Thoughts and Opinions On Today's Important Issues

Friday, April 30, 2010

Michigan's Third World Status; Accepts Canada's Foreign Aid

She was so proud of herself too. As if it was a huge accomplishment. Phone calls back and forth to Canada to salvage Michigan.

Governor Granholm's legacy has been fixed for all time. She has confirmed that she has turned Michigan into a have-not State during her two terms as Governor as Canada's bribe errrr offer demonstrates so clearly. There is no money in the State so it has to go begging. Imagine the signal to investors and P3 operators.

Negotiate whatever deal you want. Michigan cannot afford to say no. Just threaten to walk away and Michigan folds. That is what Transport Canada's Minister Baird is telling the world. As did MDOT's Steudle during his presentation when he showed he would cave in to the demands of the Wall Street boys on a P3 deal.

And then maybe the Governor hopes for a Supreme Court appointment next as her reward. Perhaps she can do to the Court what she did to Michigan.

As I do my income taxes tonight to meet the April 30 deadline, I am so pleased to learn that some of it is going to help out Michiganders. I did not know that our economy was so sound under Prime Minister Harper that we can afford to do so. I do hope that people in the State will show me the proper courtesy after my good deed of the day when I visit there.

It was all pure Hollywood in Lansing.

Just as MDOT’s Captain Kirk was starting his presentation on the P3 legislation and the DRIC Bridge, in came, breathless, Canadian born Michigan Governor Granholm. Catching her breath from running into the House Committee room with the great news, she read out the letter from Canada about its $550M bribe errrr offer to Michigan to try to beat the Ambassador Bridge Company. Or rather, to force the Owner of the Bridge to sell cheaply to Canada or else. After all, Prime Minister Harper did issue his secret mandate letter to buy the Bridge. He cannot let some mere transport truck owner beat him after all.

It was great theatrics but it merely confirmed Canada’s opinion of Michigan that it is a Third World State without any money. In fact, the US is not much better off because the actual amount of money that Canada will pay is $550 million which covers both the State and the US Federal contributions for transportation connections for the DRIC project.

Has anybody figured out that this is about twice the cost of the Ambassador Gateway project? That project itself could handle most of the border traffic in the forseeableable future even without a second bridge as confirmed by the US DRIC consultant.

I was pretty accurate a couple days ago when I did that chart about how the P3 legislation would lead to a takeover of the border crossing by Canada. I must admit that I did not believe that Canada would be a direct investor but rather would be a guarantor. I did not believe that Canada wanted to directly confront the US Congress as would happen since this is now a Dubai ports issue.

In any event, it does not matter. The half a billion dollar loan to the Americans will not be able to be paid off by toll revenues because they are too small given the low traffic. It means that almost from day one there will be a default and Canada will be able to take over the new crossing, if in fact one is ever built.

Michiganders, don’t flatter yourselves. That is the only reason Canada has any interest in your State.

I really wanted to do a BLOG on the Michigan House Hearings on the P3 legislation but obviously events have overcome everything. However there were a couple of interesting comments made during the Hearings.

Everybody talked Jobs, Jobs, Jobs. Fortunately one of the Republican House members did mention that those jobs would be created by the Ambassador Bridge project as well although the pro-DRICites did not mention it.

And Representative Young does need to be concerned about Community Benefits because MDOT has no power to offer any as they admitted. $1.9M for homes…..what’s that, housing for a mere fraction of the almost 300 families who will be displaced by DRIC. Pathetic. No one cared about Delray before and MDOT does not care about Delray now other than to shut up residents.

It was fascinating to hear about all the private parties in support of the DRIC project but I did not hear one of them say that they would be particularly interested in helping to pay for it. Specifically, I saw that the Canadian truckers’ head honcho David Bradley was there as part of a group from Canada but for some reason he forgot to tell the members of the House how he whined and cried because his members could not afford to pay the recent doubling of the Blue Water Bridge tolls. I guess he just takes it as a given that the State taxpayers will subsidize DRIC tolls as it did for years in Sarnia/Port Huron. Heaven forbid that users should pay the cost

I again heard this nonsense about Buffalo, and I am disappointed that MDOT did not stand up and admit that this was a myth that they had destroyed a long time ago

Poor old Mayor Francis of Windsor. His dream was shattered. The DRIC bridge apparently is going to help out Aerotropolis in Detroit. Accordingly, the need for an expansion of Windsor Airport is not required now. Look at all the money that can be saved including not upgrading our E C Row Expressway. Maybe he should not have been so fast in supporting DRIC to Windsor’s detriment now it seems

The Wilbur Smith phony traffic numbers based on phony numbers from a Canadian traffic numbers report were used again to justify DRIC. The WSA report was NOT an investment grade traffic survey so MDOT is in breach of what it was to deliver to the House in my opinion.

Just so you know we will probably get one gigantic P3 deal to cover roads, plazas, and bridge in Canada and the US. That is what some P3 companies thought made sense and so advised MDOT. And so does Canada too I bet. I can guess who the winner of that competition will be already. It's hardly a surprise so I hope that the other companies don't spend to much cash to prepare a quote.

But they need not worry too much. The P3 legisaltion provides:
And where is the WSA financial report already?

It is interesting that again no one told us how the traffic would increase, including MDOT But we are required to take it on faith.

Oh sorry, I forgot. Somehow ship port traffic from Halifax and the Montréal areas will boost our traffic. I don’t know about you but I would have thought that it is cheaper to send containers via rail or even by lake freighter than by truck to send them into the United States from our East Coast port.

Oh did someone from the Detroit Chamber get a job trying to sell Halifax harbour in the US? That is what I heard but do not know yet if it is true. If true, that person should know that Halifax is so pleasant in the summer.

I am so glad that the auto company executives told us why they needed the bridge but not that they were going to help pay for it either. Just like they refuse to acknowledge that they are responsible for the backups because of Just in time delivery. They also forgot to mention the concept of building mother plants with all of the supplier plants around it so that there is little need to cross the border at all. A mere oversight.

The most interesting part was the discussion by Captain Kirk again that there was no need for legislative oversight whatsoever. That is mind-boggling considering the dramatic changes in the P3 market that he himself identified. Even he acknowledged that only a few years ago a P3 operator would have paid the State money upfront as in Indiana but now it looks like the State will have to raise bonds itself to help out a P3 operator who probably cannot raise money on its own. That’s right in the legislation.

The MDOT highway bureaucrats want to have the absolute power to do whatever they want to do. You see, the private operators might get soooooo upset. They might not want to go into Michigan but would go elsewhere if there are silly things like Legislative oversight to control their rip-off of taxpayers. Heck a P3 20% rate or return is hardly something for legislators to be concerned about when the State can borrow the money at 5%!

And I liked how the possibility of availability payments was snuck in too ie taxpayer subsidy for a project that cannot pay its own way in any event.

No one really focused on how projects will be paid back and how these excessive charges will be borne by users as tolls or by taxpayers if taxes have to pay for this. Oh heck, our children and grandchildren can pay because all of the bureaucrats and legislators who sold them out would be long gone by then.

Nope, we just got a breathless Jennifer and Hollywood! And have you noticed how expensive it is to buy popcorn these days when you go to the movies.