leasing highways "politically risky because it is not going to be wholeheartedly embraced by voters. It ultimately costs them money, if only in higher tolls. (They) do not believe the distant promise."
Schmuhl wondered what happens after Indiana spends its lease money.
"Does it buy the Republican administration four more years because of all the road projects?" he said. "If the majority of the money is going to be spent over the next decade, one wonders about the six-plus other decades (in the lease)."
The fact that a foreign company manages the Indiana Toll Road is a minor issue, according to Bill Blomquist, a political science professor at Indiana University Purdue University Indianapolis.
"(That) was an effort by folks who wanted to oppose it in the Legislature to try to justify their opposition," he said. "They haven't packed up the Chicago Skyway and spirited it off in the middle of the night to Australia or Spain."
---
Reach Paul E. Kostyu at 614-222-8901 or e-mail paul.kostyu@cantonrep.com.
SIDEBAR TO TURNPIKE PART OF SUNDAY PACKAGE
By Paul E. Kostyu
Copley News Service
COLUMBUS, Ohio - You've arrived at an airport, waited for your bags to be unloaded and now you need a cart to haul your luggage to your car. In the United States, there's a good chance you're going to use a cart from Smarte Carte Corp.
While visiting friends in New England, you used water provided by Aquarion, one of the 10 largest privately owned utilities in the United States.
And if you stopped in Michigan and flipped on a light, the power likely came through the Michigan Electric Transmission Co.
All three companies are owned in whole or part by Macquarie Bank, a massive Australian firm with hundreds of billions of dollars in assets in 19 countries.
And it is eyeing the lease and management of the Ohio Turnpike.
WHO ARE THESE GUYS?
Macquarie and Cintra, a Spanish company, formed a consortium that paid $1.83 billion to lease the Chicago Skyway and $3.85 billion for the Indiana Toll Road. The consortium has received 20 years' worth of traffic and revenue data about the Ohio Turnpike as a step toward bidding on the highway.
Such a proposal is a keystone to the gubernatorial campaign of GOP candidate Ken Blackwell.
The two companies are not new to infrastructure investment. Macquarie has investments in North America, Europe, Africa and Asia - from the Hakone Turnpike in Japan to Cardinal Power in Canada and South East Water in the United Kingdom. Its investments include broadband communications, broadcast facilities, energy delivery, tunnels, bridges, airports, parking and real estate.
Its January purchase of Smarte Carte Corp. added to its portfolio the world's leading concessionaire of baggage carts, lockers and stroller services in airports, train stations, bus terminals, shopping centers and entertainment facilities.
In addition to the Skyway and Indiana toll roads, Macquarie operates the Dulles Greenway in Virginia, the Detroit-Windsor Tunnel and the South Bay Expressway, a 10-mile toll road from San Diego to Mexico. The latter is California's first road built as a public-private partnership.
12.5 PERCENT RETURN
Cintra, which predicts a 12.5 percent return on its Indiana investment, operates toll roads and parking lots. It has a stake in 23 roads in Spain, Portugal, Ireland, Italy, Chile, Canada and the United States.
Cintra is designing and planning the $36 billion Trans-Texas Corridor, a 50-year plan for a multiuse, statewide network of transportation routes incorporating existing and new highways, freight and high-speed commuter railways and infrastructure for water, oil, gas, electric, broadband and telecommunication services.
Cintra, a subsidiary of Ferrovial, has parking operations in 141 cities in Spain, Andorra and Puerto Rico. It manages seven airports in the United Kingdom, and Ferrovial has ownership interest in airports in Europe, Australia and the United States.
On the Internet:
www.macquarie.com.au
www.cintra.es
www.ferrovial.com
---
Reach Paul E. Kostyu at 614-222-8901 or e-mail paul.kostyu@cantonrep.com.
