Going the Wrong Way on Express Lanes
Whenever the public trust is in imminent danger--real or perceived--of being devoured by the dark forces of capitalism, we can expect to witness the high-minded outrage of government officials. Witness what we’ve had to endure over the California Private Transportation Co.’s plan to sell the 91 Express Lanes to NewTrac.
Even if some components of the deal appeared dubious, the hue and cry of many public officials is political opportunism poorly disguised as moral indignation. Worse, it signals a hasty juggernaut to exterminate an innovative public-private development model that has hardly been given the time to prove its legitimacy. To kill it would be shortsighted and counter to the long-term interests of all Californians. Several government folks including Orange County Treasurer-Tax Collector John M.W. Moorlach and Riverside County Supervisor Bob Buster have used the transaction as a catalyst to wrest operation of the 91 Express Lanes out of the purview of the private sector. The question is: Why?
Clearly, toll road naysayers don’t have much of an appetite for the creative thinking behind the 1989 legislation that empowered Caltrans to forge exclusive franchise agreements with the private sector to finance, construct and operate toll roads. Under AB680, the state invited the private sector to build badly needed highways and hand ownership back to the state for the right to operate them at a reasonable profit. The state achieved the development of new highways at a time when its coffers were depleted.
The 91 Express Lanes project was the first experiment under the public-private model. To its credit, and certainly to its risk, CPTC had the entrepreneurial courage to spend roughly $132 million for the technology and construction of the 10-mile tollway. In exchange, the state gave the company a 35-year franchise to operate the lanes at a reasonable profit.
During the six years the company has operated the Express Lanes, it has been ravaged by press reports and the whining of various public leaders over its supposed inability to attract more customers and turn a profit. Even if their assertions were accurate, they are irrelevant. CPTC’s operation remains a state-sanctioned private enterprise in which it assumes all the risk. Whether it has been profitable is immaterial to taxpayers. None of their money is at risk.
That CPTC would try to sell its Express Lanes franchise at a profit was and remains within its right. But because it sought to do so in a way that the minions of government found odd, it has been unmercifully fileted.
Far worse, however, is the glee with which local and state politicians are using the incident to advance the idea that the “greedy” private sector cannot be trusted, and that public-private highway partnerships should be scuttled.
Their campaign is both dangerous and shortsighted. As the state’s population continues to explode, California’s highway system will have to keep up. Which is fine so long as California’s coffers are flush and its economy humming. But when prosperity stalls and the money dries up, what then? Raise taxes to build highways? Pack the ballot with bond initiatives?
The pols better hope Californians are in the mood for such things. Otherwise, they’ll find themselves slinking back to the private sector asking if it wants to play ball again.
