June 20, 2014


TX: High-speed toll road near Austin risks default
The private company that operates a 41-mile toll road from Seguin to south of Austin is trying to restructure its debt to avoid a potential default by the end of the month, according to a report released Thursday confirming traffic remains far below expectations. . . .Under a first-of-its-kind deal with the state, the company spent $1.4 billion on the road, assumed all the financial risk and collects most of the toll revenue, but the Texas Department of Transportation is the owner and gets a cut. . . . SH 130 Concession Co. is owned by Cintra, a Spanish company, and San Antonio’s Zachry American Infrastructure. The report said the road’s future performance “will likely heavily rely on toll rate increases, coupled with economic expansion and increased congestion on (Interstate) 35, to drive revenue growth.” In October, Moody’s slashed the company’s credit rating to junk status.  Houston Chronicle

IN: Indiana Toll Road operator facing debt woes
A state agency says it is monitoring the Indiana Toll Road operator’s finances as it works to make an upcoming debt payment on the financing of its $3.8 billion lease payment to the state eight years ago. The Indiana Toll Road Oversight Board has asked the Spanish-Australian investor group Cintra-Macquarie about the status of the payment it owes this month after state officials made similar inquiries after news reports that it was struggling last year to make an interest payment, board Director James McGoff told The Times of Munster. . . .Cintra-Macquarie made the upfront payment of $3.8 billion to the state in 2006 for a 75-year lease of the highway that crosses Indiana’s northern counties, but its toll revenue since then hasn’t met expectations .In addition to the upfront payment, Cintra-Macquarie agreed to spend $4.5 billion on toll-road maintenance and improvements over the life of the lease.  Indianapolis Business Journal

IN: Opponents hope bat, mussel stop Illiana Tollway
A bat and a mussel could jeopardize construction of the Illiana Tollway, something that hundreds of local residents opposed to the project have been unable to do. The U.S. Fish and Wildlife Service has raised concerns about how the proposed 47-mile highway would affect the endangered sheepnose mussel and the threatened long-eared bat. . . . Patricia Mussman, wife of West Creek Township Trustee Harold Mussman, said that’s what they and those opposed to the Illiana Tollway have been saying all along. Those against the tollway have been pinning their hopes on environmental lawsuits to derail the project after resident and local politician opposition failed to halt it. “It’s been red-flagged. I’m thrilled. I’m absolutely thrilled,” Patricia Mussman said. “There are so many reasons why this is not a good idea.” She said the tollway will cut through several Indiana wetlands, and opponents are concerned about the long-term effects it would have on those areas as well as what they believe is the understated cost to build the tollway. Post-Tribune

PA: Jail privatization mulled
Mercer County stands to save millions of dollars if it hires a private company to run the county jail, and that decision could be made by the end of the year, county Commissioner John Lechner said. . . .Lechner said a private company could take over the canteen fund, commissary, food service, medical services, counseling, and labor to manage and operate the jail. Jail Warden Erna Craig opposes the idea. “Probably the only advantage to the county taking privatized companies in here would undoubtedly save money, but I personally do not think it’s a good move,” Craig said. “I’m afraid they’d have a tough time keeping that same method of operations going.”  Sharonherald

NC: Opinion – Final Commerce privatization bill still a bad deal for taxpayers
The unfortunate quest to privatize the state’s business recruitment and job creation efforts took a big step forward yesterday, when the Senate agreed to a House proposal creating a new nonprofit partnership to oversee much of the state’s economic development efforts. This misguided proposal is a bad deal for North Carolina taxpayers, businesses, and workers—schemes for privatizing economic development have repeatedly proven to be ineffective at job creation, wasteful of taxpayer dollars, and prone to financial mismanagement, conflicts of interest and pay-to-play incentive granting, and the inability to raise private funds in many of the states where they’ve been tried. The Progressive Pulse