Kean questions who’s
behind toll road lease plan

02/07/2007

By CHARLES WEBSTER, Staff Writer

TRENTON -- A state Assemblyman wants to know just who is pushing the idea of turning over the state’s toll roads to private investors, after reading a report in Mother Jones magazine showing finance giant Goldman-Sachs, Gov. Jon Corzine’s old company, is pushing the issue of leasing American toll roads.

"Legislators on both sides of the aisle have expressed serious reservations about this proposal," said Sean Kean, R-Monmouth. "With both Republicans and Democrats questioning whether this is a wise move it has been somewhat of a mystery as to why the idea of selling of this critical state asset has become so popular within the Corzine administration."

But the mystery may now be solved.

The report in Mother Jones magazine found that Goldman Sachs has set up an infrastructure investment arm, and has been working closely with Australian-owned Macquarie Infrastructure Group (MIG) and the Spanish construction firm Cintra to leverage lease deals for public roads and building projects for public highways.

The article describes efforts by Goldman Sachs officials to convince government officials around the country of the benefits of privatizing public roads. But the article also points out that Goldman Sachs is playing more than one side of the transaction.

On one end, Goldman Sachs is advising government entities how to proceed with the transaction, the investment firm is also working in tandem with its friends at MIG and Cintra.

On the another side, an account has created by Goldman Sachs to funnel investors’ money into an investment fund with the sole purpose of investing in highway infrastructure projects. More than $3 billion has already been accumulated into the account.

New Jersey is not alone in its exploration of toll road leases to aid in their hunt for more money. In Pennsylvania, Gov. Ed Rendell is exploring the idea of leasing the Pennsylvania Turnpike. In Delaware, Gov. Ruth Ann Miner is exploring leasing the Delaware Turnpike. And in New York, former Gov. George Patacki got the discussion rolling to privatize the New York Thruway before he left office last month. The new governor, Elliot Spitzer won the election on a platform of eliminating all tolls on the thruway.

Ohio, Kansas and other states could also be headed in the same direction.

To-date, Goldman Sachs has been hired by four government entities to advise them on how to proceed with privatizing highways.

In the past five years, Goldman Sachs has helped turn over several highways from state-owned to privately run, including the 99-year lease deal of the 7.8-mile Chicago Skyway in 2005.

Leasing the Turnpike, Parkway or Atlantic City Expressway has brought strong reaction from lawmakers and the general public.

"The Turnpike is ours," proclaimed Assemblyman Bill Baroni, R-Hamilton. "New York has the Statue of Liberty, Philadelphia has the Liberty Bell, and we have the New Jersey Turnpike.

"I’m proud of the Turnpike, even when I have to sit in traffic. We built it, we maintain it, we sit in traffic on it. It’s ours -- period."

Most lawmakers have argued that any deal that would sign over the state’s road roads to private investors needs to come with much needed due diligence.

"There doesn’t seem to be a lot of support for this proposal coming from either party in the legislature right now," Kean said. "And if the idea is being pushed by the Governor’s old colleagues on Wall Street, maybe he should consider a second opinion - one not so ‘invested’ in the outcome."

Charles Webster is the State House reporter for The Trentonian. He can be reached at cwebster4@trentonian.com.

 ©The Trentonian 2007

"Mother Jones magazine found that Goldman Sachs has set up an infrastructure investment arm, and has been working closely with Australian-owned Macquarie Infrastructure Group (MIG) and the Spanish construction firm Cintra to leverage lease deals for public roads and building projects for public highways."

"On one end, Goldman Sachs is advising government entities how to proceed with the transaction . . .

On the another side, an account has created by Goldman Sachs to funnel investors’ money into an investment fund with the sole purpose of investing in highway infrastructure projects."

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