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Opposition to airport privatisation in the US is also expected to be strong, especially if foreign companies are involved.

the real advantage of automatic tolling was that people tended to think tolls were cheaper when they had an electronic tag

08.05.09  Council member: No airport deal

 

Macquarie circles airport in Texas

May 08, 2008

David Nason, THE AUSTRALIAN, New York correspondent

THE Macquarie Group's airport ambitions in the US have spread to Texas, where its infrastructure division is in talks to lease all or part of the Austin-Bergstrom International Airport in the Texas capital, Austin.

A Macquarie spokesman confirmed yesterday that discussions with Austin officials were under way but stressed they were at a "very preliminary stage", with no formal proposal for an ABIA takeover on the table.

According to some projections, leasing ABIA to a private operator could earn the city of Austin $US500 million ($526 million) annually.

The airport play comes as Macquarie and its Spanish toll roads partner Centra await a decision on a proposed 75-year lease for the Pennsylvania Turnpike, one of the US's busiest highways.

At least three consortiums have submitted bids with Pennsylvania Governor Ed Rendell, who is expected to select his preferred operator sometime in the next week.

Mr Rendell wants to channel the lease payments -- possibly as much as $US18 billion over the life of the lease -- into Pennsylvania's ageing highways, bridges and mass transit systems. But he is facing opposition from legislators, voters and his own Turnpike Commission.

Opposition to airport privatisation in the US is also expected to be strong, especially if foreign companies are involved.

Under a Federal Aviation Administration pilot program introduced in 1966, US airports can be exempted from federal administration, but until now only Chicago's Midway Airport has actively pursued privatisation.

The program allows for up to five US airports to be leased to private operators, but the hurdles are many, including approval from the FAA and from 65 per cent of airlines using the airport.

Macquarie, which already operates airports in Sydney, Tokyo, Brussels, Copenhagen and Bristol in England, is one of six companies to have lodged a proposal with Chicago officials.

It now sees a second opportunity in Austin, where the push for privatisation is driven by federal laws that compel the city to spend airport revenues at the airport while other city-operated businesses such as Austin Energy and the Austin Convention Centre return their profits to the city.

Austin city councillor Brewster McCracken told the Austin Business Journal he was opposed to privatising public assets but regarded the airport as a separate issue because it provided no revenue to the city's general fund.

ABIA's total operating revenue for the 2007 fiscal year was $US81.9 million with $US17 million of that going back into the airport's capital fund.

Austin-Bergstrom is a former US Air Force Base 8km outside Austin that was only opened to civilian traffic in 1999, to replace a smaller airport. Last year, it serviced almost 8.9 million passengers, a record.

Globally, the Macquarie Group has some $US200 billion invested in infrastructure and it has targeted the US as its major infrastructure growth area.

And for good reason. In a report last week, the US Urban Land Institute and Ernst & Young said US transportation infrastructure investment was lagging far behind that of most other developed nations and that greater acceptance of public-private partnerships was the only practical answer.

It estimated the annual shortfall in funds for US transportation needs at a staggering $US170 billion, a figure that would rise sharply with the forecast population growth of 90 million over the next 35 years.

The report said vehicle miles travelled in the US had increased 95 per cent since 1980 while road capacity had increased only 3 per cent.

It said 24 per cent of US roads were in poor to mediocre condition and more than 25 per cent of bridges were structurally or functionally deficient.

Macquarie and Cintra already jointly own and operate toll roads in Illinois and Indiana.

Last month, electronic tolling started on the Indiana Toll Road with drivers using the automatic system getting their tolls frozen at current rates until 2016.

A spokesman for the Indiana Toll Road Concession Co, which operates the toll road, said the spirit of the toll freeze was to look after local users.

But in 2006, Macquarie Infrastructure Group chief executive Stephen Allen told investors in New York that the real advantage of automatic tolling was that people tended to think tolls were cheaper when they had an electronic tag.

"I call it the 'mobile phone effect'," Mr Allen said at the time. "How many people out there know the cost of a call on your mobile phone? Well, it's very expensive, I can assure you of that.

"It's the same thing with (electronic) tags. You go through, you hear the beep, you don't think about it. You pay your bill once a month. It's amazing how reaching into that pocket to get that three bucks seems a lot more painful than hearing that beep."

 

 
 
 
 
 
 
 
 
 

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