Chair of tolling authority comes unhinged at toll opponents

Repeating their only song, the Alamo Regional Mobility Authority Chairman Bill Thornton, appointed by Rick Perry to promote toll roads at any cost, continues it’s mantra that toll opponents, specifically TURF is to blame for the 281 project costs going up. Their plan is unraveling, and they have to resort to lies to try and fool the public into supporting their billion dollar house of cards.

In fact, the very same day Thornton made these comments, the RMA Board called a special meeting to discuss (and they’ll take action at their next meeting) a $95 million loan that will cost the taxpayers $700 million in interest! The RMA can’t get the financing together for the 281 toll road, so they’re having to grasp at very risky, very expensive loan deals to hold together their sinking ship. Even board member Bob Thompson, their latest convert, expressed deep reservations about going into debt for 7 times the amount of the actual loan, so did Jim Reed. Calling it usury is no exaggeration! Who’s causing the costs of this project to escalate out of control? Certainly not the citizens!

Last week after the Sunset Commission and legislators slammed TxDOT (watch it here) for NOT following the legislative intent of a law they passed to prohibit FREEway to tollway conversions like they’re doing on 281, and AFTER they witnessed TxDOT lie under oath in full color on this video, it’s no wonder the tollers are getting desperate.

No lawsuit was filed until December of 2005, two years AFTER TxDOT had the gas taxes to expand 281 and add overpasses and frontage roads. When Cintra-Zachry got involved, the project cost escalated rapidly.

The toll road size got bigger and more expensive when TxDOT tried to skirt around a law, HB 2702, prohibiting freeway to tollway conversions that mandated they build as many non-toll lanes as are there today. The plan to downgrade those non-toll freeway lanes to frontage lanes bringing the lane count from 10 (in the original gas tax plan) to up to 20 lanes (in the toll plan) and has caused the Legislature to slam TxDOT for NOT following the legislative intent of their law to prohibit freeway to tollway conversions. Watch the explosive video here.

Bottom line, TxDOT and politicians are responsible for delaying the fix to 281 and for the cost escalation when THEY decided, without a public vote, to fleece the taxpayers and generate revenue by converting 281 from a FREEway into a toll road in 2003. Let’s compare: the freeway plan = $100 million, 10 lanes wide (including frontage roads) and 18 months to build, the toll road = $1.3 billion, up to 20 lanes wide (with frontage roads) and 3.8 years to build. Do the math, the toll road is a taxpayer rip-off, and the RMA and TxDOT are engaging in overt lies, half truths, and diversionary tactics to distract from the public fleecing they’re promoting, despite overwhelming public opposition.

Let’s get the facts straight…

281 timeline

1999

MPO (Metropolitan Planning Organization, local board that allocates gas taxes to projects) votes to fund overpasses/interchanges at Evans Rd., Stone Oak Pkwy, and Borgfeld to be “let” in 2002. (Official action put these 281 projects in the MPO’s 2000-2003 Transportation Improvement Program, or TIP)

2001

TxDOT public hearings promising freeway plan (including overpasses, 2 new lanes, and frontage roads) to be “let” in 2003.

MPO votes to fund all freeway improvements (lane expansion, frontage roads, overpasses) for the 2.5 miles north of 1604 and for Borgfeld overpass, places funds in 2002-2004 MPO TIP (upwards of $60 million, total pricetag to county line is $100 million, so majority of improvements could have been made in 2003).

2003

Legislature passes HB 3588 opening door to tolling, public private partnerships (PPPs that place infrastructure in the hands of foreign companies), payments to losing bidders, including converting existing freeways into toll roads.

Bexar County Commissioners vote to petition the State to open a Regional Mobility Authority (tolling entity).
Transportation Commission passes Minute Order December 18 mandating all new lanes and new roads be studied for tolling. If they can make it toll viable (including using public subsidies), everything will now become a toll road.

MPO votes to continue to fund 281 improvements with gas taxes in the 2004-2006 TIP.

2004

In July, MPO votes to convert 281 freeway improvements (already funded with gas taxes) into toll road.

2005

Cintra-Zachry plunks down an unsolicited bid to buy-up the rights to toll both 281 and 1604 offering quick cash to TxDOT in exchange for collecting tolls for 50+ years.

MPO votes to fund 281 improvements (now a toll project) with gas taxes in the 2006-2008 TIP.

Legislature passes bill, HB 2702, to prevent the conversion of freeways into toll roads. TxDOT and the RMA change plain meaning of words and defy the legislative intent by continuing to convert 281 into a toll road leaving frontage roads, not freeway lanes, as the non-toll.

In December, People for Efficient Transportation and AGUA file federal lawsuit to stop the 281 toll project.

2006

In January, Federal Highway Administration agrees TxDOT didn’t follow federal law and pulls environmental clearance for 281 toll road. Toll opponents continue to fight to get gas tax plan installed in its place (at the MPO and TX Legislature).

In San Antonio Current article in August, TxDOT confirms there’s now $100 million in gas taxes for 281 (the exact pricetag for ALL the FREEway improvements from 1604 to Bexar County line).

In December, MPO votes to apply gas taxes for 281 to the toll project in its 2006-2008 TIP.

2007

Legislature puts the brakes on PPPs with SB 792 moratorium, Cintra-Zachry deal pulled, Alamo RMA takes 281 toll project.

Cost for 281 & 1604 toll projects jumps from a combined $1.4 billion to $2.2 billion per San Antonio Business Journal (the cost of the 281 project by itself had never been listed as greater than $400 million up until then). There was no explanation for this new figure in the article. Not even with factoring in the construction index (which is higher than the consumer price index used for inflation) can such figures be justified.

In December, MPO votes to approve toll rates and to subsidize the 281 toll project with $325 million in public funds (not backed by tolls, that could be used to keep it a freeway) of the $475 million needed to construct the toll road (that is now 4 times more expensive than the freeway in construction costs alone).

2008

In February,  Texans Uniting for Reform and Freedom (TURF) and AGUA file federal lawsuit to stop the 281 toll project. Plaintiffs announce no opposition to freeway plan, only seek to stop the toll road. Grassroots continue to work to keep 281 a freeway.

In June, Alamo RMA discloses scant financial details in public hearing and reveals the $475 million toll road will cost $864 million in interest bringing the pricetag to $1.3 billion for a project cost that started at $100 million in gas taxes (could be done in today’s dollars for $170 million).

On July 22, AFTER its public hearing disclosing the financial structure of the deal, Alamo RMA does a bait and switch, changes the type and structure of the loans/bonds and seeks a different type of loan for part of the project. For a loan amount of $95 million, the cost to the taxpayers with interest will be $700 million in order to scrape funds together in a desperate attempt to finance a project the public can no longer afford.This is nothing short of usury and fiscal malfeasance!

Then, Bill Thornton blames citizens for cost escalation, not their own funding schemes with lending terms so bad it’s equivalent to a sub prime mortgage loan headed for a taxpayer bailout. Neither lawsuit had anything to do with TxDOT’s failure to install the FREEway improvements funded with gas taxes since 2002. The cost escalated when TxDOT/RMA turned it into a toll road.