---
3 SETS OF INFO FOR INFO BOXES. GO WITH TURNPIKE STORIES
BOX 1
Comparison of toll roads
-
Chicago Skyway
Miles: 7.8
Lease Company: Macquarie-Cintra
Amount: $1.83 billion
Years: 99
-
Indiana Toll Road
Miles: 157
Lease Company: Macquarie-Cintra
Amount: $3.85 billion
Years: 75
-
Ohio Turnpike
Miles: 241
Lease Company: Macquarie-Cintra (interested)
Amount: $6 billion or more (expected)
Years: Unknown
- Copley News Service
---
BOX 2
Toll Rates in cents per mile as of July 2006
OHIO
Passenger car: 3.7 (4.2, proposed 2007)
Empty rig (30,000 lbs.): 8.9 (10, proposed 2007)
Full rig (80,000 lbs.): 12.9 (13.9, proposed 2007)
-
ILLINOIS
Passenger car: 5.5
Empty rig (30,000 lbs.): 27.6
Full rig (80,000 lbs.): 27.6
-
PENNSYLVANIA
Passenger car: 6
Empty rig (30,000 lbs): 12.8
Full rig (80,000 lbs): 32.5
-
NEW JERSEY
Passenger car: 5.7
Empty rig (30,000 lbs): 20.5
Full rig (80,000 lbs): 20.5
NEW YORK Passenger car: 3.7
Empty rig (30,000 lbs): 21
Full rig (80,000 lbs): 21
-
INDIANA
Passenger car: 3
Empty rig (30,000 lbs): 11.4
Full rig (80,000 lbs): 11.4
INDIANA with lease agreement
Vehicle 2006 2007 2008 2009
Passenger car 3 3 5.1 5.1
Empty rig (30,000 lbs) 11.4 14.4 17.4 20.4
Full rig (80,000 lbs) 11.4 14.4 17.4 20.4
Source: Ohio Turnpike Commission
- Copley News Service
---
BOX 3
FUEL ON THE TURNPIKE (Based on miles driven in 2005)
The Ohio Turnpike Commission gets 5 cents per gallon in taxes for every gallon of fuel sold on the turnpike. The state tax is 28 cents per gallon. The federal tax is 18.4 cents per gallon. The commission does not get money from fuel taxes generated by miles driven on the turnpike. Those Ohio taxes go to the state's general revenue.
Gallons used: 87.1 million, gasoline; 139.5 million, diesel; 226.6 million total
Gallons sold: 38.3 million, gasoline; 17 million, diesel; 55.4 million total
Fuel taxes from miles driven on turnpike: $40.4 million, gasoline; $73.1 million, diesel; $113.5 million, total
Fuel taxes from fuel sold on turnpike: $17.8 million, gasoline; $8.9 million, diesel; $26.7 million, total
Fuel taxes received by Turnpike Commission: $1.9 million, gasoline; $853,609, diesel; $2.7 million, total
Source: Ohio Turnpike Commission
- Copley News Service
Copyright 2006 Copley News Service
Macquarie-Cintra, an Australian-Spanish consortium, has asked for and received 20 years of traffic and revenue data from the Ohio Turnpike Commission, according to Gary Suhadolnik, the commission's executive director. J. Kenneth Blackwell, the Republican candidate for governor, has included leasing the 241-mile turnpike as part of his economic development plan for Ohio. He said bids could bring $6 billion or more, and the money would pay for other infrastructure projects, such as highways and sewers, across the state.
His opponent, Democrat Ted Strickland, knocked the turnpike lease as a "bad idea" because it would likely put the highway into foreign hands and tolls would increase.
A nonprofit organization called Road to Work Ohio - headed by the former executive director of the Ohio Rail Development Commission - was formed last week to advocate for the turnpike lease. Although the group is made up of businesspeople with Republican ties, James Seney said the group is not affiliated with any campaign or political party.
POLITICAL PLUS OR MINUS?
The issue is clearly Blackwell's. He has campaigned using the 75-year lease of the Indiana Toll Road, negotiated by Republican Gov. Mitch Daniels, as a model. Blackwell said Ohio would get more than the $3.85 billion Indiana got for its shorter 157-mile road. Democrat-controlled Chicago got $1.8 billion for the 7.8 mile Skyway.
Daniels' popularity, however, plummeted so much after the Indiana deal went through that fellow Republicans, including congressional candidates, are not asking him to campaign for them. In fact, one of Daniels' few campaign appearances this year was for Blackwell last month in Columbus.
"It's interesting that he's campaigning in Ohio and not Indiana," said Robert Schmuhl, a political analyst and professor at the University of Notre Dame. "A number of Republican candidates are fearful about what might happen in November because of the lingering animosity that Gov. Daniels has attracted."
WHAT WILL HAPPEN TO TOLLS AND SIDE ROADS?
