Tuesday, July 04, 2006

"Governments should not be in the business of enriching private companies at the expense of those they serve."

Private doesn't serve public

7/4/2006

By John H. White, Chicago Sun-Times via AP

By B. Patrick Bauer
USA Today
Copyright 2006

Indiana's experience with privatization has focused almost entirely on rumored benefits, without any consideration of the pitfalls.

We are told the sale of the Indiana Toll Road to foreign investors will help us address infrastructure improvements over the next decade. For a one-time infusion of cash, we will be giving up possession of a state asset for 75 years. Any money generated from the operation of this road will be sent overseas until 2081 (more than $100 billion), long after we have used up sale proceeds ($3 to $4 billion). The foreign consortium has told investors that it expects to operate the road at a 13% profit.

Many of us felt a better idea would be to use toll road profits to pay for our infrastructure needs, a move which would generate as much money as a sale and enable us to keep possession of the road. Our concerns were ignored. Advocates now are contemplating turning an interstate extension in southern Indiana into a privately owned toll road.

Additionally, control over most of our state's family and social services network is likely to fall into the hands of private firms that have been roundly criticized and investigated elsewhere for failure to live up to promised service. States have reassumed control of these services.

There is concern about the role privatization plays in operating programs that benefit a state's general population. A private company's primary motivation is to earn a profit. If profits are not being earned, a company reduces costs by cutting personnel and services.

More states are rejecting the concept of privatization. In Texas, one county already has chosen not to turn a road over to a private company, preferring to operate the road itself and keep the profits.

All of us want to see government operate in a fiscally sound, accountable manner. If the results are that people are not going to get the services they need, that is not good. Governments should not be in the business of enriching private companies at the expense of those they serve.

B. Patrick Bauer is Democratic leader of the Indiana House of Representatives.

GOING PRIVATE
Other sample private road projects:

Chicago Skyway. Chicago, one of the few cities that owns a toll road, has agreed to lease this 7.8-mile highway, running from downtown to the Indiana border, for $1.8 billion.

Trans-Texas Corridor. A Spanish company has proposed building a $7.2 billion privately run toll road from San Antonio to the Oklahoma border. This would be the first phase in a Texas-size plan of Gov. Rick Perry to pump $180 billion of public and private money into upgrading the state's roads and rails.

Tappan Zee Bridge . New York Gov. George Pataki has proposed a private lease to finance repairing or replacing this bridge, which spans the Hudson River above New York City.

New Jersey Turnpike. The Legislature is considering selling a 49% interest in this north-south corridor.

Garden State Parkway. Also in New Jersey, same terms as the Turnpike's are being considered.

Source: USA TODAY

© 2006 USA TODAY, a division of Gannett Co. Inc.: www.usatoday.com

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