Let Investors Finance the Highway

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The recentdecisive defeat of a $9.6 billion highway tax and bond proposalmay indicate that Arkansas voters do not trust the politicalsystem to allocate highway funds. Too often politicians treathighways as "pork" -- payoffs to campaign contributorsor special interests, or ways of currying favor with particularconstituencies. That explains in part why the nation has 9,542miles of interstate highway carrying fewer than 10,000 vehiclesper day and 21,422 miles of sub-expressway rural roads carryingmore than 10,000 vehicles per day.

Taxpayers do not have to bear theburden of building and maintaining major roads or depend onpoliticians to site them. Increasingly investors are financingtoll roads for which motorists will pay in accordance with theiruse of the road.

In northern Virginia investorsfinanced the Dulles Greenway, a $320 million 14-mile expresswayfrom Washington Dulles International Airport to the town ofLeesburg. It is not attracting the volume of traffic that itsinvestors expected and may go broke. But if it's sold off bycreditors at a fraction of the cost, it will easily pay foritself. In any case Virginia taxpayers have not spent a cent, andbear no liability, while they have the choice of an excellentexpressway at a $1.75 toll between Leesburg and Washington.

More successful financially isState Route 91 Express Lanes, a fully investor-financed tollfacility just opened in Orange County, California. Making use ofelectronic tolling, this 10- mile $125 million four-lane facilitygives motorists caught in Los Angeles's commuter backups theoption of paying a $2.50 toll for an express ride down the middleof a congested eight-lane "free" freeway.

Arizona, California, Minnesota,Michigan, Georgia, Virginia and the Carolinas are all discussingmore investor-built highways. State-owned turnpikes in Florida,Pennsylvania, New Jersey, New York, Pennsylvania, Massachusetts,Illinois, Indiana, Ohio, Kansas, Maine and Oklahoma are arguablyan improvement on so-called "free" highways. Butunfortunately the politicians get to appoint the turnpikes'boards of directors and otherwise interfere with decisions.

Investor-built highways arepolitically clean, so long as they are given no taxpayer backingand are the result of competitive bids.

The most exciting major newinterstate highway project is Corridor 18, designed to provide ahigh-grade highway link from Canada through the U.S. Midwest toMexico -- sometimes dubbed the NAFTA highway. It will costbetween $5.5 billion and $13 billion, depending on whether it isbuilt to regular interstate expressway standards or as a specialhigh-speed (100 mph) long-truck route with provision forautomated hands-off-feet-off driving. That important facilitywill be built only with a large share of investor funding --based on the prospect of tolls.

Corridor 18 offers substantialeconomic promise to southeastern Arkansas. The highway would comesouth from Indianapolis, cross the Mississippi River near Memphisand head across Arkansas toward Shreveport.

Even a complete outsider likemyself can look at the road map and see that the Arkansas highwaysystem is politically dictated. It is completely centered onLittle Rock, which leaves the state with very poor and circuitousroad connections to economically important nearby centers such asAtlanta, Shreveport, Houston, Baton Rouge, Jackson, Mobile, St.Louis and Kansas City. And how does a trucker in Arkansas get toanywhere in Florida, a huge and growing market?

The Little Rock hub-and-spokeplan of Arkansas freeways has obviously been designed bypoliticians seeking to reinforce the dominance of the capital.Investor-built roads would more likely emphasize upgrading thestate's links with major ports and industrial cities in nearbystates, enhancing Arkansas's economy and competitiveness andbenefiting its industries and citizens -- rather than itspoliticians and bureaucrats.

Peter Samuel

Peter Samuel is a free-lance writer specializing in transportation issues and author of Cato Institute Policy Analysis "Highway Aggravation: The Case for Privatizing Highways."