Wingfoot
August 5th, 2008, 08:53 AM
Roads, airports on the block as budgets tighten
Fri Aug 1, 2008 12:37pm EDT
NEW YORK (Reuters) (http://www.reuters.com/article/reutersEdge/idUSN0134060620080801?sp=true) - Cash-strapped U.S. state and city governments are likely to sell or lease more highways, bridges, airports and other public assets to foreign and Wall Street investors desperate for stable returns after being frazzled by the credit crisis.
The trend is set to pick up speed given worsening budget deficits in state capitals and city halls nationwide.
This trend is welcomed by Wall Street. A high-water mark came in May, 2008, when Spain's Abertis Infraestructuras SA and Citigroup Inc agreed to pay $12.8 billion to lease the Pennsylvania Turnpike for 75 years.
Other transactions have included the $1.8 billion lease of the Chicago Skyway toll road bridge in 2005, and a $3.8 billion lease of the Indiana Toll Road the next year. Chicago Mayor Richard Daley is preparing to lease Midway Airport this year.
Schmidt, the Mayer Brown partner, said if Chicago's Midway Airport transaction succeeds, other airports could also go private. Privatizing U.S. infrastructure could bring the value of roads, bridges and airports to half a trillion dollars.
Fri Aug 1, 2008 12:37pm EDT
NEW YORK (Reuters) (http://www.reuters.com/article/reutersEdge/idUSN0134060620080801?sp=true) - Cash-strapped U.S. state and city governments are likely to sell or lease more highways, bridges, airports and other public assets to foreign and Wall Street investors desperate for stable returns after being frazzled by the credit crisis.
The trend is set to pick up speed given worsening budget deficits in state capitals and city halls nationwide.
This trend is welcomed by Wall Street. A high-water mark came in May, 2008, when Spain's Abertis Infraestructuras SA and Citigroup Inc agreed to pay $12.8 billion to lease the Pennsylvania Turnpike for 75 years.
Other transactions have included the $1.8 billion lease of the Chicago Skyway toll road bridge in 2005, and a $3.8 billion lease of the Indiana Toll Road the next year. Chicago Mayor Richard Daley is preparing to lease Midway Airport this year.
Schmidt, the Mayer Brown partner, said if Chicago's Midway Airport transaction succeeds, other airports could also go private. Privatizing U.S. infrastructure could bring the value of roads, bridges and airports to half a trillion dollars.