Driving to Ruin Along Toll Road

I was deeply disturbed to learn of the U.S. Senate’s approval of up to $120 million in federal loan guarantees for financing of the San Joaquin Hills toll road (“Tollway Gets Backing Inside the Beltway,” Aug. 8).

Such guarantees are necessary because the project is incredibly risky, and the (Transportation Corridor Agencies) believe that toll revenue and developer fees alone will be insufficient to service the construction bond debt.

The article failed to mention that the TCA plans to secure the lion’s share of toll road financing from foreign banks.

The TCA has already agreed to pay $1,750,000, nonrecoupable, for a consortium consisting of one American and four foreign banks to examine whether those institutions will even consider investing in the toll road.

If a deal goes forward, each of the five banks will receive a $200,000 “success fee,” for a total of $1 million over and above the loan placement fees or points each bank will receive.

A U.S. loan guarantee on top of all this is, in effect, a guarantee that not only will the participating banks recover their investment, they will receive a handsome profit as well.

It is nothing short of obscene that our government, now presiding over a multibillion-dollar bailout of U.S. savings and loans, would even consider guaranteeing a bailout of Asian and European banks as well!

The San Joaquin Hills toll road is a financial quagmire, environmental disaster and political hot potato that should have been scrapped long before now. The project will never be financially viable.

As it is, this black hole of bureaucratic ineptitude has already cost Orange County taxpayers somewhere in the neighborhood of $100 million in property taxes, state gasoline taxes and government loans.

Under no circumstances, but especially during these troubled economic times, should the U.S. Senate squander taxpayer dollars to guarantee the stability of foreign investment in the United States.

Let’s not throw good money after bad. The Senate should bail (out of the) toll road before we taxpayers wind up bailing out yet another pork-barrel disaster.

ANITA M. MANGELS, Laguna Beach