ADN: Our view: It's a bad time to seek private investment for public projects

http://www.adn.com/opinion/view/story/793387.html

Published: May 12th, 2009 07:52 PM
Last Modified: May 12th, 2009 07:53 PM

Supporters of the Knik Arm Crossing hope the prospect of turning bridge tolls into profits will draw significant private investment for the controversial project. That looks like a forlorn hope, judging from a report in the May 11 edition of Barron's, a respected national business publication.

The article notes that, in the Lower 48, private buyers have taken a bath on several big investments in transportation projects offered by government owners.

One of those is the Indiana Toll Road, which the state sold for $3.8 billion. It was a great deal for the state, but the private buyers grossly overpaid for their 75-year lease on the highway.

"The Indiana sale looks like a loser," Barron's noted. "Even after a 2008 toll increase, the Indiana Toll Road is deeply in the red."

With the recession, "Toll-road revenue now seems less dependable than it appeared to be just a few years ago," according to Barron's. "For toll-road investors, what had promised to be a pleasant ride on a super-highway has turned into a painful trip."

If Knik Arm supporters hope to fill the funding gap with more government dollars, odds are not good. They couldn't stockpile enough public money to build it when Sen. Ted Stevens was in his Treasury-tapping prime and $140-a-barrel oil was pouring money into state coffers.

Now, prospects for a big hit of government aid are even worse. Times are much tighter, and there's more competition.

"Given the trend away from private money for public roads," Barron's points out, "politicians in cash-strapped states across the country are looking eagerly to Washington to help fund a range of transportation projects."

It was dubious from the get-go to think Alaska could get private financing for a brand new bridge to a sparsely settled area. In the Lower 48, what drew private money were mature projects that have a well-known financial track record and new highways that connect well-developed areas.

Nonetheless, the dream of crossing the arm refuses to die. The state budget for the coming year puts another $1.55 million into the Knik bridge planning effort.

How long it will be before lawmakers recognize the inevitable and spend the state's money on other more urgent, less dreamy transportation priorities?

BOTTOM LINE: Private funding for Knik Arm Crossing? Looks pretty doubtful.