Those who watched the Indiana deal urged caution about the details in an Ohio turnpike lease. For example, tolls in Indiana will nearly double for the next four years and then increase more after that. All of Indiana's money, which is generating $500,000 in interest per day, will be gone in 10 years. And the new private operator of the Indiana Toll Road, without notifying authorities, put barriers in all of the highway's emergency turnarounds, preventing rescue vehicles from getting to crashes.
Analysts also say traffic will increase on the Ohio Turnpike's parallel roads - state Route 2, U.S. Route 20 and possibly U.S. Routes 30 and 224 and Interstates 76 and 70 - as truckers and others avoid increased tolls. And if a no-compete clause appears in the lease contract, as it does in Indiana, the state might be prevented from improving those roads to handle the increased traffic.
Any lease deal likely would mean the state would have to use its share to pay off the turnpike's debt, which is $700 million. A private operator also would get control of service plazas, including concessions and advertising. The annual $113.5 million in taxes from fuel used by drivers on the turnpike that now goes to the state's general revenue funds could disappear.
"We're concerned about selling it," said Larry Davis, who represents the Ohio Trucking Association, "but we're more concerned about how the money will be used."
Should the lease become a reality, he said truckers prefer the state use the money for highway projects and not "sewers in Youngstown."
'SELLING OF AMERICA'S INFRASTRUCTURE'
All of Indiana's money from the lease is allocated strictly for highway projects, many of which have been on the drawing board for years. But that doesn't please everyone, either. Residents in southwest Indiana are upset that a new Interstate 69 extension from Evansville to Indianapolis will be a private toll road. And northern Hoosiers are fuming that the lease money will not stay in their part of the state.
"There is a sense of loss of a state asset to a foreign company," Schmuhl said.
"I'm one of those who has a hard time with selling off America's infrastructure," said Jennifer Duffy, a political analyst in Washington, D.C. "It's quick cash. It's probably a temporary fix to a problem. A lot depends on how the deal is cut."
Duffy called leasing highways "politically risky because it is not going to be wholeheartedly embraced by voters. It ultimately costs them money, if only in higher tolls. (They) do not believe the distant promise."
Schmuhl wondered what happens after Indiana spends its lease money.
"Does it buy the Republican administration four more years because of all the road projects?" he said. "If the majority of the money is going to be spent over the next decade, one wonders about the six-plus other decades (in the lease)."
The fact that a foreign company manages the Indiana Toll Road is a minor issue, according to Bill Blomquist, a political science professor at Indiana University Purdue University Indianapolis.
"(That) was an effort by folks who wanted to oppose it in the Legislature to try to justify their opposition," he said. "They haven't packed up the Chicago Skyway and spirited it off in the middle of the night to Australia or Spain."
---
Reach Paul E. Kostyu at 614-222-8901 or e-mail paul.kostyu@cantonrep.com.
SIDEBAR TO TURNPIKE PART OF SUNDAY PACKAGE
By Paul E. Kostyu
Copley News Service
COLUMBUS, Ohio - You've arrived at an airport, waited for your bags to be unloaded and now you need a cart to haul your luggage to your car. In the United States, there's a good chance you're going to use a cart from Smarte Carte Corp.
While visiting friends in New England, you used water provided by Aquarion, one of the 10 largest privately owned utilities in the United States.
And if you stopped in Michigan and flipped on a light, the power likely came through the Michigan Electric Transmission Co.
All three companies are owned in whole or part by Macquarie Bank, a massive Australian firm with hundreds of billions of dollars in assets in 19 countries.
And it is eyeing the lease and management of the Ohio Turnpike.
WHO ARE THESE GUYS?
Macquarie and Cintra, a Spanish company, formed a consortium that paid $1.83 billion to lease the Chicago Skyway and $3.85 billion for the Indiana Toll Road. The consortium has received 20 years' worth of traffic and revenue data about the Ohio Turnpike as a step toward bidding on the highway.
Such a proposal is a keystone to the gubernatorial campaign of GOP candidate Ken Blackwell.
The two companies are not new to infrastructure investment. Macquarie has investments in North America, Europe, Africa and Asia - from the Hakone Turnpike in Japan to Cardinal Power in Canada and South East Water in the United Kingdom. Its investments include broadband communications, broadcast facilities, energy delivery, tunnels, bridges, airports, parking and real estate.
