Abstract
Privatization of highways through long-term concession deals represents a new and important phenomenon for U.S. transportation finance and operations. As its first investment in the United States, in 2002 the Macquarie Infrastructure Group (MIG) acquired a majority interest in a Southern California greenfield project, the South Bay Expressway, which it built and opened in 2007. Although, the United States had a long history of private toll roads in the nineteenth century, the privatization of existing American highways began in 2005. In that year, a Macquarie-led group leased the Chicago Skyway. Then in 2006, a Macquarie-led joint venture obtained the concession to operate and maintain the Indiana Toll Road. In addition to leasing these two publicly funded toll roads, previously, in 2005, MIG took over an existing private toll road, the Dulles Greenway, in Northern Virginia.
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Notes
I have drawn on Daniel Klein and John Majewski, “America’s Toll Road Heritage: The Achievements of Private Initiative in the Nineteenth Century,” in Street Smart, ed. Gabriel Roth (New Brunswick, NJ: Transaction Publishers, 2006).
Daniel B. Klein, “The Voluntary Provision of Public Goods? The Turnpike Companies of Early America,” Economic Inquiry 28:4 (October 1990): 788–812
Daniel B. Klein and Gordon J. Fielding, “Private Toll Roads Learning from the 19th Century,” Transportation Quarterly 46:3 (July 1992): 321–341
Daniel B. Klein and Chi Yin, “Use, Esteem, and Profit in Voluntary Provision: Toll Roads in California, 1850–1902,” Economic Inquiry 34:4 (October 1996): 678–692
José A. Gómez-Ibánez and John R. Meyer, Going Private: The International Experience with Transport Privatization (Washington, DC: Brookings Institution, 1993), 164–168.
Federal-Aid Highway Act of 1956, Public Law 84–627. For background on the enactment of the Federal-Aid Highway Act of 1956, see Tom Lewis, Divided Highways: Building the Interstate Highways, Transforming American life (New York: Viking, 1997), 98–123.
Dan McNicol, The Roads that Built America: The Incredible Story of the U.S. Interstate System (New York: Sterling, 2006)
An Act To permit the granting of Federal aid in respect of certain roads and bridges, Public Law 69–773. See generally, Gary L. Gittings, “Some Financial, Economic, and Social Policy Issues Associated with Toll Finance,” in Transportation Research Record 1107, Private-Sector Involvement and Toll Road Financing in the Provision of Highways (Washington, DC: Transportation Research Board, National Research Council, 1987), 21.
35 ILCS 200/15-60 and 200/9-195. See also Yvette Shields, “Windy City Wind fall,” BondBuyer 305:3201 (November 17, 2004): 1.
Elaine Schmidt, “Chicago Skyway Rebuild Ensues in Traffic,” Midwest Construction 5:9 (August 2002): 73
Quoted in Gary Washburn, “Skyway toll may go to $2.50,” Chicago Tribunes, October 28, 2004, Metro Section, CI. See also Giles Parkinson, “A toll tale,” Institutional Investor (International Edition) 31:3 (March 2006): 52–58
IRC §197(a), (d)(1)(D), (d)(1)(F) and Reg. §1.197-2(b)(8),-2(b)(10) (i). See Victor Hollender, “Privatizing Our Infrastructure: Taxing the Toll or Tolling the Tax,” Tax Notes 122:12 (March 23, 2009): 1479–1492.
For background on the Dulles Greenway, see Auditor of Public Accounts, “Dulles Greenway,” n.d. and TollRoadsnews, “Macquarie Buying VA Dulles Greenway for $615m,” 2005–08-30. See also U.S. Department of Transportation, Report to Congress, 153–154; Peter Samuel, “Bringing Back the Turnpikes,” Forbes 155:2 (January 16, 1995): 57–59
I have drawn on MIG, Press Release, “MIG to Invest in Dulles Greenway Toll Road, Virginia and Take Operational Responsibility,” August 30, 2005; MIG, Press Release, “Dulles Greenway-Financial Close,” September 9, 2005; MIG, Financial Report, June 30, 2006, 2, 45, 57. See also Giles Parkinson, “Macquarie Gets Stake in Va. Turnpike,” Daily Deal/The Deal, August 31, 2005, Middle Market Section; Humberto Sanchez, “Infrastructure,” Bond Buyer 353:32220 (September 2, 2005): 5
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© 2009 Lewis D. Solomon
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Solomon, L.D. (2009). Macquarie and the Privatization of Highways in the United States. In: The Promise and Perils of Infrastructure Privatization. Palgrave Macmillan, New York. https://doi.org/10.1057/9780230101418_6
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DOI: https://doi.org/10.1057/9780230101418_6
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