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Private Mexican toll road in total disrepair, taxpayers bail it out

Link to article here.

At what point do these privatization schemes go from malfeasance to criminal wrongdoing…the chronic fiduciary failures in Mexico make you wonder…

Mexican toll road crumbles, privatization still the talk
Landline Magazine
May 1, 2007

Proponents of highway privatization use efficiency as one of their supporting arguments. But try selling that to motorists and truck drivers in Mexico, who pay up to $70 U.S. for a round trip on one formerly private toll road that is filled with potholes.

The 163-mile, privately built Sun Highway – Autopista del Sol in Spanish – is a “cavalry of cracks, potholes and risks,” according to a recent Mexican newspaper report.

The private road operator walked away from the lease deal prematurely, leaving the government holding a $60 million price tag for repairs, the Los Angeles Times reported

Mexico has spent $14 billion to bail out a number of privatization projects gone awry since the 1990s, the Times reported.

An entire year’s budget for 213,000 miles of highways in Mexico is $2.7 billion, the report stated.

When speaking about the Sun Highway debacle, privatization supporters such as Robert Poole of the Reason Foundation said they believe the contract contained faults, such as a relatively short 10-year duration of the lease. That allowed the private contractor to make profit quickly and relinquish control back to the government without shouldering any responsibility for upgrades.

President Felipe Calderon still believes privatization is the way to go. He recently announced a proposal to increase toll revenue by converting 16 freeways into government-run or private toll roads and contract with private companies to build and operate 24 additional toll roads.

Privatization opponents fear that is a slippery slope.

“What happened there was an example of what can go wrong,” OOIDA Executive Vice President Todd Spencer said. “It tells me that the price was so high on those roads that people wouldn’t use them and they weren’t maintained.”

Spencer said the Mexican toll road debacle is “a classic example of profiteering” while the needs of the public have not been met.

“It was a short-sighted, quick-buck motivation from the start,” Spencer said.

– By David Tanner, staff writer

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