Even factoring in inflation and higher construction costs, the FREEway plan is now $170 million (which the $325 million the MPO has allocated to the toll road would more than cover) versus the toll road cost of $1.3 billion. TxDOT delayed the project in 2003 when they went on a toll road rampage, not concerned citizens. The RMA and TxDOT will charge the taxpayers 10 times more to make 281 a toll road.

Legislature investigates TxDOT's propaganda campaign

Link to article here. TURF testified before the House State Affairs Committee regarding TxDOT’s illegal propaganda and lobbying campaign, Keep Texas Moving. The legislators were shocked at how far over the line TxDOT has crossed, and will likely seek changes in the law that TxDOT claims allows them to advertise toll roads and restrain any attempts by a state agency to advocate or lobby. The legislators asked specifically for what legal ramifications there would be both criminally and civilly for TxDOT’s violations. Though TURF’s case against TxDOT was dismissed in trial court before the case was ever heard (the court upheld TxDOT’s plea of sovereign immunity) and before our evidence was presented, it’s now pending appeal.

Legislators want state to tell, not sell
By Peggy Fikac
San Antonio Express-News
July 19, 2008
AUSTIN — Government spending on advertising is being put under a microscope by state lawmakers who say they want to ensure public funds are used to inform — not unduly influence — Texans.

The effort was sparked by concerns over a divisive toll road campaign by the Texas Department of Transportation, which was in a familiar spotlight at Friday’s House State Affairs Committee hearing on the issue.

“We get all of the advantages of the toll roads, and yet there are a lot of people that see a lot of disadvantages,” said Rep. Dan Flynn, R-Canton, State Affairs member. “It seems like there was almost an effort to go beyond what the legislative intent was. ….. We have an agency here that kind of has their agenda that is different from ….. legislative intent. I guess that’s what our concerns are.”

Coby Chase, director of TxDOT’s government and public affairs division, responded, “We have most certainly, certainly heard that.” He said that the agency is “reassessing everything.”

Some $4.5 million has been spent on the Keep Texas Moving campaign, but there are no additional big advertising pushes in the works under its banner, according to TxDOT. The campaign originally was proposed at $7 million to $9 million. Chase called it a response to concerns that people didn’t understand toll roads.

The ad campaign had a ripple effect by prompting Rep. Ken Paxton, R-McKinney, State Affairs vice chairman, to call for the committee to study advertising practices across state government.

State agencies’ public awareness campaigns often give useful information, but “some state agencies may have overstepped their bounds by actually advertising their programs in an effort to lobby the public to support their agenda or utilize a particular service,” Paxton said.

The committee gave an initial look Friday to everything from health officials touting the benefits of breast feeding to promotion of state agricultural products to the Texas Lottery Commission’s advertising.

It’s unclear just how much state agencies spend on promotions, since state records don’t precisely track them.

But an examination of state records last year by the San Antonio Express-News and Houston Chronicle found the tally for advertising, publications and promotional items could easily reach $100 million or more in state and federal funds just for fiscal year 2008.

The tourism section of Perry’s office, for example, has a $40 million advertising budget; the Lottery Commission spends $31 million; TxDOT budgeted $18.4 million for advertising, aside from the Keep Texas Moving program; and the secretary of state’s office had an estimated $4 million budget for such efforts.

Some efforts draw more attention than others, such as those of the Lottery Commission. Flynn said many people are offended at ads they see as urging people to gamble for children’s futures, since lottery money flows to public education.

Anthony Sadberry, Lottery Commission executive director, said the agency is sensitive to such concerns. He said it has a mandate to promote the lottery but to not unduly influence people to play. Asked how the agency achieves that, Sadberry said dryly, “Well, it’s a challenge,” prompting laughter.

It was TxDOT, however, that drew much of the attention, a spot to which the agency is accustomed. Last week, it faced criticism from the Texas Sunset Advisory Commission, which looks at whether agencies are in need of major changes or should be continued. Sunset staff has recommended major changes.

Its Keep Texas Moving campaign on toll roads and the Trans-Texas Corridor transportation network struck a particular nerve with lawmakers, who’ve heard an outcry over the corridor’s possible route from landowners and have sought to rein in state partnerships with private companies on toll roads. Both ideas have been pushed by Gov. Rick Perry as an answer to traffic congestion and tax revenues that are short of meeting road needs.

Chase said that before launching the Keep Texas Moving campaign, “We were rightly subject to criticism — maybe we overreacted and overdid it ….. that nobody understood any dynamic of the toll road program.” He said that gap in information ranged from how land was acquired to the mechanics of entrances and exits: “We decided to answer all of those on the Keep Texas moving Web site and then also drive people to the public involvement process.”

But critics such as Terri Hall of Texans Uniting for Reform and Freedom said the agency crossed the line. TURF filed a lawsuit, recently dismissed in state court, contending the campaign violated a prohibition on state officers or employees using their authority for political purposes. TURF plans to appeal the dismissal.

Permitting single occupant vehicles to pay toll for HOV lanes actually discourages carpooling

Link to article here. Houston’s I-10/Katy Freeway expansion (paid for with gas taxes) will allow single occupant vehicles to use the new HOV lanes if they pay a toll (now called HOT lanes). So much for encouraging carpooling…they’re also increasing the number of occupants needed to qualify for the HOV lane! Wouldn’t want to dip into those toll revenues…

HOT Lanes Discourage Carpooling
High Occupancy Toll lanes in some, but not all, states actively discourage carpooling.
The Newspaper.com
July 14, 2008

95 Express Lanes application“High occupancy” use of so-called High Occupancy Toll (HOT) lanes is actively discouraged in some states to ensure the greatest number of drivers pay for the use of roads. As the US Department of Transportation continues to pressure states to turn existing High Occupancy Vehicle (HOV) lanes into toll lanes, HOT advocates assure carpoolers that tolling will not affect them. Practices adopted by the most recently opened HOT projects suggest this claim may be misleading.

In the 1990s, congressional mandates forced states to adopt HOV lanes as an environmental improvement measure. These lanes promised to encourage ride sharing, thereby reducing the number of vehicles on the road. Supporters argued that this reduction would both lessen congestion in free travel lanes and improve overall air quality. For example, if a group of friends wanted to take the freeway to attend a distant event during rush hour, they could choose to take one vehicle instead of three in return for the benefit of a speedier journey in the special carpool lane.

Such impromptu carpooling efforts are denied free access to the high occupancy lanes in the country’s newest federally funded project. The South Florida 95 Express HOT lanes require anyone wishing to take advantage of high occupancy status to pre-register, obtain a set of decals and pay for a SunPass toll transponder. Once approved and the driver’s transponder is activated, those carpool journeys deemed acceptable to the Florida Department of Transportation will be free. Those wishing to register must provide extensive personal details to the state-operated toll road and meet a detailed set of criteria (view application form, 150k PDF).

  • Participants must live within a three-mile radius
  • Participants must work within a one-mile radius
  • Participants must have a start and end their work day within 30 minutes of one another

“If any member of the carpool does not meet the criteria, the carpool registration request will be rejected unless additional information is provided that would constitute a 3+ commuter carpool,” South Florida Commuter Services explains on its website.

The only exception to the detailed distance criteria is that accepted participants are allowed to meet at an approved Park-and-Ride lot. The system offers very little flexibility. If one member of the carpool drops out, a new co-worker cannot join without first submitting his personal details and having his application processed. Decals also expire every six months, requiring constant renewal.

