SPECIAL REPORT: U.S. DOT urges privatization of highways, infrastructure

| 1/8/2007

Monday, Jan. 8, 2007 - The U.S. Department of Transportation is eager to assist states in leasing and selling off their roads and infrastructure to private investors.

Transportation Secretary Mary Peters announced Monday, Jan. 8, that the department has designed model legislation for states to use to authorize public-private partnerships for "building, owning or operating highways, mass transit, railroads, airports, seaports or other transportation infrastructure."

The DOT is using the model to reduce or remove barriers to private investment on the grounds that more lanes and roads will help ease congestion on the highways.

As has been reported extensively by Land Line Magazine, states claim to be strapped for cash for highway and transportation projects.

A highly publicized scenario involved Indiana, where the state legislature and Gov. Mitch Daniels authorized the lease of the 157-mile Indiana Toll Road to private, foreign investors for $3.85 billion in up-front cash. That lease will last 75 years and the private consortium of Cintra-Macquarie will keep the tolls in exchange for maintenance and operation.

The DOT used the Indiana legislation and other states' efforts to privatize in its model legislation for other states.

Illinois leased the Chicago Skyway in 2005 to Cintra of Spain and Macquarie of Australia in the first such privatization effort of its kind, authorized in the August 2005 bundle of federal highway legislation known as SAFETEA-LU.

Twenty-one states and Puerto Rico have some authority for privatizing infrastructure, according to the DOT, but Peters said the model legislation will remove remaining barriers.

Officials in Pennsylvania, New Jersey, Ohio, Maryland, Delaware and Kansas have all recently publicized their interest in privatizing major highways and turnpikes in those states.