March 25, 2013

Maine Voices: Highway privatization law compromises public oversight of Maine roads

Operators of roads like the east-west highway can get public financing without government say over tolls.

By LINDSAY NEWLAND BOWKER

STONINGTON - In 2010, with little public notice or opportunity for public comment, Maine enacted a highway privatization statute written by and for Maine's asphalt lobby: Cianbro Corp., Maria Fuentes of the Maine Better Transportation Association and John Melrose, former Department of Transportation commissioner.

The law applies to any transportation infrastructure anywhere in Maine (not just highways) and allows private control for up to 50 years; public guarantees of private debt; up to 50 percent public financing; expedited approvals; use of public roads and air rights over public roads, and, of course, eminent domain.

There are three bills active in the Legislature to "fix" various elements of our hurriedly written, poorly vetted privatization statute, but the action that is appropriate is outright repeal.

Such a sweeping transportation policy should never have been passed without a thorough statewide review and chance for questions and input. Mainers never had the opportunity to understand what privatization entails, how it is used or what the downsides are.

We need to start from scratch deciding whether and how we want these so-called "public-private partnerships" used here in Maine.

Although public-private partnerships may not be familiar to many here in Maine, 16 other states now have public-private partnership statutes.

The privatization of highways or other transportation infrastructure allows the public entity with oversight of the highway -- in other states, usually a turnpike authority -- to auction off the right to build and operate the infrastructure for 50 to 99 years.

The private entity that bids the highest price for the use of existing public roads and air rights over the term of the agreement pays the public entity an up-front lump sum. The private operator retires the privately secured, publicly insured debt, meets operating expenses and realizes profits via tolls over which the public has no control or oversight.

The lower costs of maintenance and construction are achieved not just through "greater efficiency" but also through lower wage levels; the use of foreign workers, and other practices that would not be allowed under public oversight, including the ability to raise tolls as needed to keep profits at the agreed level.

U.S. experiments with private toll roads include the Indiana Turnpike, the Chicago Sky Way and two Virginia toll highways built under privatization. Most now deeply regret the choice of public-private partnerships.

Then-Chicago Mayor Richard M. Daley's 2005 privatization of the Skyway via a 99-year lease to an international consortium netted an up-front payment of $1.8 billion. The project was an essential one to the city, but the tolls have become so high that most users can't afford them.

Maine's privatization statute, according to Maine Turnpike Authority officials, could not be used to privatize any part of the turnpike, as the turnpike has its own separate charter and statute. But it does apply to any transportation infrastructure in Maine with a capital value in excess of $25 million.

It allows both projects planned by MDOT as well as unsolicited proposals, such as the privately owned and operated east-west toll road advanced by Peter Vigue, CEO of Cianbro, whose company co-authored our deeply flawed privatization statute.

The east-west highway is a perfect illustration of what is wrong with Maine's highway privatization statute, in addition to the fact that it was enacted with little public notice or chance for public comment.

The law allows a transportation project that was developed completely outside the statutory requirements of Maine's exemplary and visionary Sensible Transportation Policy Act to attain all the benefits of a public transportation project.

The transportation project also escapes the public debate that would attend seeking a statutory charter, as was done by the Maine Turnpike Authority and for all the "privately owned and operated" railways and toll roads of the 19th century.

The east-west highway is not now an active project under the highway privatization statute, but MDOT officials have confirmed in writing that the statute could be used for Vigue's "totally privately owned and operated" east-west toll road. In fact, the statute was written specifically for this project.

Here is the vision that John Melrose, a co-author of the statute, laid out before the Transportation Committee in support of the bill in 2010:

"Suppose Maine was willing to establish a limited network of privately held roads consisting partly or entirely of existing state highways where Canadian weights and truck configurations were permitted, and suppose these corridors were linked to our major international border crossings ..."

That vision alone is reason to immediately repeal Maine's deeply flawed, lobbyist-written highway privatization statute.

Lindsay Newland Bowker is a resident of Stonington.

 

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