Although Florida imposes these restrictions, Colorado does not. Colorado’s state-owned Interstate 25 Express Lane project is designed to allow impromptu carpoolers and motorcyclists to continue with the same free and easy use of HOV lanes. To avoid a registration bureaucracy, the state created two separate lanes for entering the HOT facility — one for toll payers and one for carpoolers. Strategically placed police enforcement zones on the side of the lanes maximize opportunities for the ticketing of solo drivers who might venture into the untolled carpool lane. Once motorists pass the toll collection zones, they are allowed to use any lane.

Upcoming projects have not been forthcoming about whether a Florida or Colorado model of operation will be put in place. For example, Virginia’s Interstate 495 Capital Beltway HOT lane project, which is run by the Australian company Transurban, has kept carpool requirements quiet while the project is still under construction.

“Detailed plans and processes for obtaining any required transponder will be communicated to all users of the HOT lanes prior to the lanes opening,” the project website explains. “Fluor-Transurban and VDOT will conduct extensive community education efforts to ensure motorists understand how to use HOT lanes.”

According to Virginia’s contract with Transurban, taxpayers would have to make payments to Transurban if the HOT lanes actually ended up encouraging carpooling (details).

The story is similar for hybrid vehicles. Although the owners of these politically favored automobiles do not need to go through as much hassle to obtain free use of certain HOT lanes, their free ride could be short-lived. In Colorado and Florida, hybrid owners must buy a toll transponder and send in an application containing the hybrid’s license plate and, in Colorado, the vehicle identification number. Owners will then receive a decal to place on their car and driving will be toll free from that point forward on participating roads.

There are strict caps on the favoritism. Colorado, for example, will only allow 2000 hybrids to take advantage of HOT lanes and will only consider allowing more if it does not impact toll revenues significantly.

“The EXpressToll transponder account may be utilized to implement tolling upon hybrid vehicles in the event degradation of travel speed occurs in HOV and express lanes,” Colorado’s Department of Transportation explains on its website. “Your EXpressToll transponder account will not be charged without advance notice and you will first be given the opportunity to cancel your account and return your transponder.”

Hybrids will not have free use of the Virginia HOT lanes.

TURF goes to Washington

San Antonio Toll Party and TURF Founder, Terri Hall, was honored to speak at the Freedom March in Washington D.C. July 12, sharing the stage with national activists, talk show hosts, authors, and elected officials, including Howard Phillips, Naomi Wolff, Chuck Baldwin, and Ron Paul. The subjects covered ran the gamut from American foreign policy, the problems and power of the federal reserve, the Real ID, and Constitutional government, to the North American Union, and the Trans Texas Corridor/NAFTA Superhighways.

Below is the text of the speech Hall delivered to the crowd of 12,000 patriots from all over the country:

I think the words of a patriot of the past, Thomas Paine, that were uttered on December 23, 1776, reflect where we find ourselves again today in America.

He said:

“THESE are the times that try men’s souls. The summer soldier and the sunshine patriot will, in this crisis, shrink from the service of their country; but he that stands by it now, deserves the love and thanks of man and woman.

Tyranny, like hell, is not easily conquered; yet we have this consolation with us, that the harder the conflict, the more glorious the triumph. What we obtain too cheap, we esteem too lightly: it is dearness only that gives every thing its value.”

Is that not so true today? Fellow Patriots, the Trans Texas Corridor and the widespread proliferation of toll roads, particularly the use of public private partnerships to exploit the eminent domain powers of govt and join it with the financial self-interest of private corporations, that is about to befall not only Texas but our country, is nothing more than an all out assault on our freedom: the freedom to travel, the freedom to own private property, the freedom from oppressive taxation and overbearing government. And that, my friends, is tyranny! Though not easily conquered, it can and must be crushed.

The NAFTA Superhighway, known as the Trans Texas Corridor to Texans and called a myth by those trying to silence the truth, is very real and even has some segments already under construction. It’s a 4,000 mile, multi-modal network of toll roads, rail lines, utilities, telecommunications, and pipelines of all sorts. It will be up to 1,200 feet wide (4 football fields wide) and will take a total of 580,000 of private land. Two foreign companies partnering with an American company have been given the rights to develop the TTC, which includes the right to build the most lucrative segments without being subjected to competitive bidding, leaving the taxpayers to subsidize the parts that aren’t toll viable.

The TTC will literally bisect whole cities and towns slicing them in two giving residents, farmers, and schoolchildren no access to the other side of this 1,200 foot wide tollway. In fact, the law states the private operator only has to build overpasses where the corridor intersects state hwys and interstates so on TTC-35 there are only 5 exits in the entire state of Texas!

So make no mistake, this nightmare called the TTC is alive and well. We’ve personally attended most all of the nearly one hundred TTC hearings since 2006. When more than 40,000 Texans have gone on record against it, politicians take notice. But instead of KILL this nightmare, they try to find new ways to put lipstick on their pig.

There was a recent announcement disguised as a victory for angry farmers and ranchers, where TxDOT said it would now expand the existing highway system to build TTC-69 instead of building a massive new corridor through rural Texas. But guess what? There’s always a catch when billions of dollars are to be made, and when multi-national corporations are chomping at the bit to get their cheap Chinese goods into the U.S. exploiting cheaper Mexican ports, Mexican trucks, and Mexican labor.

The private “partners” conducted toll viability studies and found the new corridor route wasn’t a money-maker because it bypassed all the urban areas where beleaguered commuters could be forced to pay tolls to get out of congestion. So they had to go back to the “free” roads that would have been the toll operators’ primary “competition” to their toll revenues.

So now they’re going to toll those existing roads and kill any competition. See how this isn’t free market? Oh they’ll tell you your free lanes will still be there, but they’re fixin’ to do what they’re about to do to a freeway near my home, and that is, toll the existing freeway lanes and make the only free lanes, frontage roads. Calling it highway robbery isn’t hyperbole! So it was really the private operators, not TxDOT or the politicians, that changed the route of the TTC-69 and, believe me, it’s no victory. It can still be a 1,200 wide privatized, foreign-controlled toll road with most of the profits leaving our country.

Within TWO weeks of that announcement, TxDOT signed a public private partnership contract with ACS of Spain and Zachry of San Antonio that gives them 12% guaranteed annual profits, a no bid right to cherry-pick the most lucrative segments to build, and they’re not even bringing their own money to the table since 3/4 of the construction cost will be paid for with YOUR MONEY…that’s right Texas lawmakers are stealing YOUR federal taxpayer backed bonds and loans to build the NAFTA superhighway and give all the profits to Zachry and ACS of Spain!

We’ve been brow beat with a pack of empty talking points by Reason Foundation and many libertarian think tanks, that these public-private toll deals are the silver bullet to funding infrastructure without having to raise taxes, because the private partners bring all the money to the table, not cash-strapped govt, and it’s the private partner, not the taxpayers, who carry the financial risk.

