Below are links to articles written about the recent purchase of the NWP toll road by a foreign country – interesting the US couldn’t see owning a canal in another country, so after all the blood, sweat, tears and money the US spent building the Panama Canal, we gave it to Panama. Now, we spend huge sums of money building roads in the US and give it to foreign countries – okay, so we didn’t give it too them, in fact, Portagal company Brisa, paid a huge sum of money for a toll road which hasn’t made a dime since it opened.
Obviously they know something NWP management didn’t – will it be a simple as raising the toll 50% to make the road profitable? Maybe.
At the end of this email are comments made by Rob Dougherty about the purchase of the toll road.
Wendy
http://coloradoconfidential.com/showDiary.do?diaryId=2699
http://www.unbossed.com/index.php?itemid=1707
On 9/2/07, Rob Dougherty <robdougherty@rmi.net> wrote:
This Post article says that Brisas got a noncompete agreement in their
contract for taking over the NW Parkway.
http://www.denverpost.com/business/ci_6776865
Doesn't that violate CRS 43-3-304 passed as part of HB06-1003? The statute says that roads that are on the regional/statewide transportation plans can't be stopped by a noncompete agreement. As far as adding more roads to those plans Broomfield and other towns couldn't stop the transportation commissioners from adding roads and then building them. So a noncompete might keep a city from campaigning to add a road to a plan but not much else. Right?
Rob
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43-3-304. Noncompete agreements.
Statute text
A toll road or toll highway company may not enter into a noncompete
agreement with a public entity if the agreement would degrade an existing
roadway or either delay or prevent the construction or upgrading of a road
or highway that is included in the fiscally constrained regional
transportation plan required by section 43-1-1103 (1) or the fiscally
constrained comprehensive statewide transportation plan required by section
43-1-1103 (5).
History
Source: L. 2006: Entire part R&RE, p. 1775, § 3, effective June 6.
*********************************
http://www.denverpost.com/business/ci_6776865
al lewis | columnist
Parkway lease fool's gambit
By Al Lewis
Denver Post Staff Columnist
Article Last Updated: 09/01/2007 10:46:09 AM MDT
Who is the greater fool?
a) Those who would rather pay tolls than taxes.
b) The Northwest Parkway Public Highway Authority, which built a 9-mile road
to nowhere that hasn't generated enough tolls to pay its debts.
c) Investors from Portugal and Brazil who last week agreed to pay up to $800
million to lease and possibly expand the failing roadway for 99 years.
d) The next generation of suckers who get sucked into this scheme.
Right now, it's Brisa Auto-Estradas de Portugal and a Brazilian partner
throwing good money after bad.
Under terms of its lease, this consortium can raise the Northwest Parkway's
toll from $2 to $3 when the deal is closed next month. Locals joke that
their children could bike down the parkway because there are no cars to hit
them. Does Brisa project that more people will use the road once it raises
the price?
Brisa also received a noncompete clause in its lease. For the next 99 years,
nobody can build a roadway or transportation that adversely affects Brisa's
toll-road traffic. If they do, Brisa can demand compensation or back out of
the lease.
Anyone who wants to build a road, railway or bus line in Broomfield had
better brush up on their Portuguese.
It's practically congestion by design. Jack the tolls. Make sure nobody
builds new roads.
"It's a protection that Brisa wanted for its monopoly on this corridor,"
said John Putnam, a private attorney for the city of Golden, which is doing
everything it can to keep the exorbitantly priced parkway from crossing its
borders.
Brisa is betting that it can turn the parkway's fortunes. The payoff will
come if Brisa ever finds a way to connect the Northwest Parkway with C-470
and Interstate 70.
This would mean the coveted completion of the beltway that now only goes
about three-quarters around Denver.
It would pipe tons more traffic through Brisa's toll plazas for years after
most of us reading this today are dead.
Where would Brisa get the money to extend this road?
The city of Broomfield and the parkway authority have not only agreed to
help Brisa do whatever possible to extend the tollway, but the authority
will receive tens of millions in financial incentives if the road is
extended.
They have, in effect, sworn allegiance to foreign powers over their
neighbors in Jefferson County. But where are they going to get the money?
Politicians from Gov. Bill Ritter to most municipal council members are
trying to figure out ways to raise revenues for roads. But so many of
Colorado's bridges and roadways are in disrepair that it's hard to imagine
the needs of this Portuguese highway as a priority.
Clearly, Brisa would like taxpayers to help build its road so it could toll
them more often, but asking for tax dollars in Colorado is like asking for
federal emergency assistance in New Orleans.
It's easier these days to go begging on Wall Street.
BusinessWeek magazine recently predicted that $100 billion worth of public
property could change hands in the next two years, including a lease for the
Pennsylvania Turnpike that could go for more than $30 billion.
"Banks and private-investment firms have fallen in love with public
infrastructure," BusinessWeek reported. "They're smitten by the rich cash
flows that roads, bridges, airports, parking garages and shipping ports
generate - and the monopolistic advantages that keep those cash flows as
steady as a beating heart."
This is why Brisa is running roads in America, but the Northwest Parkway
needs help. Traffic was so slow, the parkway's authority faced default on
$503 million in bonds, and now Brisa hopes to run it with an $800 million
pledge?
What Brisa needs is a greater fool.
If private investors can connect the Northwest Parkway to C-470, Denver will
finally have a completed beltway, with higher tolls but no new taxes.
It's either a stroke of genius or folly.
In the meantime, some Colorado motorists will either be paying tolls to
foreign investors or stuck in traffic because Brisa put the fix on
developing other roads. So who is the greater fool? I think the answer is
a).
Al Lewis' column appears Sundays, Tuesdays and Fridays. Respond to Lewis at
denverpostbloghouse.com/lewis, 303-954-1967 or alewis@denverpost.com.