# Not just Hoosier State that is in the Red in Indiana



## jis (Sep 24, 2014)

http://www.dailykos.com/story/2014/09/22/1331617/-Privatization-FAIL-Firm-that-runs-Indiana-Toll-Road-files-for-Chapter-11-Bankruptcy?detail=email



> The company that operates the Indiana Toll Road filed for bankruptcy on Sunday, though Indiana Gov. Mike Pence said in a statement Monday drivers of the route through northern Indiana can expect business as usual.
> 
> Debt-ridden ITR Commission Co., a spawn of the Spanish-Australian company Cintra-Macquarie, filed for chapter 11 bankruptcy in U.S. Bankruptcy Court in Chicago in a prepackaged plan to restructure its approximate $6 billion debt.
> 
> The company in 2006 paid $3.8 billion for a 75-year lease of the road that runs between the Illinois and Ohio state lines, but the toll revenue failed to meet company expectations.


Not that this is inability to meet revenue targets to meet operating costs and contract terms. They did not have to spend a penny to build the thing.


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## Bob Dylan (Sep 24, 2014)

Cintra is involved in the Toll Road Melt-down that is happening here in Cen-Tex. Our Governor for Life and the Tx DOT allowed them to sign Sweetheart Contracts that the Tax Payers of Texas will have to pay to the tune of Billions when they default on their Bonds!

The Lawyers and Politicians are cranking up the Meters and the hype as things head South @ a rapid pace!

Meanwhile traffic grows worse daily as the fiddler plays!!!


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## Eric S (Sep 24, 2014)

Some (such as Aaron Renn at the Urbanophile.com) have suggested this shows that the State of Indiana got a fantastic deal here, as opposed to other "privatization" deals (such as Chicago's parking meters).

Not quite sure how I feel about these deals - I tend to be skeptical of privatization of public assets, but if it's going to be done, I'd prefer the public entity get the best deal possible.


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## rickycourtney (Sep 24, 2014)

Toll roads are popular among the libertarian crowd, but very few have proven successful in recent years.

In Southern California the owners of the 73 are applying for refinancing, the owners of the toll lanes on the 91 convinced Orange County to buy them and the owners of the 125 went bankrupt and the toll road was purchased by San Diego County.

The heart of the issue: people are cheap, If there is an alternative road that doesn't charge a toll, people are going to use it, unless they need to save the time or if the alternative road is jammed with traffic


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## Green Maned Lion (Sep 27, 2014)

*shrug* I happily pay tolls. I don't even think about it.


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## Paulus (Sep 27, 2014)

rickycourtney said:


> Toll roads are popular among the libertarian crowd, but very few have proven successful in recent years.
> 
> In Southern California the owners of the 73 are applying for refinancing, the owners of the toll lanes on the 91 convinced Orange County to buy them and the owners of the 125 went bankrupt and the toll road was purchased by San Diego County.


91 was a bad bit of contract writing (they basically had to buy them out in order to do the 241 interchange); they've turned into quite the moneymaker for OCTA however. Even with the bond expenses to purchase it, they're making $18 million a year from it. The 73 was hamstrung by much of the surrounding area being declared land preserves, which nailed traffic from development.


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## OlympianHiawatha (Sep 27, 2014)

Why are these Toll Roads not operated by AMERICAN companies! There is a lot of room for money to leak and spill out between here and some overseas operation. I grew up in Chicago where Toll Roads are the norm and fondly remember Dad grousing about how they are Suckling Pigs that never get full.


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## railiner (Sep 28, 2014)

OlympianHiawatha said:


> Why are these Toll Roads not operated by AMERICAN companies! There is a lot of room for money to leak and spill out between here and some overseas operation. .


Good question.

I wonder why "America's Busline", (Greyhound), is owned by a British company (First Group). And the other major one, Megabus, is also owned by a British Company (Stagecoach). And for that matter, why several American transit systems are operated by Veolia, a French company.

What is going on here?


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## Green Maned Lion (Sep 28, 2014)

We aren't competent enough to do It ourselves.


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## AmtrakBlue (Sep 28, 2014)

Green Maned Lion said:


> We aren't competent enough to do It ourselves.


 And not at a reasonable low cost.


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## Ryan (Sep 28, 2014)

We make it too easy for companies to operate here but held overseas to avoid paying taxes.


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## neroden (Sep 28, 2014)

Ryan is correct. These companies aren't being operated overseas, they're just being owned overseas. The federal government has made it far too easy to do that. (We used to have "must be majority owned by US citizens" rules for a lot of companies, and these were mostly abolished.)


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## jis (Sep 28, 2014)

Airline companies still have to be majority owned by US entities to be registered as a US airline and to hence get cabotage rights in the US. That may be true for ship companies too, but am not sure.

Typically most countries do not permit cabotage by airlines that are not locally registered, and most require it to be locally majority owned to be registered.


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## Paulus (Sep 28, 2014)

jis said:


> Airline companies still have to be majority owned by US entities to be registered as a US airline and to hence get cabotage rights in the US. That may be true for ship companies too, but am not sure.


Yep, to a greater degree even: ships must be US flagged, US built, US owned, and US crewed. For passenger service there are a couple of exceptions that are contingent upon no US carriers serving the market.


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## Ryan (Sep 28, 2014)

Gotta love the Jones Act.


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## railiner (Sep 29, 2014)

The Jones Act applies to ships carrying cargo. The Passenger Vessel Services Act applies to passenger ships.


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## Anderson (Oct 3, 2014)

railiner said:


> The Jones Act applies to ships carrying cargo. The Passenger Vessel Services Act applies to passenger ships.


Both laws have an impact. The PVSA requires US flagging; the Jones Act deals with labor requirements. The net result is to more or less annihilate a line of business which might otherwise exist (crewing ships with all-US crews likely adding quite a bit to the cost of anything...for a handy off-the-top-of-my-head example, a lot of "cruises to nowhere" could likely easily run from the Northeast to Florida and back but for the combined requirements. I suspect the combo is a large part of the reason why the _only_ full-overnight ferries touching the lower 48 to run are the Yarmouth-Portland one and the Alaska-Seattle one.


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