One of the key tenants provided by Virginia for the Commonwealth’s 50 to 73 year long Public-Private Partnership (P3) tolling contracts with private companies has been the private partner assumes the financial risk, not the taxpayers. Suddenly Transurban is signaling they want federal taxpayer relief. Tolling companies were eager to take the keys to the Commonwealth’s highways in exchange for unlimited toll rates that they control for 73 years (Capital Beltway) or 50 years (Interstate I-66, west of the beltway).
The Commonwealth granted private toll companies, Transurban of Australia, and a Spanish/French consortium of Cintra and Meridiam to set toll rates, and even granted exclusive non-compete agreements to prevent expansion of U.S. Route 1, the Occoquan Bridge, the “free” lanes of I-95/I-495 for 73 years, plus block any expansion of the Orange Line. This setup assures toll money for Transurban/Cintra and assures incentivized congestion for everyone else. Transurban has been quite pleased with that arrangement…until now. Traffic has been reduced to the coronavirus, and suddenly Transurban doesn’t like holding their end of the bargain they signed with the Commonwealth…and the Federal Government that backs Transurban and Cintra loans.
Transurban and Cintra financed their big toll schemes with federal government backed Transportation Infrastructure Finance and Innovation Act (TIFIA) loans. At the time the “comprehensive agreements” and loans were signed, the talking points for both the big toll companies and Virginia transportation officials included the private companies were assuming the risk, not taxpayers. In other words, in exchange for two human driver lifetimes of high priced tolls, non-compete agreements, and a clause that requires taxpayers to pay Transurban when over 35% of vehicles ride free in HOV mode, the one upside is that the taxpayers would not be on the hook for Transurban’s and Cintra’s project. Big tollers would take the risk and they would get the toll money.
But now the big tollers want these taxpayer subsidized loans to have the interest rates forgiven, because they don’t like the current ridership numbers. In exchange for socializing the risk with taxpayers, they also would like to keep all of the toll money too. So much for the private companies shouldering the risk.
Here is what Jennifer Aument, the President of Transurban’s local operations here in the United States said recently:
For example, with interest rates lowered, current TIFIA borrowers could unlock billions of dollars to reinvest by refinancing their TIFIA rates to the current interest rate.
Translation: Transurban wants to recoup billions of interest dollars they committed to the federal government while they told everyone how they would assume the risk of the tolling project in exchange for federal loans and toll revenue.
Let us never forget that Transurban cares so much about Virginians, that Transurban shook down Virginia drivers with thousands of dollars (each) of trumped up administration fees using the shoes of the Commonwealth until a Fairfax Circuit Court judge had to step in a few years ago and remind Transurban of the differences between criminal and civil law procedure.
Should Transurban, Cintra, and Meridiam get taxpayer subsidized long term private loan relief from the agreements they made, while retaining the right to charge unlimited tolls for five to seven decades? So far, nobody is talking about any long term toll relief for public citizens, just special relief for foreign big toll companies that are crying the blues that they can’t charge high prices while Virginians are affected by the public health situation. Let your Congress representatives know where you stand.