Well, all you have to do is dig into any one of the 3 contracts in TX and those in other states (Indiana, Illinois, and Virginia) to know that not one of those things is true. First of all, a toll is a tax! Second, there is no risk to the private operator when 3/4 of the construction cost is being paid by the taxpayers and when the state grants investors a non-compete agreement that prohibits any expansion of or building of free roads surrounding their tollways guaranteeing congestion on free lanes for a half century or more and indebting us for generations. One contract even gives TxDOT a financial incentive to lower the speed limit on the competing “free” interstate, I-35, to drive more traffic to the high speed Trans Texas Corridor,

Our government has become the puppet of private industry and they’ve figured out how to team-up to make billions off the public’s roadways. These highways belong to WE THE PEOPLE, not the government, not the road lobby.

They have NO right to steal our land in the name of “public use” when it’s really about private gain and big government profiteering that will relegate those who cannot afford the tolls to second class citizens. Eminent domain has always been used for roads, but now for the first time, the government can literally steal your land, pay you next to nothing for it, and give it to a private company for private profit. It’s the Kelo vs. New London case applied to roads.

In Texas, they even passed a law, called quick take, that allows the govt to vacate the landowner within 90 days of notice of condemnation whether or not your case is settled. This almost guarantees the landowner will have to take the state’s offer, because who can re-locate hundreds of head of cattle in 90 days without compensation?

There is a massive war going on in this country between the pro-privatization special interest groups and freedom loving Americans. The laws have already been dramatically altered to allow these PPPs, and this Administration and Governors like ours, Rick Perry, and Indiana’s, Mitch Daniels, have orchestrated a shift away from an affordable, gas tax funded freeway system to a new policy of prolific and oppressive toll taxation. They’re planning to toll the living daylights out of urban commuters in order to give their cronies government-sanctioned monopolies over YOUR roads that you depend for daily living.

Today we are in uncharted territory at $4 a gallon for gas, above the inflation adjusted high of 1980. The mentality inside this building is that no matter what they decide to charge us in new toll taxes, that motorists will pay it. They know we have to get to work. We won’t have real alternatives.

This is oppressive taxation on top of skyrocketing fuel costs. There’s only so much money in the family budget that can go to transportation before it takes money away from the necessities. We already see the dramatic decline of the standard of living in America in a very short period of time. It’s only going to get worse, they tell us, in order to condition us into accepting the globalists’ agenda.

So isn’t this what we’re conditioned to accept in government? We’re endlessly being asked to tighten OUR belts, while both our state and federal governments squander our gas taxes on frivolous earmarks that don’t even pertain to roads, like the bridge to nowhere?

How about TxDOT spending $9 million of taxpayer money to wage an ad campaign to advocate tolls roads and the Trans Texas Corridor? TURF filed a complaint with the Travis County District Attorney’s office immediately upon learning of this illegal use of taxpayer money. The DA’s office did nothing. So we filed a lawsuit in civil court to stop TxDOT from spending anymore of our money on taxpayer funded lobbying.

• Through our lawsuit we’ve discovered that indeed TxDOT has been engaging in illegal lobbying. They can’t say they’re not lobbying when invoices show they’ve hired 5 registered lobbyists to the tune of $100,000 a month to lobby elected officials in Washington particularly targeting local elected officials in the path of the Trans Texas Corridor.
• We found documents that show the purpose of the ad campaign is to “neutralize” toll and TTC opponents and to target counties opposed to the TTC in order to turn the tide of opposition.
• PR firm stated this in their proposal: “The political environment needs to be changed to make it less hostile to the TTC.”  The goal of the campaign is to define the benefits of the TTC to the majority of Texans and help inoculate it from negative attacks.”

• They’ve conducted push polls on the taxpayers’ dime to garner support for the TTC.
• TxDOT was told by the Transportation Commission to show the “DOUBLE TAXATION” claim of toll opponents is untrue, which is illegally engaging in a political policy debate when state agency’s are to implement, not shape of make policy. The testimony from someone in the State Auditor’s office found TxDOT is knowingly ginning-up false gas tax numbers and funding figures in order to push toll roads!

I’m afraid this doesn’t stop in Texas. Just weeks ago, a new lobby group called Transportation Transformation or T2 announced that not only TxDOT, but 3 other state DOTs have officially teamed up with the bond investors and private toll road and corridor interests to directly lobby Congress here in Washington for more public private partnerships and toll roads.

This is a recipe for tyranny! We must demand political reform to ensure checks and balances and put the power back in the hands of the PEOPLE as the 10th Amendment to the U.S. Constitution guarantees a free people.

So I ask you, have we had enough? I cannot help but be inspired by the resolve of another patriot, Patrick Henry, who said in his famous speech that sparked a revolution:

“Is life so dear or peace so sweet as to be purchased at the price of chains and slavery? Forbid it, Almighty God! I know not what course others may take, but as for me, give me liberty or give me death!”

We need to ask ourselves, will we allow our government to shackle us with oppressive taxation just to get to work and go about daily living? Will we allow this Administration and the state governments aiding it to carve a 1,200 ft wide swath through the heartland of America and sacrifice what vestige of private property rights we have left in the name of foreign trade and commerce? Or will we continue to fight a new revolution, a taxpayer revolt, a political movement to stop the Trans Texas Corridor, the NAFTA superhighways, to stop tolls across Texas and America, preserve private property rights, our way of life and our precious freedoms bought with a price from those who came before us?

They, those who have sold out American freedom in favor of the almighty dollar and the intoxication of power, aren’t counting on you and me and this freedom movement taking our government back. But as for me, and I think all of you here today and the hundreds of thousands who couldn’t be with us, the resounding answer is: give us liberty!

Toll lanes create, not solve, congestion

Link to article here. More proof that toll lanes don’t solve congestion, they actually create congestion for profit.

New Virginia Toll Lanes Designed to Create Congestion
Illegal political donations helped give Australian company full control over Virginia transportation until the year 2087.
The Newspaper.com
July 8, 2008

BeltwayIllegal political contributions helped an Australian firm land a lucrative toll road deal that grants the company unprecedented power over Northern Virginia’s transportation future. Last week, Transurban wrote and asked state lawmakers to return checks that the Melbourne-based toll road operator had written in violation of federal campaign laws (details). But the deal these contributions helped bring about has already been finalized.

In June, the US Department of Transportation created a first-of-its-kind $1.6 billion financing package that consisted of tax-free bonds, loans and state taxpayer grants to support the project that will add a pair of High Occupancy Toll (HOT) lanes to the Interstate 495 Capital Beltway just outside of Washington, DC. To this amount, Transurban only added $349 million of its own capital — less than the cost of interest — toward the construction of the toll lanes (details).

In return for that small investment, Transurban received from Virginia officials the right to demand payment from state taxpayers any time that improvements are made to a number of free roads near the Beltway. In effect, the contract between the Virginia Department of Transportation (VDOT) and Transurban is designed to ensure the area remains sufficiently congested so that motorists will have an incentive to pay to use the toll lanes.

For example, VDOT can make no changes, expansion or improvements to the free lanes on the Beltway until the year 2087 unless the agency first consults Transurban. VDOT agreed that if any such changes were made to the general purpose lanes without Transurban’s explicit approval, they would at least be made in such a way as to guarantee the company maintained a high level of profit.

