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    Who are the NERD fund donors Mr Snyder?

    Raise the curtain.

    Just the Facts, Please

    By The Wizard of Laws, Section News
    Posted on Fri Feb 11, 2011 at 10:06:26 AM EST
    Tags: Ambassador, Blue Water Bridge, Bridge, credits, Detroit, DRIC, federal, government, highway, MDOT, private, public, tolls, traffic, Tunnel, Windsor (all tags)

    Cross-posted in The Wizard of Laws

    To hear MDOT talk, the proposed Detroit River International Crossing (DRIC) is not so much a bridge as a yellow brick road to eternal prosperity.  This image appeals to your Wizard, of course, but I am more concerned about whether the image is based in reality or merely the result of a bump on the head.  Why the DRIC instead of a private second span put up by the Ambassador Bridge (AB) people?

    The case for DRIC goes something like this:  (1) we need a second bridge to accommodate the tremendous growth in traffic we will see in the future, (2) the good witch of the north (Canada, for those of you not following my Oz analogy) has offered us a $550 million loan to get started, and (3) we can turn that $550 million into another $2 billion from the federal government to put toward our roads.  Ultimately, the DRIC is supposed to generate thousands and thousands of jobs and enable our manufacturing and agriculture industries to thrive.  The Canadian loan, the cost of the project, and all future costs would be paid or repaid out of bridge tolls.

    Let's set aside the "jobs" and "thriving industries" justifications for now.  Whether the bridge is built through a public-private partnership or by the AB folks, those benefits should still accrue, so those justifications favor neither approach.  And, if we need a second bridge, we need a second bridge, regardless of who builds it.

    So, based solely on media coverage (a dicey proposition, I know), the case for DRIC appears to boil down to the fact that Canada has offered its loan for a public bridge, and we can use that loan to leverage federal highway funds.  Let's look at these issues in some more detail:

    1.  Investments by the AB people generate what are called "toll credits" that can be used to leverage federal highway funds.  Has this been done?  How much is available?  Would the cost of a new, private bridge be a basis for further federal matching funds?  I have heard that anywhere from $250-500 million is available right now and, based on the 4-to-1 ratio used by MDOT and the feds, would generate $1-2 billion, but these credits are not being utilized.  If so, why not?  Is the MDOT downplaying that option in order to make the Canadian loan appear more attractive?

    2.  Will a public bridge truly be self-sustaining in terms of cost and annual maintenance?  If we build a $3 billion public bridge and budget 2 percent for annual maintenance, that's $60 million per year.  Will the tolls really cover that and the loan to Canada and the repayment of the bonds used to finance the construction?  What if they don't?  In 2009, 6.5 million cars and trucks went across the Ambassador Bridge.  Let's say that traffic gets split evenly between the AB and the DRIC.  With 3.25 million vehicles, the DRIC would have to charge a toll of $18.46 just for maintenance, and much more to repay Canada and the bondholders.  Is that competitive?  

    3.  We need to examine MDOT's traffic projections carefully.  According to the Bridge and Tunnel Operators Association, actual traffic across the AB has declined over 47 percent since 1999.  During that same period, Detroit-Windsor Tunnel traffic is down over 58 percent, and Blue Water Bridge traffic is down over 19 percent.

    4.  The ramps and plazas for the second AB span are already in, and I understand that it will take about $500 million to finish the job -- all private money, with no taxpayer risk.  Why isn't this a better option?

    Look, I'm the first to point out that it's Wizard of Laws, not Wizard of Transportation or Accounting.  But before we rush into a public-private "partnership" built on a loan from another country, shouldn't we have the answers to some of these questions?

    < Kurt Meister: Economic and Freedom Jihadist with a Law Degree | A Friday Divertere: Deception Was My Job >

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    More facts. (none / 0) (#1)
    by LookingforReagan on Fri Feb 11, 2011 at 12:10:47 PM EST
    I have been discussing this issue with a freind of mine from Essex, ON. He points out that Matty Moroun has been trying to build a second span across the river using his own money. Neither the Canadian government or the folks in Michigan have warmed up to this proposal. The proposed span would be totally funded by private sector money. No taxpayer dollars would be needed or ask for. It would be operated and maintained from private sector monies raised from tolls charged for using the bridge. Now why in hell with this as a more attractive option would the elected classes in both countries want to fund a project of this nature and levy more cost onto the backs of taxpayers in the midst of an economic disaster gifted to us by the Czarina and Dear Leader? Other then the need to control everything and been seen by the Sheeple as the grand provider of all things great and good I can't think of any good reason or even any half-assed reasons. The only one that comes to mind is it must have something to do with those signs posted outside of buildings where the elected elite's go to congregate. The ones that only they can see or read. You know the ones that say "Check Common Sense at the door before entering."

    Four words, LookingforReagan... (none / 0) (#2)
    by Corinthian Scales on Fri Feb 11, 2011 at 12:46:28 PM EST
    Central Planning & NAFTA Superhighway

    Start here at about 27 seconds in:


    Q: What does Ron Paul want to do to fight the prospect of a North American Union and an Amero?

    Rand Paul: Well I think publicizing it is the first thing, publicizing that it's going on. Trying to get the legislature to stop it, through official acts of Congress. You know any time he talks about it, though, the media tries to make fun of him as if it doesn't exist. But I think in Montana, your state legislature has talked about the North American Union. Texas has had several votes about the corridor, they just call it a different name, they call it the trans-Texas corridor.

