Friday, February 04, 2005

The Way Out Is Thru

See, in the future everyone will be introducing stories about privatization using Nine Inch Nails songs (to digress a moment, there will be new NIN album out soon. Always interesting, never quite gripping).

We can get away with this nasty, brutish pun, because we wish to draw your attention to the front page story of New York Newday, conveyed to us via the dulcet tones of Pat Kiernan on NY1:

Hey you, wanna buy a bridge?,

screams the headline, in a riff on the old joke about selling the Brooklyn Bridge, although the bridge in question is the Tappan Zee one located upstate. The Pataki administration, bored of selling their principles, loyalties, and warm soft bodies, has now decided to move on to transport infrastructures, and the Thruway has some tempting assets. Under the latest plan, the state would be looking to transfer the Tappan Zee, and its tolls, to the private sector under a long-term lease, in exchange for improvemments to the structure and lots of lovely money.

Every few years, a transportation official suggests it, and rather like social security reform it gets bogged down in endless mathematical squuabbling over the "cost" of the sale. Since 95% of the population cannot get their heads around how their pensions work, asking them to take a position on the elimination of life-cycle maintenance costs, and the present value of improvements to a structure, not to mention the avoided cost of delays to construction, is highly unlikely.

Hell, we write about this, and even we can't give you an answer about whether it's a good idea. But the arrangement, often referred to as a Public Private Partnership (PPP), because it's so warm and fuzzy, can raise a bunch of money. As the Chicagoist noted late last year, the city of Chicago raised $1.8 billion from selling its Skyway to a consortium of Macquarie of Australia and Cintra of Spain. Macquarie is now talking to the Thruway about taking over the bridge.

We suspect that this little tale has a while to run, and that cutting a deal with the craven Pataki will be a tad more difficult than cutting one with chicago's Mayor Daley, who has done what the hell he likes ever since his Daddy helped JFK win the presidency in 1960.

It won't be helped by suggesting that the same thing would be suitable for the second avenue subway. While the long-suffering denizens of London have indeed been enduring just such an arrangement on their , er, beloved, Tube the process is hideously complicated. Getting it past the sort of politician that spouts the nonsense below will be nigh on impossible:

"They give Donald Trump the Second Avenue subway," said Assemb. Richard Brodsky (D-Westchester). "He builds it. How do you think he pays back his bank? He raises fares."

Unfortunately, though, our little friend, and, it must be noted, no friend of Pataki, has a point. To get the big bucks for your asset, you'll have to let your "partner" raise fares, at least by a little. They can do it on the Skyway, and they'll want to do it on most of the prime assets. They may also have a bit of an aversion to heavily unionised workers, although they are a tad more flexible than in days gone by.

Note to private road operators: hire Libby as a consultant now.



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