Its January purchase of Smarte Carte Corp. added to its portfolio the world's leading concessionaire of baggage carts, lockers and stroller services in airports, train stations, bus terminals, shopping centers and entertainment facilities.
In addition to the Skyway and Indiana toll roads, Macquarie operates the Dulles Greenway in Virginia, the Detroit-Windsor Tunnel and the South Bay Expressway, a 10-mile toll road from San Diego to Mexico. The latter is California's first road built as a public-private partnership.
12.5 PERCENT RETURN
Cintra, which predicts a 12.5 percent return on its Indiana investment, operates toll roads and parking lots. It has a stake in 23 roads in Spain, Portugal, Ireland, Italy, Chile, Canada and the United States.
Cintra is designing and planning the $36 billion Trans-Texas Corridor, a 50-year plan for a multiuse, statewide network of transportation routes incorporating existing and new highways, freight and high-speed commuter railways and infrastructure for water, oil, gas, electric, broadband and telecommunication services.
Cintra, a subsidiary of Ferrovial, has parking operations in 141 cities in Spain, Andorra and Puerto Rico. It manages seven airports in the United Kingdom, and Ferrovial has ownership interest in airports in Europe, Australia and the United States.
On the Internet:
www.macquarie.com.au
www.cintra.es
www.ferrovial.com
---
Reach Paul E. Kostyu at 614-222-8901 or e-mail paul.kostyu@cantonrep.com.
---
3 SETS OF INFO FOR INFO BOXES. GO WITH TURNPIKE STORIES
BOX 1
Comparison of toll roads
-
Chicago Skyway
Miles: 7.8
Lease Company: Macquarie-Cintra
Amount: $1.83 billion
Years: 99
-
Indiana Toll Road
Miles: 157
Lease Company: Macquarie-Cintra
Amount: $3.85 billion
Years: 75
-
Ohio Turnpike
Miles: 241
Lease Company: Macquarie-Cintra (interested)
Amount: $6 billion or more (expected)
Years: Unknown
- Copley News Service
---
BOX 2
Toll Rates in cents per mile as of July 2006
OHIO
Passenger car: 3.7 (4.2, proposed 2007)
Empty rig (30,000 lbs.): 8.9 (10, proposed 2007)
Full rig (80,000 lbs.): 12.9 (13.9, proposed 2007)
-
ILLINOIS
Passenger car: 5.5
Empty rig (30,000 lbs.): 27.6
Full rig (80,000 lbs.): 27.6
-
PENNSYLVANIA
Passenger car: 6
Empty rig (30,000 lbs): 12.8
Full rig (80,000 lbs): 32.5
-
NEW JERSEY
Passenger car: 5.7
Empty rig (30,000 lbs): 20.5
Full rig (80,000 lbs): 20.5
NEW YORK Passenger car: 3.7
Empty rig (30,000 lbs): 21
Full rig (80,000 lbs): 21
-
INDIANA
Passenger car: 3
Empty rig (30,000 lbs): 11.4
Full rig (80,000 lbs): 11.4
INDIANA with lease agreement
Vehicle 2006 2007 2008 2009
Passenger car 3 3 5.1 5.1
Empty rig (30,000 lbs) 11.4 14.4 17.4 20.4
Full rig (80,000 lbs) 11.4 14.4 17.4 20.4
Source: Ohio Turnpike Commission
- Copley News Service
---
BOX 3
FUEL ON THE TURNPIKE (Based on miles driven in 2005)
The Ohio Turnpike Commission gets 5 cents per gallon in taxes for every gallon of fuel sold on the turnpike. The state tax is 28 cents per gallon. The federal tax is 18.4 cents per gallon. The commission does not get money from fuel taxes generated by miles driven on the turnpike. Those Ohio taxes go to the state's general revenue.
Gallons used: 87.1 million, gasoline; 139.5 million, diesel; 226.6 million total
Gallons sold: 38.3 million, gasoline; 17 million, diesel; 55.4 million total
Fuel taxes from miles driven on turnpike: $40.4 million, gasoline; $73.1 million, diesel; $113.5 million, total
Fuel taxes from fuel sold on turnpike: $17.8 million, gasoline; $8.9 million, diesel; $26.7 million, total
Fuel taxes received by Turnpike Commission: $1.9 million, gasoline; $853,609, diesel; $2.7 million, total
Source: Ohio Turnpike Commission
- Copley News Service
Copyright 2006 Copley News Service
