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Review & Comment
Walsh: Build private expressway from Tampa to Naples
Here's a big task for the next governor: Bring together the appropriate players to create a private-sector financed, constructed and operated six-lane toll-expressway that connects east Hillsborough County to Alligator Alley - running north to south, with tributaries running east to west (see map, page 7).
This transportation corridor will be crucial to the future movement of traffic and the continued vibrancy of the economy along the entire southwest coast of Florida.
It doesn't take rocket science to see what's coming and what's needed. It's already here - the start of congestion that will only grow and cripple the coast. Interstate 75 is fast becoming the 5-pound potato sack with 10 pounds of potatoes. It doesn't work.
But this much is sure: If the business leaders on the Gulf Coast of Florida - from Tampa Bay to Naples - wait for their political leaders at the federal, state, county and local levels to act, we'll all be dead before anything of consequence happens.
To be sure, road shortages are always the big bugaboo in every community in Florida. And for the past quarter-century we've heard and read one political hack after another huff away at how we need more taxpayer-subsidized buses (that always run no riders), European-style mass-transit trains (that won't draw enough riders here) and more federal and state tax dollars (that are never available).
But none of those ideas works anyway. What's more, when in your lifetime have you seen government move fast enough to address anything before it becomes a crisis? Lord a-mercy, it took 10 years to get the politicians, turtle-huggers and NIMBYs to replace a rickety draw bridge and build a fixed bridge across Sarasota Bay to connect the mainland to St. Armands and Bird Keys. And in that time, the cost doubled from $30 million to $60 million.
To expect that this failed process will alleviate the congestion that has built up on expressways from Tampa to Naples is a wish upon the stars.
Dare it be suggested that a committee or task force be formed. But the newly sworn-in governor of Florida, in one of his first acts (after he de-regulates the property insurance market!!) should bring together key business leaders and a few state and county elected officials from 11 counties. The counties: Hillsborough, Polk, Manatee, Hardee, De Soto, Sarasota, Charlotte, Glades, Hendry, Lee and Collier - all of whose road systems and population centers would be affected.
The objective: build this new toll-driven expressway system in less than a decade - and build it, if possible, without one dime of public money or tax increases.
Don't laugh. It's possible. And it's being done in such places as Texas, Indiana, Virginia and California.
If you tap into the Reason Foundation (www.reason.org) and the works of Geoffrey Segal and Robert Poole Jr., two transportation and government reform experts, you can get a sense of the growing wave of privately financed and operated expressways that are spreading in the aforementioned states.
Virginia model
In May, for instance, Virginia Gov. Timothy M. Kaine signed a bill that permits the state to enter "concessionaire" agreements with private companies to build and operate the 9-mile Pocahontas Parkway.
Virginia signed a 99-year lease with Transurban, an Australian firm. Part of the agreement calls for Transurban to share its profits with the state. According to the Reason Foundation, Virginia will receive 40% of gross revenues from the parkway's tolls once net cash flow yields an internal rate of return of 6.5%. That number increases to 80% once the internal rate of return hits 8%.
"Thus, the deal could potentially add millions in revenue to state coffers over its 99-year life," Reason says. "Transurban also has agreed to build a $150-million spur to the Richmond International Airport if federal loans are approved. In addition, state loans and operating expenses will be repaid under the deal."
And the tolls? They'll be regulated and capped so they will reach no higher than $4 in six steps over the next 10 years. The Australian firm also has guaranteed that it will maintain the parkway at acceptable levels and take steps to prevent congestion before it reaches unacceptable levels.
Indiana model
Earlier this summer in Indiana, Gov. Mitch Daniels accepted a check for $3.85 billion from Australian-based Macquarie Infrastructure Group and Spain-based Cintra SA to lease, operate and maintain Indiana's only toll road. The two companies paid that amount in exchange for all toll and concession revenue from the 157-mile highway for 75 years.
Daniels proposed the privatization as a way to help pay for a 10-year, $10.6 billion statewide road construction plan.
Texas model
Meanwhile, Texas has created one of the more innovative aspects of this trend toward totally private expressways. Lawmakers devised a way to address right-of-way land acquisition by granting the state's transportation department the ability to offer landowners percentages of a tollway's revenues instead of the lump sums that typically are expected and often hold up the road-building process.
These are just a sampling of what other states are doing to address their road problems. Some of these steps are beginning to percolate here, too. Lee and Collier counties have formed their own expressway authority to build highways; Hillsborough has its authority.
But if we're smart, Gulf Coast business leaders will recognize that much about our futures - the cost of housing, food, services; tourism; the movement of goods and people, the quality of life - will be affected greatly by our network of roads. Private-sector expressways clearly are the roads to the future.
EXCERPTS: HOW OTHER STATES DO IT
The following passages are excerpts from articles pertaining to privately financed and operated expressways written by transportation experts Geoffrey Segal and Robert Poole Jr. of the California-based Reason Foundation:
+ Trillions in capital available
"In the last 12 months, global capital markets have discovered the U.S. highway market. Literally trillions of dollars from global funds could be invested in our highways. The Indiana deal is part of a larger trend beginning to sweep across the nation. So far, in just four states - Virginia is one of them i.e., Dulles Toll Road - more than $20 billion worth of proposals are pending approval..."
"Virginia Doesn't Need to Raise Taxes for Transportation,"
by Geoffrey Segal, Jan. 31
+ Tolls a Texas policy
"First, it is now declared policy in Texas to look first at tolling for all new limited-access highway projects. This is simply a recognition of reality. As explained on the TxDOT Web site, from 1990 to 2000 vehicle miles traveled in Texas grew by 41%, while lane miles increased a mere 3%. The result was congestion whose statewide cost is estimated at $45.6 billion over the decade. Since Texans don't want massive gas-tax increases, the only other way to pay for major highway improvements is with tolls. And voters approved constitutional amendments to enable these new toll-friendly policies last fall by a 61% majority."
"Land acquisition is often a big obstacle to new highway projects, so HB 3588 introduces two creative new approaches. First, the Texas Transportation Commission may purchase options for possible right of way for a project, before the final alignment has been determined. Second, TxDOT 'may offer the owner of the property [needed for right of way] a percentage of the [toll] revenue associated with a particular segment of a turnpike, rather than a single fixed payment for the property.' "
"At a recent transportation finance conference in New York City, investment bankers lauded Texas as a model for other states, and I concur in that judgment. Texas Turnpike Authority Division director Phil Russell gave a very impressive presentation. Any transportation commission in a fast-growing state would benefit mightily by flying him in to give this presentation to its members."
"Texas Sets the Pace
in Highway Finance"
by Robert W. Poole Jr., March 2004
+ Shift in highway financing
"There is little question that the way we finance transportation in this country is shifting. A new financing paradigm is rapidly emerging, and being embraced, around the country - an ever increasing role for the private sector and private capital. This represents a dramatic departure from traditional financing and thinking. The way it has always been done is no longer the model.
"Texas has embarked on a massive construction effort largely financed with private capital. An innovative lease concession in Indiana will fully finance the state's 10-year transportation plan. Both are achieved without new taxes.
"Privatization and tolls -
not more money - are the key
to fixing Virginia's broken
transportation system"
by Geoffrey Segal, Aug. 7
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