    Q: It comes right through here.

    Rand Paul: Yeah, it's the same thing. It's gonna go up through Texas, I guess, all the way to Montana. So, it's a real thing, and when you talk about it, the thing you just have to be aware of is that, if you talk about it like it's a conspiracy, they'll paint you as a nut. It's not a conspiracy, they're out in the open about it. I saw the YouTube of Vincente Fox talking about the Amero. So, it's not a secret. now it may not be [inaudible] tomorrow, but it took 'em 20 or 30 years to get the Euro, and they had to push people kicking and screaming into the Euro. But I guarantee you it's one of their long term goals to have one sort of borderless, mass continent.

    Think it's bullsh!t?

    Poof! PFM!

    Global Nationalism.

    It's all just playing wordsmith with ideology that been here in America for over a century...

    I was under the impression that... (none / 0) (#3)
    by KG One on Fri Feb 11, 2011 at 01:58:20 PM EST
    ...the ramps and plazas were already built?

    That's why Judge Edwards threw a hissy-fit, and had Dan Stamper arrested for contempt until they began to tear them down.

    You bring up a lot of good points, especially about projected usage.

    Pay no attention to the man behind the curtain?

    Yes LookingforReagan (none / 0) (#4)
    by BruceB on Sat Feb 12, 2011 at 07:01:20 PM EST
    I have come to the same conclusion.  Someone in the private sector is willing to put up the money and put up with the headaches of constructing the thing but two Federal Gvt's want to use the people's money to build it!  Why?  Do you suppose the reason the Gvt's want to throw the people's money at this thing is so that the people won't have their own money to use for something that the people find useful and want to buy.  Something like feeding their families, putting a roof over their heads or maybe sending their kids to school.  This is another boondoggle.  Another money pit.  Whatever happened to, "we can't afford it!"  I have used that line many times over the years and rarely regretted it.  

    I would really like to (none / 0) (#5)
    by JGillman on Sat Feb 12, 2011 at 08:00:58 PM EST
    get an opinion from Mr Moroun.  I understand he is not prone to talk to press, but maybe a call to my business line for a friendly chat would be ok?

    Mr Maroun is in (none / 0) (#7)
    by LookingforReagan on Sun Feb 13, 2011 at 11:21:02 AM EST
    For a billion of his own money. He has committed that amount from his personel wealth to the project. Now I realize in this day of Obamanomics and trillion dollar deficits as far as the eye can see a billion dollars is a trivial amount. But at least it won't come from public coffers which means out pockets. This is the ideals that Capitalism is based on. The individual willing to take a risk for a profit later on. They can't use the excuse that this private enterprise is devoid of experience in this area. There is something more sinister at work and our elected elite's need to give us some clear, honest answers. Maybe we need to start with the Nerd. Put him on the spot about this and that stupid ass high speed rail system that has been proposed for Michigan. Another dumb idea with no basis in fact or need.

    Name Change: New International Trade Crossing (none / 0) (#10)
    by Corinthian Scales on Mon Feb 14, 2011 at 09:33:36 PM EST
    DRIC is now the NITC

    Different shoe, same stink.

    BTW - Check out this interview with House Transportation Committee Chair, Rep. Paul Opsommer.

    PO: I don't think Canada knows itself if the offer will ultimately be real, but I do know 100% now it is not a gift. It has to be paid back. We had so much political theater with that last year, with Governor Granholm coming in all out of breath with the fax from Canada in her hand, hot of the press. It came across so staged that it was hard not to be immediately suspicious of it. I still believe that we will see some Canadian private partner at the end of the day that will financially benefit from the DRIC, whether it is one of their pension funds or public benefit corporations as an operator or major investor.

    If that is the case, and the Canadian government can benefit from the profits of the bridge for the next century or more, then a $550 million loan up front would still be small potatoes and in their best interests. They view the loan then as an inducement for us and as icing on the cake so to speak, and now they want to try to put icing on top of the icing. For example, some are now saying we can use the $550 million to match federal funds. But that is thus far just a verbal commitment. I want to be able to see that in writing from the feds. So far I have not been able to get that from MDOT.

    And on top of that there are other ways we can address a shortfall in federal match dollars, so while I view that as nice I'm not going to let that drive the discussion. Michigan always has gotten less road dollars in comparison to other states, so in many ways this match money issue is something they should be giving us anyways.

    At the end of the day this is a money issue, and this is a taxpayer protection issue, but it is not a budget issue for this cycle, so I don't see a need to get this all addressed by May 31st like some would want. My main goal is making sure that if toll revenue is not as high as anticipated that we don't have to pay for that with taxpayer dollars. And if toll revenue is not high enough and it goes bankrupt, I want to make sure some foreign bank or pension fund doesn't end up as the owner of a Michigan bridge.

    It may just be me, but some of the stonewalling Rep. Opsommer is receiving from MDOT leads me to believe that this whole DRIC/NITC fiasco has a lot more to do with the Canadian government in cahoots with Canadian Pacific in leveraging the expansion of the Canadian preferred method of rail transportation then it has anything to do with building bridges.  If one looks at page 11 here, then overlays this, it kinda makes a lot of sense for the Canucks to loan-shark Michigan Taxpayers the $550 large.  With the DIFT sitting right there, their $550 is more or less a refunded entry fee for getting their choo-choo crossing in play.

    I also would be led to believe that'd go a long way towards explain why the Canadian government is unwilling to do business with Mr. Moroun.  

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