Monday, 25 April 2011

Florida - toll roads for "sale" between authorities

Although in 2007 the Florida State Legislature passed legislation allowing state owned toll roads to be leased out, politics has prevented any serious moves to privatisation.  Instead, a rather odd series of efforts by the state and local authorities to take over various toll roads have eventuated.   Tampa Bay Online reports that the State is seeking to take over three regional toll road authorities including the Tampa-Hillsborough Expressway Authority.  By contrast, the Tampa-Hillsborough, Orlando-Orange County and Miami-Dade authorities are all seeking to take over state toll roads in THEIR areas, paying off the state to get local control.  It is a form of nationalisation - well on the state and local levels.  The state argues it could get economies of scale by having a single state wide toll road enterprise, but local politicians and authorities see them being able to get better control if they looked after toll roads in their areas.  

In both cases, those involved believe it would be a good investment, so there are no major fiscal hurdles (although a lot of borrowing would be needed).  That alone indicates the soundness of the toll roads as investments.  However, what it doesn't indicate is whether or how private sector and commercial imperatives might be used to improve the management of these roads.  Whilst other states and countries consider significant private sector involvement in their toll roads, Florida is looking at a strange blend of government ownership to gain efficiencies.  It is not impossible for government owned entities to operate very efficiently and be responsive to users, but it requires arms-length structures that are away from politics and the ability and freedom for management to do what is required to operate in a business like way.

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