November 21st, 2013 | by NIGEL JAQUISS News | Posted In: Transportation, Legislature, Politics

CRC: Wall Street Journal Details Tolling Debacles

Tolling revenues often fall short of projections

     
Tags:
bridge

Today's Wall Street Journal contains sobering information about just how badly wrong toll-financed projects can go. 

Here's the set-up:


Millions of motorists cross the Foley Beach Express toll bridge every year, many to hit Alabama's beaches. But traffic never reached the 10 million drivers that the bridge's investors were led to believe would be paying tolls in 2012. The result is a familiar scenario to global investors who wagered on U.S. toll roads in the years before the financial crisis—and have since seen many of those bets fail. The Beach Express bridge, in Orange Beach, Ala., served 2.3 million vehicles last year. Its owner, American Roads LLC, couldn't meet debt obligations and filed for Chapter 11 bankruptcy protection this July.

Tolling revenues would be the biggest source of funding for the proposed Oregon-only, $2.8 billion Columbia River Crossing project. Independent analysis has shown CRC boosters have consistently over-estimated likely traffic flows across a new, tolled I-5 bridge. That optimism means the revenues needed to repay more than $1 billion in toll-back borrowing may not materialize

Oregon Department of Transportation officials, acting at the prodding of Gov. John Kitzhaber, are nonetheless moving forward with preparations for the project.

In one of the projects today's WSJ describes, the town of Orange Beach, Ala., has lost money seven years in a row on their bet that the number of vehicles crossing the new bridge would meet financiers' projections.

Traffic predictions made before the recession still look too rosy, says Mr. Kennon, the [Orange Beach] mayor. "Everything back then was pie in the sky," he says. "Nothing was real."

 
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