The Denver Post house editorial this morning supports the Regional Transportation District plan for public-private partnerships for the new light rail infrastructure construction.
With skyrocketing gasoline prices
and mounting worries about global climate change, the need for RTD's FasTracks
rapid transit plan becomes more obvious every day.
There is nothing in this opening sentence that resembles the truth. First, light rail creates more carbon emissions per passenger mile travelled than automobiles do. Second, Regional Transportation District busses use fuel, and the proposed commuter rail lines to Boulder and Thornton will use diesel power as well. Finally, even though RTD plans to electrify the Gold and DIA light rail lines, electricity costs are skyrocketing due to renewable energy mandates for Xcel and other electric companies in the name of fighting “climate change.”
Rising prices on such basic items
as steel and concrete have helped boost the price tag for FasTracks to $6.1
billion.
Meanwhile, the soaring cost of fuel
has not only increased RTD's operating cost for the diesel fuel that powers
most of its existing bus fleet, it's also reduced revenue from the 1 percent
sales tax that is the agency's key means of support.
Gasoline isn't subject to the general sales tax, so if a motorist's weekly gas bill doubles to $100 a week, that's $50 less that same resident has for optional spending, like dining out, that would be taxable.
Is the Post advocating extra energy exploration to lower gas prices? Does this mean that high energy costs are bad for the environment because RTD sales tax revenue fell? The Post remains silent on those questions and takes the editorial in a different direction.
But inflation poses an even more
direct threat to FasTracks. RTD's enabling legislation limits it to paying a
total of $7.2 billion in principal and interest for FasTracks.
Thus, simply borrowing more money
and stretching out bond repayments over a longer period isn't a practical way
to handling rising construction costs.
However, money invested by private firms in the project doesn't count against RTD's borrowing limit and operating payments to private partners don't count as interest. Additionally, private firms can benefit from investment tax credits that RTD can't use.
A private concessionaire could come in, build the lines, and run them for a period of years if RTD guarantees a profit stream. However, that would require RTD to keep fares in line with operating costs, or the Regional Transportation District will have to ask voters or the legislature for fares. And, this will still not change the fact that the excess capacity of the rail lines cannot be sold to private individuals or companies as one can with bus rapid transit lanes.
Finally, from the standpoint of foreign investors such as Brisa Auto-Estradas, operators of the Northwest Parkway, there's the embarrassing fact that runaway federal budget deficits and a worsening balance of trade have combined to make the U.S. dollar virtually a Third World currency. Foreign investors with access to hard currencies like the Euro or pound can thus buy or build U.S. infrastructure projects at bargain rates.
Overall, the idea to use private companies for constructing the RTD light rail lines has merit. Perhaps RTD should sell all of its operations to private companies, as they tend to be more budget-conscious than government-run organizations. In any event, this Denver Post editorial did little to advance this for RTD by using economically illiterate arguments for this program.
by Civil Sense
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