February 20, 2006
By Theodore Kim
The Indianapolis Star
While the 58-year-old hospice worker from rural Angola is worried that rising tolls will send more trucks onto local roads, she's more concerned that foreign control of the road represents another sign of change in the U.S. economy and even a security threat.
Photo: Rough road: Gov. Mitch Daniels (left) has had a tough time selling his plan to lease the Indiana Toll Road. Wednesday, a protester confronted the governor before a town hall-style meeting in Angola. (Dean Musser Jr. / Associated Press)
"We're the Crossroads of America," she said. "Spain and Australia are going to be in charge of the road that goes across the top of us. What happens if the wrong person starts buying all these (roads) up?"
Greenamyer's concerns, which she vented during a public forum Daniels held last week at an Angola restaurant, offer a window into perhaps the biggest obstacle facing the governor's efforts to lease the Toll Road to Sydney-based Macquarie Infrastructure Group and Madrid-based Cintra.
Like Greenamyer, a lot of Hoosiers seem to view the proposed road deal as part of a loss of control of U.S. businesses and infrastructure to foreign entities, which has led to job losses in Indiana and other Industrial Belt states.
That anxiety is accompanied by a patriotic zeal that in some cases has edged toward intolerance.
The company's interests in the United States and Canada include deals with its Spanish partner, Cintra, as well as a Texas concern. Where Macquarie is doing business in this continent:
• Chicago Skyway: Chicago made news in 2004 when it sold the right to operate about eight miles of toll road, including the Chicago Skyway Toll Bridge, for the next 99 years for $1.83 billion. The buyer was a consortium including Macquarie and Cintra. The city used the bulk of the proceeds to stabilize city finances. The consortium has raised the toll for cars by 50 cents, to $2.50.
• Dulles Greenway: Macquarie last year paid $711 million for 86 percent of the partnership that owns the six-lane, 14-mile Virginia toll road outside Washington, D.C. The Greenway connects Leesburg, Va., to the Dulles Toll Road and Washington Dulles International Airport. There are 51 years remaining in the concession agreement.
• Detroit-Windsor Tunnel: For the past 75 years, the tunnel has been managed by a corporation now owned by a Macquarie fund. The current lease with the city of Detroit runs through 2020, but the Detroit City Council has urged the mayor to extend the agreement.
• 407 Express Toll Route in Canada: The highly automated toll road is operated by Macquarie under a 99-year agreement. After citizen complaints about increasing tolls, a new government in Canada vowed to fight for more control. But so far, various reviews have upheld Macquarie's rights.
• Trans-Texas Corridor: This $6 billion toll road is being built to relieve gridlock between the Dallas-Fort Worth area and San Antonio. In December 2004, Macquarie-Cintra partnered with Zachary Construction of San Antonio to successfully propose building the highway at no cost to taxpayers and to pay $1.2 billion in fees in return for collecting tolls for the next 50 years. Macquarie's interests in North America
RECENT DEVELOPMENTS IN MAJOR MOVES PLAN
• Gov. Mitch Daniels last week faced hostile questioning at public forums in Angola, Elkhart, Crown Point and LaPorte on his plan to lease out the Indiana Toll Road to an overseas consortium for 75 years.
• The Senate Appropriations Committee is expected to vote Thursday on legislation, House Bill 1008, that would allow the governor to make such road-lease deals. The House has passed the bill.
• Should the bill receive committee approval, the full Senate would take it up for amendments and passage.
"The lease has almost become a symbol for all that has gone on over the years," said state Rep. Jeff Espich, R-Uniondale. "It's a fear of the foreign ownership of America. For most Hoosiers, it's not a matter of rational arguments, but fear about what the deal represents."
A lack of enthusiasm about foreign investment is hardly a new reaction in the United States, which has seen an influx of overseas capital since the 1980s as the value of the U.S. dollar has declined. The trend has long spurred debate about whether the nation has begun to lose sway over its own economy.
That tension was laid bare in the mid-1990s by the North American Free Trade Agreement among the United States, Canada and Mexico, a pact that critics charged would weaken the nation.
The Toll Road lease has renewed those fears among some here.
The Senate Appropriations Committee is scheduled to vote Thursday on legislation, House Bill 1008, that would give the governor the ability to lease out state-owned highways and bridges. The House has passed the proposal.
Approval would advance the deal with Macquarie-Cintra, which has offered the state a one-time payment of $3.85 billion for the right to control maintenance, operations and revenues on the Toll Road for 75 years. The governor contends the money would pay for virtually all of Indiana's road needs for at least 10 years.
Yet the plan has proved a tough sell for Daniels, particularly in communities near the Toll Road, such as Angola in the northeastern part of the state. Greenamyer was among a number of citizens at last week's standing-room-only meeting in Angola who objected to the consortium.
"I want to keep what is Indiana's Indiana's," she said.
During a public meeting last week of the Senate Appropriations Committee, Chairman Robert L. Meeks, R-LaGrange, scolded those in attendance for some of their comments.
"We are not picking up this road and moving it to Australia," he said.
A measure of the nationalism, however, has been fed by legislators themselves.
House lawmakers, in a unanimous vote earlier this month, added a requirement to the Toll Road proposal that the consortium display a U.S. flag at each toll booth.
House Minority Leader B. Patrick Bauer, D-South Bend, who has spearheaded opposition to the lease, said he is more concerned with the merits of privatization than the nationality of the consortium.
Still, he said he believed the firms would compromise the security of an interstate system that was conceived in the 1950s by President Dwight D. Eisenhower as a means to move weapons, troops and supplies for the military from coast to coast.
"There is a security question of having interstate roads in foreign hands," Bauer said.
A relatively new concept in the United States, privately operated roads are more common abroad, particularly in Europe. All told, Macquarie and Cintra manage about 1,400 miles of road in at least six countries, including the United States.
More domestic firms are expected to enter the road-management business as the practice becomes more common here.
But as it stands, only one of the four partnerships to bid on the Toll Road had domestic ties, Daniels administration officials said. The names of the losing bidders have yet to be made public.
"I think if this were an American consortium, the opposition would have a lot less to talk about," Espich said. "But the opposition has played on the fears and anger of foreign ownership."
The consortium has been reluctant to speak publicly about the lease deal because it is not final. A consortium spokesman declined to comment.
Daniels himself has countered the criticism by marketing the deal as the " jobs bill of a generation," one that would spur growth in construction and other industries. He has compared the consortium to two Japanese automakers based in Indiana, Toyota and Subaru, which combined have generated more than 7,000 jobs.
Those automakers are among 436 Hoosier companies -- with combined employment of more than 100,000 -- that are at least partially foreign-owned, according to the Indiana Chamber of Commerce.
At the Angola meeting, the governor said it would be a "tragic mistake" for the state to reject such overseas ventures.
"We would be a much poorer state than we are today. We would be a dust bowl," he told the gathering of about 200 people.
"I'm not concerned about where their mailbox is," Daniels said. "I'm concerned about where they file their (income tax) W-2s."
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