“If the department [VDOT] determines that additional traffic lanes on the Capital Beltway Corridor are in the state’s best interests, the department shall consult with the concessionaire [Transurban] as to an appropriate strategy to implement such additional traffic lanes,” the contract states. “At the department’s sole discretion, [it shall] permit the construction of additional lanes as part of the project with a view to minimizing any detrimental impact on the project or its ability to generate revenues…”

In the past, most toll road deals included “non-compete” clauses that strictly prohibited transportation departments from making improvements to nearby, competing roads. They did so because free-flowing traffic on alternative routes would hit the toll road’s bottom line. Simply put: why take a toll road, when there’s a free alternative?

Explicit non-compete provisions have become politically controversial, and as a result companies have recently embraced a more subtle approach that accomplishes the same goal. For example, the contract for the State Highway 130 toll road in Austin, Texas included a provision giving the Texas Department of Transportation a financial incentive to lower the speed limit on the nearby Interstate 35 freeway. As first reported by TheNewspaper last year that, this provision was designed to create congestion and inconvenience for the motorists who choose the free alternative route (details).

For the Beltway project, improvements such as adding additional free lanes to the highway are absolutely permitted — for a price. The contract considers any improvement to the Beltway to be a “Department Project Enhancement” which means that Virginia taxpayers must pay Transurban for the right to improve the free portion of the highway. Given VDOT’s stated lack of funding, adding an extra monetary premium to the cost of any improvements effectively gives the foreign company the ability to prevent such projects from happening.

The effect is not limited to the Beltway. The contract specifies that payments called “compensation events” must be made in the event that the state decides to improve the connections between the Beltway’s general purpose lanes and the Dulles Toll Road or any “improvements to I-66 outside the Capital Beltway Corridor” made over the course of the next eighty years.

An “independent engineer” determines how much compensation Transurban will receive by calculating an expected traffic impact. This means that the more the public is likely to use a free alternative, the more Transurban is paid. In Sydney, Australia, for example, the Lane Cove Tunnel toll project contained a provision requiring the state government to narrow the lanes of a nearby free road to generate congestion that would drive motorists into the tunnel. After the state decided to postpone the narrowing until after an election, the toll road concession was paid A$25 million (US $24 million) for that compensation event.

Transurban’s control goes beyond lane improvements. Although the stated purpose of the “high occupancy” part of the toll lane project is to encourage motorists to carpool, the contract contains a provision directly designed to discourage any increase in the number of motorists sharing rides.

“The department agrees to pay the concessionaire, subject to Section 20.18, amounts equal to 70% of the average toll applicable to vehicles paying tolls for the number of High Occupancy Vehicles exceeding a threshold of 24% of the total flow of all permitted vehicles that are then using such toll section going in the same direction for the first 30 consecutive minutes during any day, and any additional 15 consecutive minute periods in such day, during which average traffic for a toll section going in the same direction exceeds a rate of 3,200 vehicles per hour based on two lanes,” the contract states.

This means if carpooling becomes popular on the Beltway, taxpayers could end up making multi-million dollar annual payments to Transurban.

Finally, the contract insists that if any homes happen to lie in the way of the the construction of the new lanes, Transurban will pay no more than the current market value to purchase the land in question. If the owner refuses to move, VDOT will condemn the property and confiscate it for the use of the private, for-profit company through eminent domain. The Beltway project, however, was designed to be built within existing VDOT right-of-way to ensure the exercise of this power would not be needed.

Transurban shares on the Australian Stock Exchange jumped 15 cents to A$4.60 today after the company announced quarterly earnings results. On Virginia’s Pocahontas Parkway, the company reported a 7.8 percent increase in revenue over the same quarter last year, despite a 6.9 percent drop in the number of motorists using the toll road. It credited the positive performance to an 11 percent toll hike in January and the cancellation of the discount previously given to transponder users.

Relevant excerpts from the Transurban contract are available in a 260k PDF file at the source link below.

Source: PDF File Comprehensive Agreement Relating to Route 495 HOT Lanes – Excerpts (Virginia Department of Transportation and Capital Beltway Express, 12/19/2007)

High gas prices = death of the suburbs as economics forces change

Link to article here.

It’s obvious to everyone but road builders and politicians that $4 a gallon for gas is the breaking point for Americans. There is no more money in the family budget for transportation, and it’s causing major lifestyle changes and the emptying of one’s savings account just to fill the gas tank today.

There just aren’t enough motorists with the discretionary income to make toll roads financially viable any longer. The massive amounts of leveraged debt to erect these toll projects is a house of cards the size of the mortgage crisis or BIGGER. We all know who bailed that out, we, the taxpayers, did. Time to head this crisis off at the pass and defeat this push for toll roads NOW!

America’s love affair fades as the car becomes burden of suburbia
By Paul Harris
The Observer (UK)
Sunday, July 6, 2008

The nation of road movies, freeway freedom and dreams of endless horizons is waking up to the reality of soaring fuel prices. Paul Harris in Riverside, California, reports that people are leaving their gas guzzlers in the garageIt is known as the Inland Empire: a vast stretch of land tucked in the high desert valleys east of Los Angeles. Once home to fruit trees and Indians, it is now a concrete sprawl of jammed freeways, endless suburbs and shopping malls.

But here, in the heartland of the four-wheel drive, a revolution is under way. What was once unthinkable is becoming a shocking reality: America’s all-consuming love affair with the car is fading.

Surging petrol prices have worked where environmental arguments have failed. Many Americans have long been told to cut back on car use. Now, facing $4-a-gallon fuel, they have no choice.

Take Adam Garcia, a security guard who works near the railway station in Riverside. Like many Inland Empire residents, he commutes a huge distance: 100 miles a day. He used to think nothing of it. But now, faced with petrol costs that have tripled, he is taking action. He has even altered the engine of his car to boost its mileage. ‘I have to. Everyone does. I can’t afford to drive as much as I did,’ he said.

Recent figures showed the steepest monthly drop in miles driven by Americans since 1942. At the same time car sales are collapsing, led by huge SUVs.

General Motors, once the very image of American industrial might, is in deep trouble. Cities are now investing in mass transit, hoping to tempt people back into town centres from far-flung commuter belts where they are now stranded by high petrol prices.

Jonathan Baty used to be a pioneer. The lighting designer has cycled to work every day since 1993. It’s a nine-mile round trip through the heartland of a car-based culture once famously termed ‘Autopia’. But now Baty has company on his daily rides as others choose two wheels rather than four to navigate southern California’s streets. ‘We have seen a whole emergence of a bike culture in this area. There is a crescendo of interest,’ said Baty, who does volunteer work for a cycling group, Bicycle Commuter Coalition of the Inland Empire.

In Riverside, bus travel is up 12 per cent on a year ago, rising to 40 per cent on commuter routes. Use of the town’s railway link is up eight per cent. A local car pooling system is up 40 per cent. It is the same in the rest of the US. In South Florida a light rail system has reported a 28 per cent jump in passengers. In Philadelphia one has shown an 11 per cent rise. Even nationwide scooter sales have shot up. At the same time car sales are hitting 15-year record lows. Last week major American car-makers reported a devastating 18 per cent drop in car sales.

The numbers point to a more fundamental shift. In America car sales carry a symbolic value that transcends the wheeler-dealering of the showroom. This is a nation of fabled road trips and Route 66. ‘There is an American dream of mobility and freedom and wealth. The car is part of all that,’ said Professor Michael Dear, an urban studies expert at the University of Southern California.

