Was selling a Road to Foreigners a Good Idea?

[snowFLAKE]

Ottawa — The government of Spain has warned that it will veto a proposed trade agreement between Canada and the European Union unless the Ontario government allows a Spanish company to raise tolls on the province's Highway 407.

The complex dispute, which involves no fewer than four levels of government, threatens to sour relations not only between Canada and the European Union, but between Prime Minister Paul Martin and Ontario Premier Dalton McGuinty.

(snip)

The 108-kilometre electronic-toll road, stretching across the Greater Toronto Area, was sold by the previous Conservative Ontario government to a consortium dominated by Grupo Ferrovial SA, a Spanish industrial, engineering and financial conglomerate, along with Canadian-based SNC-Lavalin and the Australian Macquarie Infrastructure Group. Editorial comment by me:

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Many drivers of the highway, which carried more than 275,000 cars last month, have complained about the consortium's periodic decisions to raise tolls to generate increased revenue. When the highway's owners announced a further 8 per cent hike in February, Mr. McGuinty's newly elected Liberal government intervened, saying the consortium could not raise tolls without first consulting the provincial government.

More at:

http://www.theglobeandmail.com/servlet/story/RTGAM.20040811.wxibbitson0811/BNStory/National/

[Massacure]

1. Spain has to take that up with the provincial government then

Not the federal one.

[TO Kid]

2. It was an awful deal

But I can't stand the whining about it. There are plenty of other roads in the area, and since lots of people are willing to pay $15 to save 20 minutes of travel time I would hardly say the owners are overcharging.

[snowFLAKE]

3. I can see if there's A Contract that it should be honored

Or is that honoured in Canada?

Anyhow, I can understand how if the government wants to impose tolls to raise money is one thing - but to actually sell the road, and to a foreign group at that - seems to be a step beyond even what the American Anti-Gov't Right-Wingers have been able to accomplish. I am aware that there are a smattering of Private Toll Roads in the USA, but my understanding is that they were Privately Financed from the get-go - they weren't Publically Financed and then Sold Off.

[TO Kid]

4. There is

But it's the subject of several heated disputes and both parties are to blame. Right now, a panel has ruled that the company has the right to set tolls as they see fit. The other major problem is on the collections side- the contract requires the province to refuse licence renewals for vehicles with unpaid tolls, but the clause is not being enforced because the company's billing system is in disarray; although it has improved, there are still a lot of billing errors that are not easily resolved (before the gov't withholds renewals they consortium has to prove the billing system is performing satisfactorily).

[Robert Oak]

5. hitting 1st world

that's the IMF game and the WTO game.

sell off at bargain prices public works (my favorite is water)
and then jack up the prices...

but it's usually a "twisted arm" job by the IMF over debt.

So why Canada would do that same thing is probably an inside job.

[snowFLAKE]

6. Yes, I've heard Canada referred to as "Zaire with Polar Bears"

Maybe you guys could sell the bears, too?

After All, with Global Warming they're not going to be around that much longer anyway - might as well make a few $$'s now.