To the Daily:

The Daily’s prescription for Michigan’s crumbling public infrastructure (The road not taken, 11/11/2009) overlooked a significant potential remedy: privatization. Any funding for repairs or mass transit is constrained by the state’s collapsing budget, but privatization offers the government a considerable source of revenue. The lease payments from privatized highways could be invested into roads, bridges or green initiatives.

The idea of private infrastructure isn’t new. In 2005, the city of Chicago leased the Chicago Skyway to private investors for $1.8 billion. The new owners gained control of the toll road for 99 years, and are responsible for maintenance expenses. The owners have an incentive to invest in high-quality materials that create future savings, rather than push pothole repairs from one budget to the next. If road conditions are bad, drivers will commute elsewhere.

Michigan is a major junction for trade with Canada. A 2004 study by the Border Transportation Partnership determined that $13 billion in goods crosses through the Detroit-Windsor border every year. Highways along this trade route could attract significant attention from private capital. The steady traffic tolls would make these investments less risky for investors and more lucrative for the government.

With hundreds of millions of dollars in cash, local roads in Washtenaw County and elsewhere could receive the attention they desperately need. And just as Chicago used a portion of its revenue to pay off debt, Lansing could invest in energy efficient reforms to reduce its carbon footprint and future expenses.

Privatization offers a proven, viable alternative to budget fights and higher taxes. Decades of public monopoly have driven our roads to their current condition, so don’t overlook the power of private capital to put us on a better path.

Alexander Franz
Business junior

Leave a comment

Your email address will not be published.