The debt-ridden Northwest Parkway needs whatever help it can get from outside investors, and we hope the bidders are as plentiful as executive director Steve Hogan suggests.
Traffic on the privately funded parkway, which is carrying a debt of over $400 million, has been running well below projections. It will need to dip into $80 million in reserves just to pay almost $36 million in debt service that's due this year through 2008.
And then there's the principal, on which nothing has been paid yet.
That's why the board announced it's seeking a partner - not a buyer - who will buy out the current bondholders and issue new debt payable over 50 years or even longer. That's standard and it's necessary in the toll-road business, says Hogan. By Colorado law, the state and the authorities it charters can issue debt no longer than 40 years.
The 11-mile Northwest Parkway attributes its problems to declining employment and slower than expected growth in the area it serves. Of course it also suffers from the fact that the Colorado Department of Transportation hasn't yet been cleared to build the link between the parkway's west end south through Golden to C-470. That would complete the high-speed beltway around the Denver metro area.
Hogan claims one investment group has already made an offer and a half dozen others have expressed interest. If that's true, it bodes well for the future of toll roads in Colorado, because if the Northwest Parkway can be made profitable, practically any road can.
Obviously motorists would prefer not to pay tolls, but they may be here to stay. The state and federal gasoline taxes can no longer be counted on to provide the capital needed for new highways.
Private toll road enterprises are more common in Europe, Asia and Australia than they are in the U.S. It's quite likely that if there are in fact bidders for the Northwest Parkway, some will come from abroad.
We can only hope that the legislature doesn't turn xenophobic and forbid foreign participation.
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