In the 1950s the confident nation that helped win the Second World War was expressed in classic car designs of huge fins and open tops. By the 1990s it had become the Hummer, a huge bulking car born from the military. Now there is to be another shift. For, hidden within the car sales figures, is a more complex story than a simple fall. Sales of big cars are plummeting while smaller vehicles, especially fuel-efficient hybrids, are replacing them.

GM has now closed SUV production at four plants. Its Hummer brand is up for sale, or might even be closed. GM is ploughing huge resources into its 2010 launch of the Chevy Volt, a hybrid car that may get up to 150 miles a gallon. It needs to. GM’s share price recently hit a 54-year low, prompting one top investment bank to warn that the firm could go bankrupt.

The Volt, and cars like it, could become symbols of a new more conservation-minded car age. As Americans enjoyed the 4 July holiday weekend, increasing numbers of them were staying at home rather than hitting the road. Newspapers were full of tips for ‘stay-cations’, not weekend breaks away. Customs once scorned, such as car pooling and cutting out trips to the mall, are now commonplace. The fact is, the vast majority of Americans cannot give up their cars altogether. Too many cities lack any reliable public transport.

Adam Garcia is one of those caught. He does two jobs and his daily road trip by car is a necessity. ‘We don’t have much of a choice. I have to drive,’ he said. Sacrifices come elsewhere, in giving up trips to the cinema and to see friends.

But America’s changing relationship with the car is just part of the story of how the most powerful nation is changing in the face of the oil price rise. America has been built on an oil-based economy, from its office workers in the suburbs to its farmers in the fields.

Since the 1950s and the building of the pioneering car-orientated suburb of Levittown in Long Island, the American city has been designed for the convenience of the car as much as its human inhabitants. People live miles away from jobs, shops or entertainment. If you take away cars, the entire suburban way of life collapses. To some, that development is long overdue.

‘Suburbia has been unsustainable since its creation,’ said Chris Fauchere, a Denver-based film-maker who is producing a new documentary on the issue called The Great Squeeze. ‘It was created around cheap oil. People thought it would flow easily from the earth forever.’

Fauchere’s film, due out later this year, aims to tackle the profound changes caused by a world where oil is becoming scarcer. He does not think that it is going to be easy for America to make the adjustment. ‘It is going to be tough. It is like a chain reaction through the economy. But if you look at history, it is only crisis that starts change,’ he said.

The suburbs are already being hit. As cars become more expensive, the justification for suburbs seems to disappear. Some commentators have even suggested that suburbs – once the archetype of an ideal American life – will become the new slums.

In the face of expensive fuel and crashing property prices, the one-time embodiment of a certain American dream will become crime-ridden, dotted by empty lots and home to the poor and unemployed. That is already happening as crime and gang violence has risen in many suburban areas and tens of thousands of homes have been reposessed because of the mortgage crisis.

In effect, suburbs will become the new inner cities, even as once-abandoned American downtowns are undergoing a remarkable renaissance. Even malls, the ultimate symbol of American life since the war, are undergoing a crisis as consumers start to stay away.

But there are even deeper changes going on. The car, the freeway system and cheap air travel made America smaller. Everywhere was easily accessible. That, too, is ending. Higher fuel prices have dealt a terrible blow to America’s airlines. They are slashing flights, raising costs and abandoning routes. Some small cities are now losing their air connections.

In effect, America is becoming larger again. That will lead to a more localised economy. To many environmentalists that is a blessing, not a curse. They point out that cheap fuel for industrial transport has meant the average packaged salad has travelled 1,500 miles before it gets to a supermarket shelf.

‘Distance is now an enemy,’ said Professor Bill McKibben, author of the 1989 climate-change classic The End of Nature. ‘There’s no question that the days of thoughtless driving are done.’

The worst hit parts of the US are not yet the suburbs or the freeways of southern California, but the small towns that dot the Great Plains, Appalachia and the rural Deep South. Even more than the Inland Empire, people in these isolated and poor areas are reliant on cheap petrol and much less able to afford the new prices at the pump. Stories abound of agricultural workers unable to afford to get to the fields and of rural businesses going bust.

Even farmers are not immune. They might not need a car to get to their fields but their fertilisers use oil-based products whose prices have gone through the roof. A handful have started using horses again for some tasks, saving petrol on farm vehicles.

The American dream of the last half century is thus changing. The car and its culture is now under a pressure unimaginable even a few years ago. ‘The frontier of endless mobility that we’ve known our entire lives is closing,’ said McKibben.

America’s excess has had many imitators. Recently a delegation of Chinese government officials and architects visited an Arizona suburb near Phoenix. Approving notes were taken as they surveyed the luxurious car-driven suburban lifestyle on display. This was just one of the many delegations that regularly come from the Far East or South America.

Even as America is sobering up from its excess of cheap oil, other parts of the world are seeking to join the party. They, too, want homes far from dirty city centres, huge open roads and fast cars. It is still a beguiling vision of freedom, mobility and bountiful riches.

McKibben spent last week on a visit to Beijing. He was worried about what he saw. Even as America’s obsession with the car lifestyle is ending, others are embracing it. ‘The Chinese have spent the Bush years starting to build their own version of America. A key question for the planet is whether they still have time to build a version of Europe instead – global warming will probably hinge on the answer to that question,’ he said.

Talk of $200/barrel for oil, $6/gallon at pump!

Link to article here.

Oil’s Rapid Rise Stirs Talk of $200 a Barrel This Year
Long List of Factors Keeps Prices High; Releasing Reserves?
By NEIL KING JR.
Wall Street Journal
July 7, 2008; Page A6

Oil’s historic ascent from $100 to nearly $150 a barrel in just six months is lending weight to a far grimmer prediction: Crude could reach $200 a barrel by the end of the year.

Oil at that price would wreak deeper havoc on the world’s airlines and automobile industries.

[Chart]

In the U.S., $200 crude would push the price of gasoline to well over $6 a gallon, causing commuters to alter their driving habits more sharply than they have already, while putting extreme strains on large sectors of the U.S. economy. In Europe, it would stir more political unrest and increase the clamor to cut the continent’s stiff petrol taxes. In Asia, governments would be under pressure to cut fuel subsidies and risk a popular backlash.

U.S. benchmark crude prices leapt 3.6% last week, closing before the Independence Day holiday at a record $145.29 a barrel. Roughly halfway through the year, oil prices have soared 50% since Jan. 1 and have doubled since the same time last year. (See related article.)

Few oil watchers are now ready to bet that oil will hit $200 a barrel by New Year’s Eve. But nearly all are wary of predicting how and when oil’s upward stampede will be reversed.

What makes the market so unpredictable, analysts say, is that prices are being pushed by such a wide array of factors, while no single force has emerged with the power to throw them in reverse.

“Crude is going up,” said Dave Pursell, an oil analyst at Tudor Pickering in Houston, “because there is nothing strong enough yet to push it down.”

In Washington, deepening fears that oil prices will shoot still higher have stoked talk in Congress and within the Bush administration of using one of the last remaining cudgels to try to reverse the price rise: a sharp and sustained release of oil from the U.S. Strategic Petroleum Reserve.

