About a year ago, Chicago leased its Skyway toll road to Australia's Macquarie Infrastructure Group for $1.8 billion. Indiana followed suit and leased the Indiana Toll Road for $3.8 billion to Macquarie. However, both the Skyway and Indiana deals may be eclipsed by an even larger privatization.
Last month, New Jersey hired UBS to study a similar plan for the 148-mile long New Jersey Turnpike, which generates $508 million in annual toll revenue, according to a story in the Newark Star-Ledger. The bank is suppose to deliver its reccomendations to Trenton by Oct. 15. How much the Garden State could garner depends on whether it sells a fraction of the road or the whole thing.
If the state sells the whole road, which bisects it from the foot of the George Washington Bridge in the north to the foot of the Delaware Memorial Bridge in the south, it could easily receive $30 billion, the Star-Ledger said. Alternatively, a sale of only 50% of the road could garner $6 billion — basically more than Chicago and Indiana combined.
Because of New Jersey's financial crisis, observers expect any sale to have a short bidding window closing before fiscal 2008 starts on July 1, 2007. New Jersey is reeling under heavy debts. In order to temporarily fix the problem, Democratic Governor John Corzine pushed the Democratically controlled legislature to raise sales taxes in July after shutting down the state government and Atlantic City's casinos. In addition, earlier this month sales tax was added to additional services like digital downloads.
Chicagoans shouldn't fret about their place in the world of privatization. The city could one-up New Jersey with an equally high profile sale of Midway International Airport. —Matthew Wurtzel
See story from the Newark Star-Ledger
See earlier post about Midway from Dealscape
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