For whom the road tolls

One victim of the recession has been toll-road privatization, according to an article in this week's Barron's.

"The credit-market collapse and political opposition have all but killed the U.S. highway-privatization trend," the weekly business publication reports.

The article discusses Indiana 75-year lease three years ago of the 157-mile Indiana Toll Road for $3.8 billion to Spain's Cintra Concesiones de Infrastructuras de Transporte (Cintra) and Australia's Maquarie Infrastructure Group. So far, it's been a better deal for the state than for the investors.

Barron's quotes Peter Samuel, editor of TollRoadsNews, as saying toll-road traffic is down 6 percent this year, largely because of recession-reduuced truck traffic, which often accounts for half of toll revenue.

The Barron's article notes that infrastructure was among the investments caught up in the investment bubble of 2005-2007. "As with any investment...price is critical," the article says. "Pay 30, 40 or 60 times revenue for even a great asset, and returns are apt to be poor. For the Indiana Toll Road, Macquarie and Cintra anted up a stunning 40 times trailing annual revenue, and 60 times (EBITA)."