Holland Tunnel

“If the Holland Tunnel were run as a public-private partnership, the fee today would be $180, not $6,” Dennis Enright, the principal and founder of NW Financial told the EuroMoney conference meeting yesterday in the plush Waldorf Astoria Hotel in New York City.

Yesterday was the first day of a two-day seminar devoted to teaching state government officials how to lease public assets to foreign investment interests.

WND reported last week EuroMoney kept WND out of the conference, refusing to accept 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.

In a panel devoted to arguing the case for and against public-private partnerships, Leonard Gilroy of the Reason Foundation disagreed with Enright, arguing “just because a public-private contract allows tolls does not mean the private lease holder will charge the full amount.”

Waldorf-Astoria in New York City

Gilroy argued Enright was ignoring elasticity of demand and said private operators in PPP deals would have to keep tolls low or lose customers.

Enright retorted that non-compete clauses in PPP contracts give private operators full rein to set prices wherever they want, arguing that if the Holland Tunnel were sold to a private foreign investment concern, the choice would be to pay the $180 toll or find another way across the Hudson River.

Last week in an op-ed piece published on the website of the Los Angeles Times, Gilroy and Shikha Dalmia, a Reason Foundation colleague, attacked opponents of the Trans-Texas Corridor as “xenophobes” engaging in a “paranoid style” of politics.

WND also has reported Oklahoma House Speaker Republican Lance Cargill brought Richard Poole, the founder of the Reason Foundation, to Oklahoma to advocate extending the Trans-Texas Corridor north into Oklahoma via a PPP investment structure.

When asked to vote, a show of hands indicated virtually every attendee in the 300-person audience was in favor of public-private partnerships to structure the next U.S. generation of highways as foreign-operated private toll roads.

A panel of state department of transportation officials discussed the “politics, needs, laws and deals” of PPP highway infrastructure opportunities.

Peg Schmitt, spokeswoman for the Wisconsin Department of Transportation, told WND that Kenneth C. Newman, policy and budget director for the Wisconsin DOT, attended the EuroMoney seminar in New York “to talk with people about PPP opportunities and see what other states are doing to advance public-private partnerships.”

“Our secretary of transportation, Frank Busalacchi, has voiced concerns about P3,” Schmitt told WND, “and he has been an outspoken critic of P3 highway financing, even in his testimony to Congress.”

Schmitt told WND that since Newman was a panelist, EuroMoney paid his travel expenses to attend the conference, not the Wisconsin DOT.

On Feb. 13, Busalacchi testified to the Subcommittee on Highways and Transit of the House Committee on Transportation and Infrastructure, “The P3 model comes up short for Wisconsin.”

Yet, other states on the panel disagreed. Cedric Grant, assistant secretary of the Louisiana Department of Transportation, told the conference his state looks to the DOTs in Virginia and Texas for P3 advice and consultation.

The PPP section of the U.S. Department of Transportation Federal Highway Administration website confirms the 8.8 mile Pocahontas Parkway toll road is leased for 99 years to an Australian investment consortium in a structure underwritten by Lehman Brothers and Bear Stearns.

The Texas Department of Transportation website confirms the Trans-Texas Corridor, the four-football-fields train-automobile-truck-pipeline corridor is being constructed under a 50-year lease PPP contract with the Spain-based consortium Cintra.

At the end of the first day, a panel of private foreign investors told conference attendees foreign private investment capital was more available for PPP infrastructure of U.S. highway projects than U.S. capital.

The panel included representatives from three major private investment consortia in Spain that specialize in highway infrastructure: Cintra, Acciona and OHL.

Investment bankers from the Carlyle Group, Allstate Investments, Nuveen Asset Manager and AIG Highstar told attendees $100 billion was currently available for PPP financing of new private-operated toll roads in the U.S., with the majority of the funds coming from foreign investment interests.

While EuroMoney shut out WND from the conference, various attendees telephoned WND to provide detailed accounts on proceedings.

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