By Peter Galuszka
This just in from Australia! Transurban, the Aussie company that owns public-private partnered Pocahontas Parkway near Richmond, is considering selling the toll road because it has become a White Kangaroo.
If so, this is incredibly bad news for PPP3 advocates everywhere, including various moderates and conservatives such as Gov. Robert F. McDonnell and his transportation chief Sean Connaughton.
The Australian newspaper reports Aug. 7 that Transurban, a master of PPP3 deals, is considering unloading the eastern Henrico property because it has become a financial disaster that has led to a 51 percent slide in its annual profit.
Reports the newspaper: “The Pocahontas Parkway in the southern part of Virginia was constructed in anticipation of new housing developments that never materialized due to the global financial crisis.”
In June, the firm wrote down the value of the parkway to zero and took a $138.1 million charge. The newspaper says that the Virginia project is a “blight” on its other Australian entities.
The Parkway that connects I-95 with I-295 has had a history of problems. During the years of former Gov. Mark Warner its lagging tolls and debt almost cost Virginia its Triple-A bond rating. Warner put together a quick deal to unload the property.
Other than helping get traffic to Richmond International Airport, the multi-lane loan seems lonely. It extends through farmlands and pine forests that had been anticipated subdivisions and shopping malls before the 2007 real estate crisis hit.
The larger issue is that public private partnerships of the Pocahontas type are considered panaceas for states with no money to spend on big, new roads. Popular with both political parties, McDonnell has time and again tried to excite interest in PPP3 deals for his pet projects such as a superhighway to replace US 460 in southeast Virginia and tap expected new port cargo traffic when the Panama Canal expansion is completed.
The Aussies, however, are sounding a loud warning. Call it “Thunder from Down Under.”