"This particular partnership is so one-sided it is an embarrassment to citizens as well as the users of the toll road."
Is an Australian Bank Fleecing Greenway Drivers?
December 19, 2007
By Nicholas M. Horrock
Loudon Connection (VA)
Copyright 2007
U.S. Rep. Frank R. Wolf (R-10) last Thursday asked Gov. Tim Kaine (D) to urge the General Assembly to hold hearings "examining the operation of Greenway and the business practices of TRIP II and its parent company, Macquarie," as resistance to a forthcoming rate hike on the 14-mile Greenway toll road heightened.
Toll Road Investors Partnership II (Trip II) operates the Greenway, which runs from Leesburg to the Dulles Toll Road terminus at the Washington Dulles International Airport. The Greenway was conceived as a way to speed commuters from the fast growing Loudoun County to jobs in Fairfax, Arlington, Alexandria and Washington, D.C.
It now charges on a weekday between $3.50 for a car each way to $12 for a large truck.
In 2005, the Macquarie Infrastructure Group (MIG), part of an Australian bank and manager of investment funds, bought the road and, in effect, retained TRIP II to run the operation.
Last fall, the State Corporation Commission (SCC) gave TRIP II the right to increase the tolls to $4.80 at peak times in 2012 for cars and $14 for large trucks. At a hearing by the SCC June 28, of 59 witnesses, 58 opposed the rate increase, the SCC’s report said.
WOLF SAID he was "skeptical of the financial data that TRIP II may have submitted to the State Corporation Commission to justify raising the toll for cars to $4.80 each way on the Greenway by 2012." Wolf said the State Corporation Commission "approved the rate hike in September despite heavy opposition."
Wolf also said he was successful in getting Attorney General Bob McDonnell to launch an investigation and to spark the interest by several members of the state legislature.
The controversy over the Greenway has grown since the rate was approved last September. Its outcome may become crucial to road construction in Virginia as the state is about to sign contracts with two other firms, one also out of Australia, to build and operate toll collecting "Hot Lanes" on the Beltway and I-95.
DURING HIS CAMPAIGN as a Republican for state delegate in the fall election, Lynn Chapman, 54, an engineer and computer expert, analyzed the Greenway operations. His conclusion was that Macquarie was the beneficial owner of the Greenway, but the SCC had only analyzed the profit and loss of TRIP II in determining to grant a toll increase. Indeed, the Greenway toll road has never made a profit, according to state records.
"I have found evidence that the beneficial owners of the Greenway, Macquarie Infrastructure Group (MIG) and its affiliates, have used a combination of interlocking financial schemes to extract profits from the state-granted concession to own and operate the Dulles Greenway toll road," he wrote the attorney general.
He wrote the head the SCC and suggested that instead of analyzing the books of TRIP II, which showed the losses, the SCC should examine the books of Macquarie, the actual owner of the road. The chairman of the SCC wrote back and said that was "absurd," since Virginia’s only interest was in the operator. This would mean, Chapman said, that any firm, even a failing one or one based on criminal activity could take control of a road if it could mask its involvement with a front organization.
MACQUARIE’S WEB page designed for potential investors carries a description of the Greenway and said it is owned by TRIP II, a limited partnership.
A call to Macquarie’s New York office found that its public affairs officer was in Australia. Thomas Sines, the chief executive officer of TRIP II, called at the request of Macquarie. He said Chapman’s charges were incorrect and that disbursements to TRIP preceded Macquarie buying into the firm.
But the critics, Wolf, Chapman and others, say the problem is that Virginia’s process to regulate this relationship is flawed.
"In principal I’m not against public-private partnerships," Chapman said. "I believe that they are very, very difficult to regulate to a balanced interest of the public and private partner. Right now this particular partnership is so one-sided it is an embarrassment to citizens as well as the users of the toll road."
He said "there seems to be no self-correcting mechanism in the state of Virginia to deal with this problem and that is outrageous."
