June 15, 2006

Skeptics question sale of Ind. toll road

Australian-Spanish team pays $3.8B for system as states explore the idea of privatizing interstates.

Amy Goldstein / Washington Post

ELKHART, Ind. -- Its official state motto is "the crossroads of America." Yet Indiana is about to turn over its entire toll road for the next 75 years to two foreign companies, making it more expensive to drive.

The decision to hand the Indiana Toll Road to an Australian and Spanish team for $3.8 billion at the end of this month has blown up into one of the biggest brawls here in a generation. It has unsettled the state's politics in the months before the November elections, pitting a governor who was President Bush's first budget director against the people of northern Indiana, which the highway passes through.

The decision also places Indiana at the leading edge of a nascent trend in which states and local governments are exploring the idea of privatizing parts of the United States' prized interstate highway system. The idea goes beyond projects, such as Northern Virginia's Dulles Greenway, in which states have turned to private companies to build or widen toll roads. Now, they are considering selling or leasing some of the best-known and most-traveled routes across America.

A half-century after President Dwight Eisenhower persuaded the nation to build the interstate highway system to protect its security, the allure of privatization is a rethinking of the relationship between the government and its roads. It reverses the view of highways as a public responsibility, ingrained since the first half of the 19th century, when states took over roads and bridges that went bankrupt in private hands.

The Bush administration advocates the new view. "We are like a poker game," Transportation Secretary Norman Mineta said. "We are inviting more people to the " Such eagerness for private table and saying, 'Bring money when you come.' investment stems from the financial strains on an overburdened and decaying highway system at a time when the White House and the Republican-controlled Congress want to curb domestic spending.

Most significantly, money from federal and state gasoline taxes that pay for roads are falling further behind the need, with no political appetite in an era of record gas prices to increase the rates. According to U.S. projections, the part of the federal Highway Trust Fund devoted to roads is to run out of money for the first time in its history in 2009.

Still, skepticism abounds: Will companies take good care of highways? Will toll roads become too expensive to drive? Will investors pluck profitable routes, leaving others to crumble? What will happen to public toll road workers?