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Opening Arguments

Timing is everything

When Indiana leased its toll road for $3.8 billion in 2006, a lot of critics accused the Daniels administration of giving away the state, but a lot of other state governments looked to follow that example and the one three years earlier involving Chicago Skyway lease. There were proposals on the table worth at least $10 billion for the leasing of everuthing from highways to lotteries. But that was before the recession:

A rush by state and local governments to sell roads, bridges and airports to private operators in return for eye-popping upfront sums has all but collapsed in the recession.

That could leave taxpayers on the hook for more of the $200 billion a year needed to maintain the nation's transportation system, according to federal estimates.

[. . .]

The purchase of government assets has all but stopped as credit has dried up. Now, with tax collections falling, state and local governments are scrambling to finance projects.

The biggest casualty so far: a $2.5 billion agreement to sell Chicago's Midway Airport fell apart in June when investors could not round up enough money.

"Investors are skeptical. These are difficult times," says Peter Samuel, editor of Toll Road News, a trade publication. The buyers of the Chicago Skyway and Indiana Toll Road "have lost their shirts," he says.

And Indiana's lease that was so controversial at the time?

Earlier this year, Macquarie Infrastructure Group said its toll road investments, which include the Chicago Skyway and Indiana Toll Road, had lost one-third of their value. The investments are made based on long-term, historic trends, company spokesman Alex Doughty says. "In any business, there's likely to be peaks and troughs," he says.

In the meantime, though, we're using that $3.8 billion, which we got in cash, for 400 road projcets. So maybe it wasn'