Several weeks ago, some new express lanes were added to the Washington D.C. beltway – not normally a point of interest or concern here in our little burg-in-the-Oregon-woods. Your neighborhood either, I’d guess. But, you might pay more attention if you knew who paid for those improvements and who owns them – private construction companies Flour and Transurban.
“And just why did those two private outfits put up the millions to add to our national transportation system?” you ask. “To make a profit,” sez I. “To own them,” sez I. And that worries me. A lot.
The new D.C. traffic lanes are for carpool use. But, if you’re alone, want to get out of the other four lanes and into the much lighter traffic, go ahead. After you pay the fee. For a few bucks more, you can just whiz to work alone with the carpoolers. And your money goes where? Why, Flour and Transurban, of course. After all, it’s their road now. Or, at least part of it.
One of the tenets of conservatism I’ve long agreed with is government should do the things government does best – private enterprise should do what private enterprise does well. Good balance. Philosophically and often fiscally. But the key is “balance.” And that’s too often hard to achieve.
We look to government for a sound military and conducting our national defense. But, over the last decade or so, we’ve turned over more of the responsibility for our military operations to private business. Housing, food service, construction and a lot of other formerly military-only tasks are now done in many places by civilian contractors.
You might be O.K. with that. But how about the same civilian contracting for security and fighting a war? How about the thousands of mercenaries we hire? Civilians. Is that just the same concept? Firing the bullets instead of cooking food or building a base? Killing on behalf of our government so the military can do something else?
As I said, balance.
In a more mundane way, this privately-owned highway business raises a lot of questions about who should be doing what. Historically, some level of government has always built all our highways. We have city, county, state and federal systems. We build ‘em and we maintain ‘em. We own ‘em.
But, as our various governments are pushed harder against the financial wall, they’re looking for help. Really big construction and engineering companies like Bechtel and Samsung are talking with the big – really big – banks. Merrill Lynch and Goldman Sachs are two – with billions in pension funds and all those insurance dollars just lying around. The idea is they put up large amounts of up-front funding, getting paid back – plus a lot of interest – by owning them and charging us for using them.
But if you and I don’t own the highways – and if those highways need fixing down the road so to speak – what recourse is there to see that private enterprise does its job? What if one of the big corporations – after making a few billion dollars – takes the money and goes out of business? Who does the necessary rebuilding? And who pays?
And just to add a little frosting on this conundrum, they’re talking using this private enterprise deal to build – and rebuild – bridges on our highway system. God knows, they need it. For instance, Bechtel builds a bridge here and a bridge there and a bridge somewhere else, then charges tolls which the company keeps. So, let’s say private companies like Bechtel build – or rebuild – and own 15 bridges from Seattle to Los Angeles. That’s potentially 15 toll collections along Interstate 5 going one way and 15 more going the other. On a route we now drive for free. Free, that is, after we put up the billions in tax dollars to build the whole thing in the first place.
Industry newsletter Public Works Financing (PWF) has identified a dozen projects hat were proposed in 2012 with a value of about $20 billion. Since 2008, 10 others were completed or are still underway. One is a tunnel linking the Port of Miami to an interstate. There are several toll highway expansions in the East. And, in Long Beach, Calif, one company built a new courthouse. And owns it. Charges the taxpayers rent.
PWF has estimated there are now over 100 private funds in place to do more of this kind of thing. But – so far – there’s more money available than there are projects. One reason – whether a courthouse or a road or a bridge – the project has to be high-use and in large populations areas so tolls or rents can exceed construction and operating costs. But, if more governments contract out this sort of stuff, someone will figure out a way to use it for more things – in more places. Even in our little burg-in-the-Oregon-woods.
As I said, “balance.” But there are so many things out-of-balance in our system of government right now -and society in general – that new ventures like these trouble me. While “necessity” may be “the mother of invention,” I’d hate to see our governments at any level jump into this private ownership of highway, bridge, public buildings idea while under today’s extreme financial pressures. Let’s regain our national balance and take some time to examine all the ramifications of these types of ventures.
Somehow, I just don’t think it’ll be comforting to drive across an interstate bridge built -and owned – by the folks who make Big Mac’s.