Monday, January 23, 2006
Indiana offered $3.85 billion for toll road
A Spanish company named Cintra-Macquarie has offered the state of Indiana $3.85 billion for a seventy-five year lease to operate the Indiana Toll Road. Also known as Interstate 80/90, the toll road extends from East Chicago across the northern tier of the state to the Ohio border.
The state had put the toll road up for bid with a minimum price of $2 billion. Four bidders submitted sealed bids above that amount, but Cintra-Macquarie's bid won at nearly double the minimum price. Cintra-Macquarie operates more than thirty toll roads around the world and had previously won a 99-year lease for the Chicago Skyway, offering more than double what Chicago thought they could get for it.
Indiana plans to use the money to improve infrastructure in various parts of the state. Final approval must be granted by the state assembly, but the state expects to close on the deal by June 30.
The state had put the toll road up for bid with a minimum price of $2 billion. Four bidders submitted sealed bids above that amount, but Cintra-Macquarie's bid won at nearly double the minimum price. Cintra-Macquarie operates more than thirty toll roads around the world and had previously won a 99-year lease for the Chicago Skyway, offering more than double what Chicago thought they could get for it.
Indiana plans to use the money to improve infrastructure in various parts of the state. Final approval must be granted by the state assembly, but the state expects to close on the deal by June 30.
Comments:
The tolling of American roads is probably the only solution to todays traffic jams. By making motoring expensive, unnecessary trips via automobile will be eliminated.
I expect this will lead to more individuals moving closer to their jobs in the near future. In other words, living in the burbs will become very expensive as these tolls start to skyrocket forcing the population back cities or towns that have transportation alternatives.
I expect this will lead to more individuals moving closer to their jobs in the near future. In other words, living in the burbs will become very expensive as these tolls start to skyrocket forcing the population back cities or towns that have transportation alternatives.
To be effective at reducing congestion, road tolling would have to vary by the amount of congestion. If it is the same price all day long, it won't be any different from paying gasoline taxes -- and so far the price of gasoline has not encouraged many people to live closer to jobs.
It is entirely possible that congestion pricing of roads could lead people to live closer to jobs. But there are other possibilities as well.
*Flex-time employment could increase so more people can drive to work during less-busy hours.
* More people might choose to work at home a few days a week, but still commute to distant jobs on other days.
* If congestion pricing really reduces congestion, some people might choose to live further from their jobs since, without congestion, they can go further in the same amount of time. This could offset the people who decide to live closer to save tolls.
So there are lots of possibilities and I personally don't care which one happens. I just like to see a system in which everyone pays their own way.
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It is entirely possible that congestion pricing of roads could lead people to live closer to jobs. But there are other possibilities as well.
*Flex-time employment could increase so more people can drive to work during less-busy hours.
* More people might choose to work at home a few days a week, but still commute to distant jobs on other days.
* If congestion pricing really reduces congestion, some people might choose to live further from their jobs since, without congestion, they can go further in the same amount of time. This could offset the people who decide to live closer to save tolls.
So there are lots of possibilities and I personally don't care which one happens. I just like to see a system in which everyone pays their own way.