Those discussions remain preliminary, though, while most senior administration officials remain opposed to such a move, because the oil stored in salt mines is meant for release in genuine supply emergencies.

The list of forces shoving prices upward is long: a weak dollar driving hot money into commodities; jitters over a possible military conflict with Iran; soaring costs and chronic project delays in the world’s oil patch; concerns over scarce supplies and long-term production declines; and continued robust demand growth in much of the developing world.

Oil ministers and top petroleum executives have added to the alarm. Paolo Scaroni, head of Italy’s biggest oil-and-gas company, Eni SpA, told an Italian newspaper last week that he could see prices hitting $200 a barrel this year.Chakib Khelil, president of the Organization of Petroleum Exporting Countries, predicts that crude could go as high as $170 a barrel this summer.

Oil’s seemingly unstoppable rise has also scared off some of the very financial players that would otherwise temper the market. Oil producers who would normally lock in high prices by hedging on the futures market have now backed off, assuming that prices will continue to rise.

That has fueled the upward momentum as financial players continue to bid up oil on the futures market, said Larry Goldstein, an economist at the Energy Policy Research Foundation. “The problem is that the natural hedgers, the producers themselves, are shying away, while the buyers get bolder,” Mr. Goldstein said.

Geopolitics, particularly the fear of a potential Israeli or U.S. attack against Iran, have also re-emerged as a significant factor in the market. Some investment houses were saying last week that it was more likely than not that a war with Iran would break out this fall.

With so many forces arguing for higher prices, the big question is: What would spook the market enough to cause prices to fall?

So far, falling gasoline use in the U.S. has done nothing to put a damper on prices, largely because growing demand elsewhere in the world has managed to keep global supplies tight.

“The reality of it is, swings in U.S. consumption just don’t matter that much anymore,” said Jeffrey Rubin, chief economist at CIBC World Markets, who is predicting that oil will average $200 a barrel in 2010.

The one shift in demand that would have a serious price impact would be any sign of diminished thirst for fuel in China. Speculation has run high for months that Chinese demand may have surged artificially in advance of the Beijing Olympics as the country turned to oil over coal for power generation to ease pollution. It is also unclear whether China stockpiled gasoline and diesel to avoid any shortages.

“But if consumption roars on even after the Olympics, then the upside pressure on prices will remain pretty strong,” said Stephen Brown, an energy economist at the Federal Reserve Bank of Dallas.

Another force that could shove prices down in a hurry would be signs of a significant buildup in oil inventories in the U.S. But even with oil use down in the U.S., crude stockpiles remain unusually low. The U.S. now has just over 19 days of total commercial supplies, compared with 23 days worth at the same time last year.

Alarmed over the economic impact of soaring oil prices, Saudi Arabia tried last month to hammer the market back down by boosting its monthly output and promising a dramatic long-range increase in its production capacity. But neither announcement by the world’s largest oil producer had any perceptible affect, further underscoring how weak the market’s traditional levers now are.

Some advocates are clamoring for the Bush administration to take a more dramatic step and release millions of barrels from the U.S. strategic reserves, which contain around 706 million barrels. The House of Representatives is weighing legislation to force a release from the reserves, while support for such a move also appears to be building in the Senate.

The administration strongly opposes using the reserve for market interventions.

A release of two million barrels a day for long as a month, analysts say, could make a sharp impact on prices, in part because the barrels would be sold at auction, thus allowing buyers to set the oil’s value. The U.S. consumes a little more than 20 million barrels a day.

“We have exhausted all other short-term policy options,” said Mr. Goldstein, a veteran of the Washington energy establishment who is among those pushing aggressively for a significant release from the reserves. He argues that the U.S. Energy Department should step in to tamp down oil prices and thus prevent further damage to the U.S. economy.

But others worry that even that step could backfire. For one, sky-high prices have made refiners all the more reluctant to build up oil stocks.

“And even if you release 20 or 30 million barrels, people are still going to be worried about Iran or something else,” said Michael Lynch, a Massachusetts-based oil analyst who is among the many who believe that oil prices are already far too high.

 Pump Politics: Who Wins From $4 Gas?

Jobs slashed, not the time for toll roads

Link to article here.

Employers cut jobs for 6th straight month
By JEANNINE AVERSA
Associated Press
7/3/2008

Employers cut payrolls by 62,000 in June, the sixth straight month of nationwide job losses, underscoring the economy’s fragile state. The unemployment rate held steady at 5.5 percent.

The latest snapshot of business conditions, released by the Labor Department on Thursday, showed continued caution on the part of employers who are chafing under high energy prices and are uncertain about how long the economy will be stuck in a sluggish mode, reflecting fallout from housing, credit and financial troubles.

Heavy job losses in construction, manufacturing and financial services, along with cuttbacks in retailing, eclipsed job gains in education and health services, leisure and hospitality, and government.

The report, however, weak, was largely on target with economists’ forecasts. They had been expecting employers to reduce payrolls by around 60,000 jobs in June and for the unemployment rate to slip a notch to 5.4 percent.

The jobless rate spiked to 5.5 percent in May. That marked the biggest over-the-month increase in two decades and left the rate at its highest since October 2004.

Job losses in both April and May turned out to be considerably deeper than had been thought. Payrolls dropped by 67,000 in April, versus the 28,000 previously reported. And, losses in May came to 62,000, rather than the 49,000 initially estimated.

So far this year, the economy has lost a total of 438,00 jobs, an average of 73,000 a month.

The economy is the top concern of voters. The faltering labor market is a source of anxiety not only for those looking for work but also for those worried about keeping their jobs during uncertain economic times. It also can spell more trouble for an already shaky economy if people and businesses were to hunker down further.

Private analysts predict the economy will continue to shed jobs in the months ahead, pushing the unemployment rate higher.

“The economy is at risk of a hard landing,” said Brian Bethune, economist at Global Insight.

The number of unemployed people in June was 8.5 million, up from 7 million a year ago.

In a separate report from the department, the number of newly laid off people signing up for unemployment insurance rose sharply last week. New applications jumped by 16,000 to 404,000, the highest level since late March. The increase was bigger than economists were expecting; they were forecasting claims to rise to around 385,000.

With inflation concerns growing, the Federal Reserve last week ended an aggressive rate-cutting campaign, started last September to shore up economic growth.

Fed Chairman Ben Bernanke and his colleagues are caught between risky crosscurrents of plodding economic growth and spiraling energy and food prices that threaten to spread inflation. Lowering rates further would worsen inflation. But boosting rates too soon to fend off inflation could hurt the fragile economy.

Oil prices on Wednesday hit a new record above $144 a barrel, while gasoline prices reached a new nationwide high of $4.092 a gallon on average, according to AAA, the Oil Price Information Service and Wright Express.

Workers with jobs saw modest wage gains in June

Average hourly earnings rose to $18.01 in June, a 0.3 percent rise from May. That matched economists’ forecasts. Over the past year, wages have grown 3.4 percent, the smallest annual increase since January 2006. Paychecks, though, aren’t stretching as far because of high food and energy prices.

In its latest economic assessment last week, the Fed observed that “labor markets have softened further.”

