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Bad deal?

Hey, anybody up for reopening the debate over the toll road lease?

Sure, the state of Indiana got $3.8 billion by leasing management of the Indiana Toll Road to a private concessionaire.

That isn’t pocket change, and the funds have been put toward improvement of Indiana’s infrastructure per the state’s 10-year Major Moves road plan.

A public policy expert’s new review of the 2006 deal, though, casts doubt on whether the transaction is all it’s cracked up to be. Indeed, John Gilmour, a government professor at the College of William and Mary in Williamsburg, Va., says future generations of Hoosiers will be short-changed.

As he sees it, Indiana has essentially taken a lump sum payment here and now on the value of the toll road — akin to a home-equity loan — for short- and medium-term benefit. Down the road, in decades to come, he argues, Hoosiers of the future will pay the price for the 75-year deal in the form of lost toll road revenue that otherwise would have made its way into government coffers.

The position we took on our editorial page was that, while there's nothing inherently wrong with such privatization, 75 years is an awfully long time to obligate Hoosiers to. That point is what this study zeroes in on, too, pointing out that most of the benefits will be used up early with most of the costs coming due later.

Too late to worry about this deal, of course, but the point of debate now is to take a little more care with the next one.

Comments

tim zank
Mon, 12/10/2012 - 12:17pm

It could have been a 300 year lease and it was still a good deal...the toll road never MADE money, the toll road never WOULD make money being state run..Politicians NEVER had or have the will to raise tolls, and maintenance and rebuilding would inevitably cost gazillions..

It was one of the simplest no-brainer deals in history, get a huge chunk of $$$ up front,  off load a non producing assett that requires expensive maintenance and repairs into someone elses's lap...and still retain ultimate ownership later on down the road...even if we never retained ownership it was a no brainer...

harl DeLos
Thu, 12/13/2012 - 1:40pm

The problem with the toll road lease is that it prohibits building other hughways,

The Pennsylvania Tollroad has added lanes, rebuilt plazas, added MOV lanes, added E-Pass, all in the past 3o year and when they talked this year about privatizing it, opponents cited  Imdiana as a good reason not to privatize. Nobody eveb brought the idea up after than!

Christopher Swing
Thu, 12/13/2012 - 3:30pm

Mitch got the money he wanted and will be long gone by the time anyone realizes just how bad a deal this was, so looks like he won this one. He's safely off in the job he bought at Purdue and effectively taken care of for life.

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