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Hunger pangs
By Pat Driscoll
Express-News
August 01, 2007
Saliva drips from the teeth of global investors eyeing toll roads, airports and seaports in the U.S., but more often lately they’ve had to sit, knife and fork in hands, and wait, a recent analysis says.
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(William Luther/Express-News)
In February, more than 650 people showed up for a hearing on proposed toll lanes along U.S. 281 in San Antonio. Almost one in 10 signed up to speak, and most were opposed to the plan. |
The analysis, by Joseph A. Giannone of Reuters, describes the worldwide privatization wave:
The global volume of deals involving public and private infrastructure assets — from power utilities and seaports to airports and toll bridges — last year tripled to $150 billion from the year before.By some estimates, specialist funds have earmarked more than $75 billion for infrastructure investments, which with additional borrowing represents up to $400 billion in dry powder. Some bankers say buying power exceeds $750 billion.
To give you an idea of how much that is, Cintra of Spain and Zachry Construction Co. of San Antonio say they can build a four-lane toll road from San Antonio to Dallas for $6.8 billion, which is more than two thirds of Texas’ highway budget last year.
The Cintra-Zachry toll road is part of the Tran-Texas Corridor, Gov. Rick Perry’s idea to carve 4,000 miles of toll lanes, rail lines and utility lines through rural areas over the century. That’s been estimated at $184 billion.
But drooling investors trying to sink their funds where they can get stable, long-term returns are starving for action.
Giannone said:
All across Wall Street, firms have assembled teams and raised new specialized funds to handle the expected surge of public asset deals.Yet U.S. deal activity has come to a halt amid unexpectedly strong public resistance to parting with taxpayer-funded assets, many of which are monopolies.
Privatization plans have run afoul of legislatures … in recent months, including Indiana, New Jersey and Pennsylvania. In Texas, lawmakers declared a two-year moratorium on privatized highways.
Ah yes, Texas’ moratorium bill, also know as SB 792, the bill that’s so holey it’d be going to church regularly if it could grow legs.
Nearly every toll project in the pipeline, worth some $15 billion in all, was exempted from the moratorium bill. A notable exception to the exemption was U.S. 281 in San Antonio, which means a planned eight-mile tollway there can’t be leased over the next two years.
In June, the Texas Transportation Commission decided to move forward on another 87 toll projects worth $56 billion (list and map), but that was mainly to establish local or state dibs on ownership. Most of them are likely years away, well beyond the moratorium.
But there’s still some fear over leasing toll roads in Texas, and there’s a ripe opportunity to run afoul of the Legislature. In the oven is a sunset review of the Texas Department of Transportation, which lawmakers intend to wrap up in the 2009 session.
Will the heat get turned up?