We recommend that policymakers take prompt action to evaluate the benefits of raising the capital for the new Mississippi River Bridge by offering investors a long-term toll concession. This model is somewhat new in the U.S. but commonplace elsewhere. It gains more value for the public than a government toll authority, because investors bring equity and marketplace thinking to the job. They will look beyond the 30-year term typical for bonds and be prepared to invest for a longer term if the concession is up to 99 years. It is our belief that it is imperative, if for no other reason than to stem the rising costs of materials and labor, that the bridge is built by 2012.
We are fortunate that the existence of alternative river crossings - Poplar Street, the Eads, I-270 and other bridges - will provide competition for a private-enterprise bridge, forcing it to keep its toll rates affordable and its service excellent. Elsewhere, in places with less competition, far more detailed safeguards need to be written into a toll concession to prevent any abuse of monopoly power. In addition, details regarding the appropriate use of union workers and minority contracts can also be addressed in the toll concession agreement.
Large international toll operators can bring expertise and risk averaging to the Mississippi River Bridge in St. Louis. A single entity building a toll operation here is likely to be very risk averse because everything hinges on the financial result of this one bridge. Companies that build and operate many projects can average the risks. They are therefore prepared to pay a higher concession fee and/or finance a larger project.