irginia has long been in the forefront of using privatization as a way to finance public projects without draining public budgets. It has been touted as a way to have your cake and eat it, too, by both Democrats and Republicans.
But there have been big problems with the concept. Most recently, offers to buy out management of the Virginia Port Authority’s massive container shipping facility in Hampton Roads were rejected because private companies such as CenterPoint and Carlyle offered absurdly low ball figures. The Pocahontas Parkway near Richmond didn’t live up to its traffic volume expectations and its financial and managerial structure had to be quickly redone to preserve the state’s AAA credit rating status.
Now comes the latest twist. According to a Wall Street Journal story this morning, private companies are no longer waiting for states or localities to pitch public works projects, and are coming up with their own ideas and pushing them.
Just about the time earlier this month that the state dumped selling off VPA because of the lowball prices offered, Skanska Infrastructure Development and Kiewit Infrastructure among other firms pitched expanding the existing Hampton Roads Bridge Tunnel from two lanes to four at a cost of up to $4.5 billion.
The bridge tunnel, as anyone who has ever traveled to Tidewater knows, is a horrible bottleneck that can result in long delays early on weekday mornings as commuters flock to jobs at the huge Naval bases nearby or on weekends when vacationers head to the beaches.
The two-lane tunnel has been around since 1957 and the bonds paid for by tolls were settled in 1976. The tolls were lifted long ago.
The problem is that many in the local community, including Norfolk Mayor Paul Fraim are angry with the unsolicited private proposal because it would involve uprooting hundreds of homes and stick motorists with tolls of up to $6 one way. Thus, a commuter working at the Norfolk Naval Base who lives in Hampton would have to shell out an extra $240 a month just to commute to his or her job.
That’s a lot of dough just so some huge private firms can get their investment back. There have been proposals for third crossings not involving expanding the existing HRBT but funding has been scarce.
The Journal notes that events such as this are being repeated in other states and are taking the privatization concept to a new level.
It is a troubling development. Despite what the privatization fans think, the concept puts private business in the driver’s seat. They should not be making decisions about whose house gets to be condemned to make way for their project. And they should not be allowed to set toll rates without public input.
We’re not talking “magic of the market” nonsense here. Let’s say Skanska and friends get their way. If you are a commuter you do have a choice not to pay the toll, but it presents a ridiculous inconvenience. You would have to drive all the way to Newport News and take another bridge tunnel and then crawl to Norfolk from Portsmouth, adding maybe an hour one way to your commute. Or you could swim.
At last weekend’s celebrated Tea Party convention, the “patriots” had booths pushing information about eminent domain issues in which the state misused its power to force people from their homes a la the Kelo case in Connecticut.
I tend to be with the patriots on this one. But the bigger question is, if the bad guy is private business and not public government, will they have the nerve to fight that too.? What gives large corporations the right to shove people from their homes and set usury tolls?
Peter Galuszka