August 27, 2008
Cities Debate Privatizing Public Infrastructure
By JENNY ANDERSON

Cleaning up road kill and maintaining runways may not sound like cutting-edge investments. But banks and funds with big money seem to think so.

Reeling from more exotic investments that imploded during the credit crisis, Kohlberg Kravis Roberts, the Carlyle Group, Goldman Sachs, Morgan Stanley and Credit Suisse are among the investors who have amassed an estimated $250 billion war chest — much of it raised in the last two years — to finance a tidal wave of infrastructure projects in the United States and overseas.

Their strategy is gaining steam in the United States as federal, state and local governments previously wary of private funds struggle under mounting deficits that have curbed their ability to improve crumbling roads, bridges and even airports with taxpayer money.

With politicians like Gov. Arnold Schwarzenegger of California warning of a national infrastructure crisis, public resistance to private financing may start to ease.

“Budget gaps are starting to increase the viability of public-private partnerships,” said Norman Y. Mineta, a former secretary of transportation who was recently hired by Credit Suisse as a senior adviser to such deals.

This fall, Midway Airport of Chicago could become the first to pass into the hands of private investors. Just outside the nation’s capital, a $1.9 billion public-private partnership will finance new high-occupancy toll lanes around Washington. This week, Florida gave the green light to six groups that included JPMorgan, Lehman Brothers and the Carlyle Group to bid for a 50- to 75 -year lease on Alligator Alley, a toll road known for sightings of sleeping alligators that stretches 78 miles down I-75 in South Florida.

continued...

Watch out...this is when they come in a buy it all up!

We will need those jobs in the future and we will need this infrastructure independent of profit margins. We need the infrastructure undetered by bankruptcies and corporate policiess.

They will want the prison population as their work force, you can smell it.

Screw the Federal Reserve squeezing every drop out of US. While they bail out their friends/partners in crime. Partners in WAR/MURDER. Partners in drug and human trafficking. Partners in spying on Americans(Partners in Insider Trading). Partners in disaster making, policy restructuring and no bid contracts.

I recall this debate bein on Randis former message board and it was started when news that Pennsylvania was going to privatize a Toll Road ..........to a Spanish group...........

The financial stakes are potentially huge. "You're buying the infrastructure of the economy, and it's enormously valuable," says John Schmidt, who served as associate attorney general in the Clinton administration and as counsel to the city of Chicago on the $1.8 billion privatization of the Chicago Skyway, the 7.8-mile freeway that connects the Dan Ryan Expressway in the west to the Indiana Toll Road in the east. "[Private road operators] haven't been able to get in here previously. There's been a demand, and it's been bottled up because we just haven't had privatized infrastructure in this country, so they've been buying toll roads in Chile and in France. Now, they suddenly have the opportunity to come into this country."


http://www.motherjones.com/news/feature/20...highwaymen.html

This has already happened in Virginia and still is happening as we speak alot of tollroads are totally privately owned.

The missing concept in all this privatization is the answer to the question "what should be in the commons under the heading "critical infrastructure"?". Some things are necessary for survival - clean air, clean water, basic nourishment, basic health care, basic transportation to.from work, basic communications. It's logically possible for for-profit enterprise to provide well for that "critical infrastructure," but in practice it doesn't work out. Enterprise serving survival needs have a captive market, especially when regulation starts to disappear. When that happens a small number of firms begin to get a monopoly on items needed for survival. Bad, bad, bad. Furthermore, ownership of those enterprises can decide to exit the business anytime, or shift priority to profit over well-being of consumers anytime. Even worse, that enterprise can be sold to foreign ownership, putting security at risk.

Critical infrastructure must be in the commons, and managed for the greater good, by government of, by and for the people. For-profit enterprise is fine for the optional add-ons.

So, are the tollroads succeeding? or are the tolls going up in rates without showing any decent repair work?

My best guess is that they get paid to take care of it, close it off, blow up parts of it, and demand more money to fix it or they will abandon it.

The gullible right wingers, such as the Boortz audience, don't seem to realize that citizens will have to pay more for access to infrastructure when it's privitized. But then, nobody has told them that they will have to also help pay the added cost of corporate profits and corporate executive pay. They think roads and bridges will be cheaper. I almost look forward to seeing their response when they have to pay a $6 toll to get on the road that will take them to their grocery store.

Our situation is much the same as the rest of the nation. We are within 2 miles of a Federally funded highway, built with Federal funds, that needs upgrading as Austin is growing East now (after years of growth NorthWest) - however, the city is making arrangements to sell the upgrade to a private for-profit company that will make a once free-access highway into a for-profit tollroad. Further, about 3 years ago there was a bond election that approved the sale of municipal bonds for the purpose of upgrading this highway (US 290 & Hwy 183 for those of you familiar with the area). Inquiring minds would like to know just what the Hell happened to the funds raised with the sale of those bonds, funds earmarked for the upgrades and improvement of these roads.

Most of the folks that live out this way are the endangered middle class and poor folks that are working below minimum wage, two and three jobs to feed themselves and their kids. Making their main access to work a toll road is not in the best interest of anyone except those who profit off the blood, sweat and tears of the working class.

Those who neglect the strength and integrity of the infrastructure do so at their peril - anarchy has risen over much, much less.


Kyoti