What was it that Mitch promised us all during his campaign? Something about dealing with Indiana Companies and getting rid of "outsourcing" contracts.
Yet Our _ _ _ _ _ Mitch is now touting the largest and longest outsourcing contract... err... "lease" in US history to a consortium from Spain and Australia.
Indiana offered $3.8 billion for Toll Road - indystar.com
Some simple math... annual revenues of $90 million x 75 years = $6.750 Billion. So if revenues remain flat over 75 years, that consortium will make $2.95 billion. I'll let me accounting friends out there pound the calculator... but even a 5% annual growth in revenues bumps those numbers astronomically. There is a reason that consortium is willing to part with 3.8 billion today.
And I'm so glad that Mitch is willing to give up 75 years of future revenues for a one time payout. The only thing that could have made this better was if the Consortium was from Iran and North Korea. BRILLIANT!
Don't blame me... I didn't vote for the joker. Guess I will need to retire to Mexico... or Spain... or Australia.
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3 comments:
In the Spring of 2005, the president of Kyrgyzstan was ousted. One of the biggest complaints against him was that he had organized a deal to sell off a chunk of Kyrgyz land to China.
His idea was to take the one-time sum of money and spend it around the country to shore up his reputation (and, of course, to pocket some of it.) But the Kyrgyz people wouldn't stand for it. They recognized the fault in mortgaging the future.
Will Hoosiers have as much wisdom?
$3.85 billion dollars seems like a lot of money when you think of it as cash piled up on a table. But it is less impressive when you say, "This is all the state is going to get for the rest of my life and my children's lives. Let take it a spend it as fast as we can!"
Steve rightly points out that the state could draw much more than $3.85 billion by retaining the toll road. The current present value of the deal is less than the value of the future revenue stream.
Major Moves is selfish and stupid.
Thank you AZ. I thought maybe I was missing something obvious. Your Kyrgyz example is perfect. I can only hope Hoosiers see through this.
Good call, Steve.
Let's put our roads in the hands of foreign corporations. Great idea!
Yay for our "man" Mitch.
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