© 2007 Connection Newspapers: www.connectionnewspapers.com
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December 19, 2007
By Nicholas M. Horrock
Loudon Connection (VA)
Copyright 2007
U.S. Rep. Frank R. Wolf (R-10) last Thursday asked Gov. Tim Kaine (D) to urge the General Assembly to hold hearings "examining the operation of Greenway and the business practices of TRIP II and its parent company, Macquarie," as resistance to a forthcoming rate hike on the 14-mile Greenway toll road heightened.
Toll Road Investors Partnership II (Trip II) operates the Greenway, which runs from Leesburg to the Dulles Toll Road terminus at the Washington Dulles International Airport. The Greenway was conceived as a way to speed commuters from the fast growing Loudoun County to jobs in Fairfax, Arlington, Alexandria and Washington, D.C.
It now charges on a weekday between $3.50 for a car each way to $12 for a large truck.
In 2005, the Macquarie Infrastructure Group (MIG), part of an Australian bank and manager of investment funds, bought the road and, in effect, retained TRIP II to run the operation.
Last fall, the State Corporation Commission (SCC) gave TRIP II the right to increase the tolls to $4.80 at peak times in 2012 for cars and $14 for large trucks. At a hearing by the SCC June 28, of 59 witnesses, 58 opposed the rate increase, the SCC’s report said.
WOLF SAID he was "skeptical of the financial data that TRIP II may have submitted to the State Corporation Commission to justify raising the toll for cars to $4.80 each way on the Greenway by 2012." Wolf said the State Corporation Commission "approved the rate hike in September despite heavy opposition."
Wolf also said he was successful in getting Attorney General Bob McDonnell to launch an investigation and to spark the interest by several members of the state legislature.
The controversy over the Greenway has grown since the rate was approved last September. Its outcome may become crucial to road construction in Virginia as the state is about to sign contracts with two other firms, one also out of Australia, to build and operate toll collecting "Hot Lanes" on the Beltway and I-95.
DURING HIS CAMPAIGN as a Republican for state delegate in the fall election, Lynn Chapman, 54, an engineer and computer expert, analyzed the Greenway operations. His conclusion was that Macquarie was the beneficial owner of the Greenway, but the SCC had only analyzed the profit and loss of TRIP II in determining to grant a toll increase. Indeed, the Greenway toll road has never made a profit, according to state records.
"I have found evidence that the beneficial owners of the Greenway, Macquarie Infrastructure Group (MIG) and its affiliates, have used a combination of interlocking financial schemes to extract profits from the state-granted concession to own and operate the Dulles Greenway toll road," he wrote the attorney general.
He wrote the head the SCC and suggested that instead of analyzing the books of TRIP II, which showed the losses, the SCC should examine the books of Macquarie, the actual owner of the road. The chairman of the SCC wrote back and said that was "absurd," since Virginia’s only interest was in the operator. This would mean, Chapman said, that any firm, even a failing one or one based on criminal activity could take control of a road if it could mask its involvement with a front organization.
MACQUARIE’S WEB page designed for potential investors carries a description of the Greenway and said it is owned by TRIP II, a limited partnership.
A call to Macquarie’s New York office found that its public affairs officer was in Australia. Thomas Sines, the chief executive officer of TRIP II, called at the request of Macquarie. He said Chapman’s charges were incorrect and that disbursements to TRIP preceded Macquarie buying into the firm.
But the critics, Wolf, Chapman and others, say the problem is that Virginia’s process to regulate this relationship is flawed.
"In principal I’m not against public-private partnerships," Chapman said. "I believe that they are very, very difficult to regulate to a balanced interest of the public and private partner. Right now this particular partnership is so one-sided it is an embarrassment to citizens as well as the users of the toll road."
He said "there seems to be no self-correcting mechanism in the state of Virginia to deal with this problem and that is outrageous."
© 2007 Connection Newspapers:
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posted by Porkus Maximus Tex: at Thursday, December 20, 2007
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