Private Investors Looking for State Guarantees for Toll Road Projects
According to Bloomberg Businessweek, presently thirty three (33) states allow some form of private ownership of highways under each state’s public-private partnership statutes. Typically, the private investor’s return is tied to the volume of tolls that can be generated by use of the new road or bridge. However, at least eleven (11) projects have had financial problems since 1995 including bankruptcies, restructurings and credit downgrades. In response some private investors are looking for state-guaranteed returns – which means the risk falls on the state’s taxpayers. So far, at least Florida, Illinois, Indiana and the Port Authority of New York and New Jersey have agreed to financing arrangements where the private investment is guaranteed by the state.