Indiana governor in DC to pitch privatization

| Tuesday, May 23, 2006

Indiana Gov. Mitch Daniels is headed to Washington, DC, on Wednesday to testify before a House subcommittee about his “Major Moves” transportation plan and the lease of the Indiana Toll Road to a private foreign investment group for $3.85 billion.

Daniels was invited to testify by the House transportation subcommittee, which is studying the future of infrastructure financing.

Also, Daniels is scheduled to meet with a revenue study commission under the U.S. Department of Transportation umbrella to discuss the “Major Moves” plan.

Privatization is a hot topic on Capitol Hill.

The Bush Administration has been pushing the privatization concept for some time, and renewed that effort in the August 2005 highway bill known as SAFETEA-LU. More recently, Transportation Secretary Norman Mineta said privatization is a good way for states to build more roads and lanes and deal with congestion.

“Major Moves,” approved by the Indiana Legislature in March and signed in April by Daniels, includes a measure to privatize the Indiana Toll Road and use investment dollars to jumpstart other road projects, and reduce a growing road budget deficit.

A group of Indiana residents, including OOIDA Member Randy Nace, are challenging “Major Moves” in St. Joseph County Superior Court on a basis of constitutionality. The plaintiffs contend that the Indiana Constitution requires all revenue from such a transaction to be put toward public debt.

The court challenge includes a countermeasure by Daniels and the defense team, which insists the lawsuit should be declared “public” under state code. That could result in the plaintiffs being forced to drop the lawsuit or pay a bond equal to the funding amount, $3.85 billion.

Judge Michael Scopelitis has taken the issue under advisement and could rule on the bond question and whether the lawsuit is public any day now.

Also scheduled to testify Wednesday in front of the House transportation subcommittee is a Macquarie Infrastructure Group official and politicians from Virginia and Oregon.

Macquarie, an Australian firm, makes up one half of the investment consortium investing in the privatization of the Indiana Toll Road. The other private partner in that group is Cintra Concessiones de Infraestructuras de Transporte, S.A., of Spain.

Opponents to the deal believe U.S. infrastructure should not be leased to foreign investment groups promising profits to their stakeholders.

By David Tanner, staff writer
david_tanner@landlinemag.com

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