Wednesday, June 26, 2013

Time For States to Lease Public Toll Roads To Private Companies: Indiana's Positive Experience In Leasing Roads

Posted by Milton Recht:

From The Tax foundation, "Lessons from the Indiana Toll Road" by Zachary Bartsch:
A new report by the Reason Foundation (PDF) reviews Indiana’s experience with leasing the Indiana Toll Road to a private operator.

The 156-mile Indiana Toll Road (ITR) lost money while under state operation and management. In 2006, the state leased the management, operation, expansion, and maintenance of ITR to the Indiana Toll Road Concession Company (ITRCC) for 75 years, in exchange for an upfront lump sum payment to the state of $3.85 billion.
The study concludes:

Given the overwhelming benefits that Indiana has reaped from leasing its toll road to a private operator, it makes sense for policymakers in jurisdictions with public sector toll roads to explore the potential value of leasing those assets as they develop strategies for closing a long-term mismatch between transportation needs and available funding. The ITR lease allowed the state to invest billions in transportation infrastructure during a major recession, taking advantage of competitive pricing and robust contractor competition in a down economy to modernize the state’s transportation system for decades to come.

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