However, the Fed believed that its powerful series of rate reductions along with the government’s $168 billion stimulus package, including tax rebates, will help lift economic growth over time.

Some economists fear that when the bracing force of the rebates fades, the economy could be in for another rough patch. Those analysts worry that the economy _ which has been coping with sluggish growth at best _ will have a “relapse” and lose momentum near the end of this year.

There’s been a lot of talk about whether the economy is on the brink of, or has fallen into, its first recession since 2001. The official determination, made by a panel of academics, usually comes well after the fact.

Economists expect the unemployment rate to hit 6 percent or higher early next year, even if the economy were to show better growth. Companies will be reluctant to ramp up hiring until they feel certain the economy will stay on firmer footing.

Transurban, toll road firm, made illegal campaign contributions to U.S. politicians

Link to article here.

ELECTION LAW
Toll Road Firm Made Illegal Contributions
Transurban Gave $172,000 To 90 Campaigns in 3 Years

Transurban gave money to Gov. Timothy M. Kaine (D), foreground, and House Speaker William J. Howell (R). Both have pledged to return it.

Transurban gave money to Gov. Timothy M. Kaine (D), foreground, and House Speaker William J. Howell (R). Both have pledged to return it. (By Steve Helber — Associated Press)

Washington Post Staff Writer
Thursday, July 3, 2008; Page B05

RICHMOND, July 2 — A company involved in building the express toll lanes on the Capital Beltway violated federal election law when it contributed $172,000 to 90 campaigns in Virginia over the past three years, company officials said Wednesday.

This Story

Officials at Transurban, a U.S. subsidiary of an Australian company, said they should not have made the donations, because federal law forbids contributions from foreign companies and foreign nationals.

“We made an honest mistake,” said Michael Kulper, Transurban executive vice president. “We are genuinely concerned and upset about it.”

The company sent letters Wednesday to every candidate and political action committee it has contributed to in Virginia, asking for the money to be returned. Many did not know about the problem when they were contacted late Wednesday.

Recipients were Democrats and Republicans, including Gov. Timothy M. Kaine (D), dozens of state senators and delegates, the three candidates for governor next year and Fairfax County Board of Supervisors Chairman Gerald E. Connolly (D), who is running for Congress.

“I was not aware of it,” Del. Phillip A. Hamilton (R-Newport News) said. Hamilton said that a member of his staff monitors his campaign contributions and that he does not track them himself. But he added that if the company asks for its $1,500 contribution back, he will send it.

Charlie Kelly, director of Kaine’s political action committee, Moving Virginia Forward, said any out-of-compliance contributions will be returned immediately. Kaine and Moving Virginia Forward received $9,500. “It was our belief that Transurban USA’s contributions were made in compliance with state and federal law at the time they were made. We received contributions from a U.S. company through U.S. representatives. As such, we had no reason to question the contributions,” Kelly said. “We were disappointed to learn of this issue . . . but we appreciate Transurban’s admission that no one receiving these contributions could have been aware of their noncompliance.”

Transurban has invested $500 million in two projects in Virginia: helping build and maintain high-occupancy toll lanes on the Beltway and maintaining the Richmond-area Pocahontas Parkway toll road. It expects to finalize a third project to create toll lanes on interstates 95 and 395 between the 14th Street bridge and Stafford County. Transurban is working with a second company, Fluor Enterprises, on the Beltway, 95 and 395 projects.

The projects were negotiated through the Virginia Department of Transportation and Commonwealth Transportation Board. But the company has lobbied legislators on a number of bills in recent years.

Company officials were in Richmond on Wednesday to apologize to Secretary of Transportation Pierce R. Homer. “We’ve taken the matter under review and consideration,” Homer said after the meeting.

The General Assembly will return to Richmond on Wednesday to continue a special session on transportation. Many legislators, primarily House Republicans, want to encourage more public-private partnerships, such as the Beltway project, in which companies pay for projects on roads and bridges in return for the right to collect tolls.

“We certainly hope this doesn’t negatively impact on the process,” said G. Paul Nardo, chief of staff to House Speaker William J. Howell (R-Stafford).

Howell’s political action committee, Dominion Leadership Trust, received $12,500, the most of any group or individual, according to the Virginia Public Access Project. Nardo said Howell will cooperate with the company and return the money.

Transurban officials are asking those who received donations to return them. Kulper said the money will be donated to the Court Appointed Special Advocates program, which provides help to abused and neglected children in court. Company officials said they discovered the violations in February and began an internal review. In recent weeks, they contacted the Federal Election Commission, which is looking into the problem and could fine the company.

Transurban, major toll road player, riddled with debt, seeking handouts

Link to article here.

Toll road operator shifts into reverse
By Scott Rochfort
Sydney Morning Herald
June 20, 2008

TOLL road operator Transurban has become the first of an expected long line-up of major infrastructure companies to go to the sharemarket for a handout, after it yesterday announced plans to raise around $1 billion in capital in an effort to reduce the level of debt on its balance sheet.

In a stark reversal to Transurban’s deliberate strategy of gearing-up its balance sheet under former chief executive Kim Edwards in late 2006, the group’s new CEO Chris Lynch said the model of using debt to fund distributions was “not sustainable in this market”.

Advocating a “new investment proposition to the market”, Mr Lynch said the increased cost and difficulty in raising debt meant the company needed to return to a “more basic business philosophy”.

“This is more a fair dinkum business that we’re talking about here. What we’ve got are great assets and we’ve got strong cash flows that will grow coming off [the equity raising],” Mr Lynch said.

Transurban, operator of Sydney’s M2 motorway and Eastern Distributor and Melbourne’s CityLink, maintained its guidance of a 58c payout this financial year.

But in a rude shock to Transurban unit holders reliant on the distributions paid by the company, it said distributions would fall to 22c next financial year.

But Mr Lynch stressed the capital raising and new distribution policy would put Transurban on a sounder footing to allow it to fund new initiatives, such as Vancouver’s Port Mann Highway project for which it is shortlisted.

“We’ll have a lower yield than we would have if we targeted the aggressive debt-based distribution,” he said.

“But we’ll also have a much better growth story because we’ll have an underlying business that can do some things other than figure out how it’s going to feed this big distribution.”

Transurban said a placement of 120 million shares managed by UBS would be fully underwritten by the Canadian Pension Plan, with which it has partnered several toll-road projects.

A further 75 per cent of the group’s planned $239 million (29c per security) second half distribution reinvestment plan has been underwritten by UBS, and up to $100 million of stock will be offered to retail shareholders via a share purchase plan. The purchase plan will be capped at $5000 per unit holder and at a 2.5 per cent discount. In all, the raising will represent about 16 per cent of Transurban’s current market value.

Transurban shares remained in a trading halt yesterday but the move was enough to trigger a sell-off in other toll road operators, such as ConnectEast, the owner of Melbourne’s yet-to-open EastLink. Its shares plunged to a new low.

Macquarie Infrastructure fell 24c to $2.68, while the ports operator Asciano plunged to a new low of $3.32 on concerns it could be forced to raise capital to ease its crippling debts.

It is less than two years since Transurban started loading more debt on to its balance sheet.

At the group’s annual meeting in 2006, Mr Edwards argued the re-gearing of Transurban’s balance sheet would not raise its cost of debt.