The Perils of Privatization

Jay Hancock writes on a plan to privatize Delaware's segment of I-95.

Some key paragraphs:

Marylanders and other non-Delawareans would pay the inevitably higher I-95 tolls plus any other consequences of placing this economic lifeline in private hands. Leasing I-95 to some corporation would be the worst example yet of a pernicious national trend: transforming public utilities into private monopolies

Discussion about road privatization reminds me of the push to deregulate Baltimore Gas and Electric Co. and other electric utilities a decade ago. Turn regulated assets over to the market, goes the refrain, and everything will be groovy. BGE customers saw how that turned out last year, with a 72 percent rate increase and much higher profits on BGE's former generation plants, now owned by the utility's parent.

Government is incompetent at many things, but history shows that natural monopolies must be owned or heavily regulated by the state. Few monopolies are as natural as I-95, the carotid artery of the East Coast economy. No matter how high its tolls might rise, travelers would have little choice but to pay them.