|page last modified September 20, 2013 122800||.|
Budget for East West Highway project in 2008 dollars as proposed by Cianbro: $2.145 billion
Included in this budget (as private capital):
"the East West Highway is not an attractive investment unless some financial contribution is provided by the state/provincial entities" (p. 44)
(Source: 2008 East West Highway Conceptual Feasibility Study Calais to Coburn Gore commissioned by Cianbro Corp. and prepared by Louis C. Berger Group, Inc. Download)
"The proposal must limit the use of state capital funding to less than 50% of initial capital cost of the transportation facility"
(Source: State of Maine Statute, Title 23 Sec. 4251 Public-Private Partnerships; Transportation Projects. Download)
"Although P3s [Public Private Partnerships] are advertised as tapping the power of private capital markets to invest in public infrastructure, the reality is that P3 investors enjoy large public subsidies. For example, private companies building P3 highway projects now routinely expect states to grant them authority to issue qualified private activity bonds (PABs). Unlike most lending in private capital markets, interest payments on PABs are exempt from federal taxes.... Since the bonds are not taxed, they allow the borrower to obtain cash at less cost. This form of financing, then, is essentially a tax cut for the investment banks and corporations with the P3 contract. The U.S. Department of Transportation also routinely grants Transportation Infrastructure Finance and Innovation Act (TIFIA) loans to P3 developers. TIFIA loans provide companies with much cheaper interest rates and more flexible terms than anything available in the private capital markets---again because the public subsidizes them."
(Source: Highway Robbery by Darwin Bondgraham, Nov/Dec 2012. Dollars and Sense: Real World Economics)
"A recent Congressional Budget Office (CBO) report [states] 'the case is sometimes made that using funds from private capital markets to finance roads can increase the resources available to build, operate, and maintain roads,' the report notes 'but the sources of revenues available to pay for the cost of a highway project---whether it uses the traditional financing approach or a Public Private Partnership---are the same: specifically tolls paid by users or taxes collected by either the federal government or by state and local governments.'"
(Source: Highway Robbery by Darwin Bondgraham, Nov/Dec 2012 Dollars and Sense: Real World Economics.)
"There is no debate about whether public borrowing costs are lower than the private sector's. Defenders of road privatization may argue that private-sector efficiencies will offset the private sector's higher borrowing costs, but there is little evidence that those efficiencies, where they exist, can make up for higher cost of capital." (p. 25)
(Source: 2009 Private Roads, Public Costs: The facts About Toll Road Privatization and How to Protect the Public, U.S. PIRG Education Fund)
The MDOT concluded that an East-West Highway through Maine would bring no "real economic benefit" and that the harmful "bypass effects" on the communities located on or near the route did not justify building a new four lane highway in Maine.
(Source: 1999 A Summary of the Findings of Studies Regarding a Maine East-West Highway prepared by the Maine Department of Transportation.)
(Source: 1999 Maine East-West Highway Economic Impact Analysis Phase IV Techinical Report Case Study Research)