Buying highways

A plan by the Bush administration earlier this year to let a foreign company manage U.S. ports stirred up a storm of controversy. At the same time, foreign companies are buying long-term leases on major toll roads and bridges across the nation with little notice.

About half the states already allow private companies to build and operate roads and bridges. Many of those have changed their laws recently to allow the privatization of highways. In May, Missouri legislators approved a plan to allow a $910 million toll bridge to be built across the Mississippi River between St. Louis and Illinois by a public-private partnership.

Missouri taxpayers currently are repaying hundreds of millions of dollars raised through the issuance of state bonds to pay for highway and bridge repairs across the state. Southeast Missouri has seen its share of these projects, mostly resurfacing of highways that had fallen into disrepair during the years the state had severe budget crunches.

While Missouri's highway bond program has been typical of public roads for decades, the fact remains that it is a costly method of financing projects. Not only do taxpayers have to repay the amount borrowed through such bond sales, they also must pay interest charges that, over the typical 20-year or 30-year life of the bonds can more than double the cost of major projects.

By selling leases to toll roads and bridges, states no longer have to pay for maintenance and receive millions of dollars upfront that can be used, interest-free, for other major needs.

So far such lease purchases have all been made by foreign companies. Now U.S. companies are starting to take a closer look at a financing method that has been used throughout Europe for years.

It's too early to say that a takeover of highways and bridges by private corporations is the best way to finance costly infrastructure, but the financing potential of such deals is certainly attractive enough to warrant serious consideration.