IS IT JUST me, or does the whole notion of a government leasing out public assets sound like typically short-sighted political sleight-of-hand to make incumbent officials look good today while leaving their constituents with nothing to show for it in the future?
I don't mean everyday transactions like an agency leasing out an otherwise unused portion of a government-owned building. I'm talking about assets that some politician wants to "privatize" in exchange for a short-term cash infusion to shore up a budget shortfall.
The current example is Gov. Rendell's idea of leasing the Pennsylvania Turnpikes in exchange for a promise of money pouring into state coffers.
While I don't have an MBA, the only reason I would expect any private company to even consider this is if the asset generates enough revenue (via tolls, rest-stop concessions, etc.) to cover all operating, maintenance and capital improvement costs PLUS permit the company to remit to the state the same or greater net revenue than the state was making before PLUS still have enough left over for the company to make a profit itself.
But that profit represents the state simply giving away money that could otherwise have been retained had the turnpike not been leased!
Is the lease going to permit the private company to raise tolls without limit? If increases are necessary, then the state should just bite the bullet and raise tolls itself - you don't need to sell the whole infrastructure just to raise prices.
Are the people in the private sector just smarter than the public officials appointed to manage the turnpike and able to figure out more efficient ways to run the turnpike? If so, fire the current officials and hire better skilled people - either directly as state employees or as a management company under state contract.
A public asset as important as a major public highway shouldn't be sacrificed in the name of a revenue shell game.