The Associated Press ran a story on the growing practice of foreign companies purchasing U.S. toll roads and bridges. They exposed problems with this approach, one of which is states selling infrastructure for money. It’s poor financial planning to sell a capital asset to fund operating expenses. How many people regularly sell their house to pay for food, electricity, and cable? They don’t unless they are in a real bind.
What the story missed is domestic companies’ interest in owning government infrastructure. Zachary Construction in San Antonio is partnering with a Spanish company on Texas toll roads. The famously politically connected investment, the Carlyle Group announced their intention of entering the infrastructure business just months ago. Might they want some of that $16 billion in the federal highway fund?
My guess is President Bush will find a way for his friends at Carlyle to make a healthy, low risk profit off Uncle Sam. Texas Governor Rick Perry already opened the state pocketbook for a Carlyle subsidiary, Vought Aircraft Industries. After giving the company $35 million in state and $5.5 million in local subsidies, Vought announced its newest plant would be in South Carolina, not Texas. The latest analysis reveals Vought may be off the hook for paying back any of the job incentive grant.
Why shouldn’t the ex.-Governor, now serving as President of the United States open his pocketbook for another Carlyle sub? After all Bush’s father and numerous Republican friends have been on the payroll. Watch to see what federal work goes their way, roads, bridges, managed care agreements for people on Medicare and Medicaid…..