Private Ownership Of Public Infrastructure… A Doom Of Inequality

It is happening as I feared. Hilary Russ writes… Private money, public projects: More U.S. states doing deals. The movement has started for private funds to own public infrastructure. This is the entrenchment of inequality, which will be very hard to reverse. So why do I fear private ownership of public infrastructure? From what I saw in Chile…

In Chile, private companies own the highways. There are toll booths along the highways. It is almost impossible to get on or off the highway without paying a toll somewhere.

The title of the picture you see below is translated, “Don’t be caught without cash.” It is a list of the toll charges along certain routes of the highways of Chile. At roughly 500 Chilean pesos to the US dollar, here are the fees in $USD.

• Santiago to La Serena in the north is 1126 kilometers/700 miles. The toll charges are $25. This is adding 90 cents to every gallon of gas if your car gets 25 miles/gallon.
• Santiago just to the coast (V region) is 300 kilometers/186 miles. The toll charges are $20. This is adding $2.69 to every gallon of gas if your car gets 25 miles/gallon.
• a relaxing trip from Santiago to Concepcion in the south is 1176 kilometers/730 miles. The toll charges are $30. This is adding $1.02 to every gallon of gas if your car gets 25 miles/gallon.
• You will note some toll booths have special rates that are higher for weekends, all through the night and seasonal peak times, like holidays and summer.

There is more to the story. When a highway in Chile was built, private money was used from politicians, private investors and private investors from Spain. The loan has a term over a number of years upon which it should be paid off, and the tolls should then decrease to just charge the cost of maintenance, not the original cost of construction. Yet, the tolls never decrease, they keep rising as the years pass by. Then even rise more in the summer months when there is more traffic. People have tried to fight this problem in Chile, but to no avail. The private interests own the highways and set the tolls. Case closed.