- The Washington Times - Friday, September 28, 2007

Shipping services for Americans overseas is reaching all the way to U.S. highways.

Across the nation, foreign management of toll roads and other infrastructure is raising money for projects that otherwise would not be built.

In Virginia, Australian companies would operate four toll roads in the state when construction is completed on tollways planned for the Washington area.

The foreign companies compete for public-private partnership contracts that state governments increasingly give out to avoid draining their tax revenue on highways.

“In real dollars, there’s a lot less dollars available for publicly funded infrastructure than there used to be,” said Michael Kulper, vice president of the transportation consortium Fluor-Transurban Inc. and an Australian citizen. “More and more of the state budgets are being consumed by maintenance.”

Fluor-Transurban is finishing a deal with Virginia that would build 70 miles of “HOT lanes” along the Capital Beltway’s normal traffic lanes and south to Fredericksburg.

For motorists, the HOT — high-occupancy toll — lanes mean they would pay between 10 cents and $1 a mile to bypass Beltway traffic. The rates would vary throughout the day, depending on the density of traffic on the Beltway. Buses and high-occupancy vehicles could use the toll road for free.

Transurban Group is the Australian consortium that would collect the tolls and maintain the roads. Fluor Corp. is an Irving, Texas, engineering and construction company that would build the HOT lanes.

Last year alone, foreign companies gained operating control over an Indiana toll road and Virginia’s Pocohantas Parkway and won an agreement to build and operate a Texas toll road for 50 years.

They are in the running for contracts to operate more toll roads in Delaware, New Jersey, Texas and New York.

Foreign management does not represent a failure by American business, only a lack of experience compared with foreign companies, said Jack Basso, business development director for American Association of State Highway and Transportation Officials, an advocacy group for state transportation departments.

“That’s been a relatively new phenomenon in the United States,” said Mr. Basso. “It really showed up in the last five or six years. We have a tradition of public ownership of roadways.”

However, many state and federal lawmakers are looking more favorably on public-private partnerships, he said.

As a result, major U.S. investment banks are putting together infrastructure funds that are likely to result in American companies managing toll roads soon, he said.

Lawmakers’ concerns about decaying infrastructure took on greater urgency after Aug. 3, when a highway bridge collapse in Minneapolis killed 13 motorists.

Rep. John L. Mica, Florida Republican and chairman of the House Transportation and Infrastructure Committee, was immediately summoned to the White House to brief President Bush on shortcomings of America’s highway infrastructure.

“I believe that public-private partnerships and, specifically, private-sector financing will play a key role in solving our impending transportation funding crisis,” Mr. Mica said during a May 24 congressional hearing.

While some Americans complain about foreign control of key infrastructure, others say the money the companies pay and service they provide is worth sacrificing a little pride.

“We focus on adding capacity to the system,” said Pierce R. Homer, Virginia secretary of transportation.

The Spain-Australia partnership Cintra-Macquarie paid $3.8 billion to lease the 157-mile Indiana Toll Road for 75 years. Transurban paid $611 million for the 99-year lease on the 8.8-mile Pocohantas Parkway between Richmond and Richmond International Airport. Cintra agreed to pay the Texas Department of Transportation $2.1 billion to develop State Highway 21 into a toll road with a 50-year lease.

Australia’s Macquarie Infrastructure Group and Italy’s Autostrade International are the largest owners and operators of the 14-mile Dulles Greenway toll road in Virginia.

The Indiana Toll Road lease, the biggest in American history, had to overcome opposition from state Democrats who objected to foreign control of such an important piece of infrastructure.

Even with the influx of foreign capital, Texas transportation officials say highway infrastructure in the Houston area needs as much as $20 billion of upgrades and maintenance that are not available from tax allocations alone.

Maryland is one of the states that has decided against leasing or selling infrastructure.

“You have to weigh the one-time infusion of capital funds you may receive versus what the long-term financial impact will be,” said Jack Cahalan, Maryland Department of Transportation spokesman.

States can receive big lease payments initially but lose out on opportunities to collect larger sums from tolls over the term of a lease, he said.

“To date, there’s been no compelling reason to move in that direction,” Mr. Cahalan said.

Maryland’s toll facilities consist of two tunnels in the Baltimore area and five bridges. The District has no toll facilities.

The Virginia HOT lanes would be built in two projects. The first segment would be four lanes running 14 miles between the Springfield interchange to just north of the Dulles Toll Road.

Construction is tentatively scheduled to begin in the spring. The five-year project would cost about $1.7 billion, with $1.3 billion paid by Fluor-Transurban.

The Fluor-Transurban consortium then would get a 75-year lease to collect tolls on the route.

The second phase would run for 56 miles between the Pentagon and Fredericksburg at a cost of more than $1 billion, most of it paid by Fluor-Transurban.

Foreign ownership of companies that win the infrastructure contracts is not the issue when the state of Virginia hires a firm, said Jeff Caldwell, Virginia Department of Transportation spokesman.

“We do blind solicitations that say we’re looking for this type of project and we’re requesting proposals from private firms,” Mr. Caldwell said. “We don’t specify which firms or exactly how those bids come in.”

Without the private investment, VDOT “wouldn’t have the funding,” Mr. Caldwell said.

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