Privatization Backlash Motivated by Hostility

A couple of incidents recently highlight how many communities have taken a sharply negative turn when it comes to privatization. A look at the cases in question however, shows that the objections to it appear to be as much ideological as performance based.

In Indiana, a group of seven counties through which the Indiana Toll Road passes want to buy it themselves from the bankrupt operator and its bankers.

The Indiana Toll Road lease was an unambiguous win for the state of Indiana. Was it perfect? Of course not. But those seeking to portray it as a bad decision always have to cite some peripheral defect. They can’t talk about core matters like the roadway condition, which is in better shape than ever and now with electronic toll collection, nor its operations, which are solid. Nor have I ever seen a critical financial analysis that was remotely credible. (One study in an academic journal that got a lot of airplay used ridiculous discount rates in their analysis, including literally 0% in one of their primary scenarios. This is what they are reduced to in trying to undermine the deal’s logic).

 

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