Recently in Transportation Category

Source: By LAURA MECKLER, Wall Street Journal, April 18, 2006

With federal, state and local governments facing budget squeezes, an increasing number of policy makers throughout the country are looking to privatize highways, encouraged by Wall Street companies seeking lucrative fees in the deals. The first big move came slightly more than a year ago, when a private partnership paid $1.83 billion for the right to operate the 7.8-mile Chicago Skyway for 99 years. Since then, Indiana has leased its 157-mile turnpike for 75 years for $3.8 billion. Other states, including New York, New Jersey and Delaware, have considered privatizing toll roads but haven't done so. …. Some analysts say the shift toward private ownership of what largely has been a public infrastructure has huge risks for the quality of the nation's roads. An analysis published last month by Fitch Ratings, a credit-ratings company, concluded that "toll roads are good candidates for privatization," but cautioned that adding a profit motive to the operation of roads could lead to tolls that are so high that drivers migrate to free highways, increasing pressure on those roads. It added that use of profits to fill a budget gap or other operational needs could lead to deficits down the line. "Ultimately, this is a one-time resource," it concludes.

Source: By TOM HOLDEN, The Virginian-Pilot, © April 8, 2006

Gov. Timothy M. Kaine said on Friday he will support legislation that would expand the Virginia Department of Transportation's efforts to privatize the maintenance of the state's highways. The measure allows the Commonwealth Transportation Board to award contracts to companies for tree trimming, ditch clearing, guardrail repair and other duties. VDOT's Hampton Roads District already has a contract with Infrastructure Corporation of America , of Nashville, for maintenance along Interstate 64 from Hampton to I nterstate 295.

Source: By Bill Ruthhart, Indianapolis Star (IN), April 13, 2006

As the ink was drying on a $3.8 billion agreement to lease the Indiana Toll Road, two lawsuits were filed Wednesday to block the deal. State Budget Director Charles Schalliol signed the 75-year lease agreement with Macquarie-Cintra, an Australian-Spanish consortium, at 9 a.m. Less than two hours later, lawsuits were filed in St. Joseph and Brown counties. A group of seven citizens and the Indianapolis-based Citizens Action Coalition of Indiana filed the St. Joseph County lawsuit, arguing that Gov. Mitch Daniels' effort to lease the Toll Road to a private firm was unconstitutional.

Source: By Tom Barnes, Pittsburgh Post-Gazette (PA), Monday, April 10, 2006

Gov. Ed Rendell yesterday suspended a 2-week-old state policy requiring prevailing union wages for municipal and state road repair projects. The new policy, instituted by the state Department of Labor and Industry, caused a storm of protest from local elected officials and Republican legislators, complaints that Mr. Rendell heard firsthand during the annual convention of the Allegheny County League of Municipalities on Saturday at Seven Springs Mountain Resort in Somerset County.

Source: BY LIZ COBBS, Ann Arbor News (MI), Tuesday, April 11, 2006

Privatizing bus service in the Lincoln Consolidated Schools will not result in economic savings for the district, a labor relations expert said Monday. Roland Zullo, a research scientist at the University of Michigan's Institute of Labor and Industrial Relations, told Lincoln school board members and a packed audience at Monday's board meeting that he has studied privatization for 12 years, in such service areas as school busing, trash pickup and urban transit.

Source:By Travis Fain, Macon TELEGRAPH (GA), March 28, 2006

The private company managing Macon's airports under a temporary contract would take over long-term if the city pays the cost of running the airports plus a $15,000 monthly management fee, according to its proposal to privatize the city's aviation department. TBI Airport Management's proposal was the only one turned in by a Friday deadline set by the city. Whether Macon will accept TBI's offer and privatize the city's two airports or keep an aviation department under more direct city control remains to be seen.

Source: By Lynn Moore, Muskegon CHRONICLE (MI), Saturday, February 25, 2006

School bus drivers in six local districts could end up working for a private company next year under a plan to save money that the school districts are considering. The Muskegon Area Intermediate School District is seeking bids from private companies interested in employing 145 bus drivers in the six districts, beginning July 1. School officials think privatization of "employment management services" could save districts tens of thousands of dollars spent on retirement and health benefits for the drivers.

Source: By Frank Flynn, Daily Advertiser (LA), Feb 22, 2006

When transporting our children to and from school, the Lafayette Democratic Party believes the first priority of the school board must be the safety of our children. For the safety of our children, we believe in professionalism, not privatization......... Across the country, privatization has resulted in greater risk to schoolchildren who are forced to ride in buses driven by unprofessional, low-paid drivers. The profits of privatization are taken from the community and sent to out-of-state companies. A study commissioned by the U.S. Secretary of Labor's Task Force on Excellence in State and Local Government concluded that privatization does not necessarily result in lower costs and often the quality of service deteriorates when profit becomes the primary motivation. Contractors often provide inferior wages and benefits, which attract less qualified drivers. Paying inferior wages and benefits and hiring less qualified drivers increases the profit of the contractor, takes money out of the community, and places at risk the safety our children. Without adequate pay and benefits, private contractors experience a high turnover rate of drivers. This creates problems when new drivers are unfamiliar with school bus routes. Privatization also diminishes public accountability because the school board members cannot directly address parents' and students' complaints.

Source: By Eric Kelderman, Stateline.org, Friday, February 17, 2006

After three years of stagnant transportation spending, states are embarking on a road-building binge but still struggling with how to pay for new pavement. One answer increasingly is pay-as-you-go for motorists. .....
To fill the gap, states more than ever are turning to toll roads, and in the latest twist, considering leasing those roadways to private companies in exchange for cash up-front to build more infrastructure. The latest example is Indiana, where lawmakers are debating a proposal from Gov. Mitch Daniels (R) to lease the 157-mile Indiana Toll Road to a consortium of foreign companies for $3.85 billion. Chicago, Texas and Virginia already have privately run toll ways. While governors from California to Virginia also are proposing more conventional ways to boost funding for roadwork – such as bonds and increased registration and license fees -- transportation experts see privatization as a future source of highway funding.

Source: Kansas State Collegian, Thursday, February 2, 2006

According to an article in the Topeka Capital-Journal, the Kansas Turnpike Authority is considering the privatization of its turnpike. KTA could receive up to $3.1 billion if it leased the turnpike to private operators. The banking firms Citigroup and Goldman Sachs both have submitted proposals to KTA for privatization, which would increase tolls for drivers.