02.11.08
Toll Roads Are Not Paved In Gold
It’s always funny to see how grudgingly the traditional media is when it comes to admitting the economic disaster of toll roads once it becomes apparent. Case in point the headline of AAS transportation reporter Ben Wear’s article today on the likelihood of under-performaning local toll roads, Tollways may or may not be money machine. May not?! After reading that article if there’s anyone who still thinks there’s even a slight a chance of our local tollways becoming “money machines” they should check themselves into rehab. He even says in the article how bad the numbers are, so how is it that they “may become a money machine”? Here’s the best Ben could come up with in the article:
According to that statement, the three roads will make $8.7 billion in toll revenue through 2042. In that same time, there will be $7.2 billion in debt payments for that borrowed $2.2 billion, $1.1 billion in operations costs, $752 million in routine maintenance and $388 million for long-term maintenance. The net of all that? Almost $750 million in the hole over 35 years.
More like an economic jalopy.
Not that I’m one to give pointers, but the headline should have had the word jalopy, not machine in it.
That the toll roads won’t fulfill their economic promise is no surprise. It was pretty easy to see that coming. The Denver Post series foretold this. Generally speaking the plan of consulting firms is to get the state or local governmental entity to build a toll road, then consult on the building of the road, etc.. They will produce whatever traffic and revenue estimate they deem necessary to convince that entity that the road will be profitable, therefore insuring it will be built. As Sal points out in his analysis of the article:
Part of the toll road scam is producing traffic and revenue projections that promise much more than can be delivered. Standard and Poor’s bond analysts, after reviewing forecasting case studies for years, have concluded
“Optimism bias remains a consistent feature of toll road traffic forecasting.
Essentially promising all the roads an elected official would want without ever having to raise “taxes”. Tolls on the other hand will be raised many, many times. Has EOW ever said that the gas tax is a cheaper way to pay for roads?
HeavyDuty said,
February 13, 2008 at 1:31 pm
In the last, Texas, state legislative session the Trans Texas Corridor (TTC) was put on hold, but no other method was made available for funding new road construction, or operating and maintaining existing infrastructure. So, the Perry appointees at TxDOT HQ whine that there’s no money for them to do their job; a corner they willfully backed into.
There has been an experiment in a private toll road in south Texas, the Camino-Columbia toll road, where drivers proved that they would much rather wait in snarled traffic than pay profitable toll rates. So, the lesson that Perry’s minions at TxDOT HQ learned was that you take negotiations for privately owned toll roads behind closed doors and give away the farm.
TX is now the second most populous state in the nation and is burdened with a burgeoning flow of NAFTA related traffic. This has put a tremendous, and increasing, burden on the ground transportation infrastructure of our state in the last decade, while inflation has upped the cost of building, operating and maintaining said facilities. Yet our fuel taxes have stagnated for well more than 10 years. Our state legislature wants us to believe that the only adequate solution is to turn our road and train routes over to private, campaign contributing, companies.
We’ve had one proof of the concept that common carriage transportation is not going to be sufficiently profitable for private companies, but if more proof is needed it should be on a project much smaller than the TTC. In the meantime let’s take care of the current needs by raising the state and federal fuel taxes, as the federal government’s commission has wisely suggested.