May 12, 2008

Toll hikes boost foreign company profits
Pennsylvania gets turnpike offers
Small transit deals part of company’s US growth
FL: $6 million for ‘phantom services’
NJ: State plan aids private schools
IN: Dem faces uphill fight against Daniels
NY: County-run nursing home falls to budget

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News Summaries
Toll hikes boost foreign company profits
Global toll road giant Cintra announced yesterday that its first
quarter revenue had jumped 15.3 percent thanks in part to toll hikes on
roads in the US, Canada, Chile, Ireland and Spain. Despite collecting
881 million Euros (US $1.4 billion) from drivers last year, the company
failed to make a profit. The company lost 16 million Euros (US $25
million) in the first quarter of this year. During this time, traffic
dipped 8.9 percent on the Chicago Skyway and 6.1 percent on the Indiana
Toll Road. In an earnings statement, Cintra blamed bad weather and the
"betterment" of free alternative routes such as the Dan Ryan Expressway
in Chicago for reducing profit. The weakening dollar also cut into the
Spanish company’s revenue from US motorists. The
Pennsylvania gets turnpike offers
At least two bidding groups submitted undisclosed cash offers late
Friday for the 75-year lease of the Pennsylvania Turnpike, in what
could represent one of the largest deals in the coveted U.S.
infrastructure sector. One of the bidding groups is led by Spanish
toll-road operator Abertis Infraestructuras SA and includes undisclosed
financial partners, a company official said Saturday. A person familiar
with the situation said another binding bid was filed by Spain’s Cintra
Concesiones de Infraestructura de Transporte SA in partnership with
Australia’s Macquarie Infrastructure Group. The units of Grupo
Ferrovial SA and Macquarie Group already have a significant presence in
North America, as they jointly operate toll roads in Indiana, Illinois
and Ontario. The Wall Street Journal (subscription)
Small transit deals part of company’s US growth
Paris-based Veolia’s rapid growth means a large and still-growing part
of America’s urban transit infrastructure is either owned or operated
by a foreign-owned company. So how did they do it without anyone
noticing? By sticking to smaller acquisitions and short-term contracts
— big sexy deals, after all, stir up big sexy controversies. When
Indiana’s turnpike and the Chicago Skyway were turned over to foreign
investors, Australia’s Macquarie Bank Ltd. and Spain’s Cintra
Concesiones, protests came flying — not just over the nationalities of
the investors and the notion that we should have to pay foreign banks
for the privilege of driving over American highways, but also over the
duration of the deals (99 years in the case of the Skyway, 75 years in
Indiana). All the while, Veolia was building a roster of clients and
acquisitions — more than 120 North American locations, moving 500 million
North American transit passengers every year. Pittsburgh Post-Gazette
FL: $6 million for ‘phantom services’
An audit claims Wackenhut Corp. billed Miami-Dade Transit about $6.02
million over three years for work its security officers did not do.
Wackenhut has 90 days to respond to the findings. If it does not,
Auditor Cathy Jackson suggests the county end all contracts with the
company and procure replacement security by hiring new firms, directly
hiring qualified officers or using county correctional staff. The audit
was prompted by a whistleblower lawsuit filed in 2005 that accuses
Wackenhut of billing Miami-Dade for "phantom services" through the
transit system and juvenile center contract to the tune of $3.5 million
to $4.5 million a year, beginning in 2001. South Florida Business Journal
NJ: State plan aids private schools
Depending on which side of the debate you’re on, the Urban Enterprise
Zone Jobs Scholarship Act is either a fabulous idea to help children,
or an evil plot to privatize schools. The bill would allow businesses
to get a 100 percent tax credit for funds they donate to designated
private school scholarship funds. Education groups say the state will
still lose tax revenue, and ultimately those funds would come out of
state aid to schools. New Jersey Education Association president Joyce
Powell was especially piqued that 25 percent of the funds would go to
students already attending private and parochial schools. "Letting
private school students walk away with 90 million of our tax dollars is
bad policy, pure and simple," she said. Press of Atlantic City
IN: Dem faces uphill fight against Daniels
Jill Long Thompson says she knows it will be tough to unseat Republican
Gov. Mitch Daniels in November, and she’s already come out swinging.
Daniels could be vulnerable due to the sluggish economy and some
controversial proposals he’s pushed through, such as statewide daylight
saving time and leasing the Indiana Toll Road to a foreign consortium.
Indianapolis Business Journal

NY: County-run nursing home falls to budget
For Steve Levy, the Suffolk County executive, ridding the county of the
nursing home it owns and which is losing $12 million annually is a
no-brainer: the county is facing a projected budget shortfall next year
of $120 million to $150 million. ”It makes no sense to keep it if the
same type of service can be maintained by private nursing homes at no
cost to the taxpayers,” he said, adding that Suffolk could receive up to
$20 million in financial incentives in the form of state grants if it closed
the 264-bed John J. Foley Skilled Nursing Facility here. But opposition to the
proposal has surfaced among many residents of the nursing home, the union
representing its 400 employees and some members of the Suffolk Legislature.
“It takes the difficult patients,” he said, pointing out that Foley takes not only
elderly patients but also those who have AIDS or who need rehabilitation from
serious injuries. Several county-owned nursing homes have been closed or sold
elsewhere in the state in recent years, including homes in Dutchess, Erie, Montgomery
and Niagara Counties. The New York Times