Establishing public-private partnerships that give away control of U.S. infrastructure to foreigners is like playing the casino game “Texas hold’em,” a top Texas Department of Transportation official told the EuroMoney conference meeting yesterday in the plush Waldorf-Astoria Hotel in New York City.
James Bass, the chief financial officer of TxDOT, was speaking on the second day of a two-day seminar devoted to teaching state government officials how to lease public assets to foreign investment interests.
“Sure, you can expect political objections,” Bass told the conference, “but if you play your cards right, you’ll win.”
WND reported last week EuroMoney shut out WND from the conference, refusing the $1,999 registration fee because WND was “too political” to attend.
Throughout the conference yesterday, various attendees telephoned WND to provide detailed, inside accounts on conference proceedings.
As WND has reported, campaign contributions to Gov. Rick Perry paved the way for TxDOT to build the Trans-Texas Corridor, a four football-fields-wide truck-car-train-pipeline to run parallel to I-35. In the PPP deal, Cintra, a Spanish investment concern, will own the toll rights on the superhighway for 50 years after it is built.
Speaking to the conference about a deal in Colorado, Denver attorney Edward Icenogle said, “It was a lawyer feeding frenzy.”
“We had so many lawyers involved in the deal that we almost ran out of law firms in Denver to hire,” he said.
Icenogle is a lead lawyer for the 11-mile Northwest Parkway, a Denver-area toll road that locals widely call the “Billion Dollar Boondoggle.”
Hostile questioners from the EuroMoney conference audience pressed Icenogle to justify millions of taxpayer dollars required to hire the “army of attorneys” needed to structure the Northwest Parkway private-public partnership, or P3, deal.
Icenogle rejected characterizing the Northwest Parkway as a “conspiracy of lawyers,” but he did concede the P3 deals were lawyer-intensive, generally demanding complicated revisions of state law and negotiations with foreign attorneys in multiple languages.
Icenogle appeared on a panel giving an update to the Northwest Parkway, along with Karen Stuart, the mayor of Broomfield, Colo., who is leading the move to lease the toll road under a P3 deal with Portugal and Brazil.
Stuart defended a move to accept some $500 million from a private investment consortium composed of Portugal’s Brisa Auto-Estradas and their Brazilian partner Companhia de Concessoes Rodoviarias. The foreign firms want to operate the toll road under a 99-year lease in which they would receive the tolls.
At the conclusion of the Northwest Parkway panel, a questioner from the audience asked Stuart why, if the P3 deal was so good for the Portuguese and Brazilian investment concerns, was the project taken from public ownership?
Stuart answered that there were complex risks involved in getting enough toll-road riders to cover construction costs.
Locals in the Denver area joke that children should use the Northwest Parkway central lanes as bicycle paths given the lack of motorists.
Critics in Colorado argue the Northwest Parkway is bankrupt and Fitch, a bond rating agency, has downgraded some $420 million in outstanding Northwest Parkway bonds to CCC+ grading, with a “negative” rating outlook, a status usually reserved for junk bonds.
Ray Medina, president of Citizens Involved in the NW Quadrant, has been quoted as criticizing Broomfield for making “a poor decision to financially support an ill-conceived toll road,” arguing the Northwest Parkway has “saddled Broomfield taxpayers with a huge debt that the Broomfield government is scrambling to find a way out.”
Stuart defended the deal but was forced to concede the Northwest Parkway was struggling to meet traffic projections and its high tolls remain a barrier.
The conference ended with Mark Florian and Gregory Carey, managing directors from Goldman Sachs, explaining how state lotteries and sports stadiums could be privatized to foreign investors under P3 deals.
Elizabeth Rao, assistant general nanager and head of “FasTracks” at RFD transit in Denver, told the group her department retained outside lawyers and hired additional staff as they prepared to explore P3 foreign financing to privatize Denver’s light rail.
Rao claimed the savings to the taxpayers would only be in the range of about 5 percent after the deal was done.
Approximate 300 attendees, including officials from state and city departments of transportation, listened for two days as lawyers and investment bankers explained the legal documents and financing structures needed to sell a wide range of public infrastructure to foreigners.
“Under P3, the USA is up for sale,” a conference attendee told WND by telephone at the conclusion of the meeting. “Whatever the public now owns – roads, ports, waste management water systems, rail lines, public parking facilities, airports, even lotteries and sports stadiums – are up for grabs and the only requirement is that the foreigners have the cash.”