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would be interested in funding the project and that an initial $2 toll in each direction would be sufficient to repay the debt
and supply the investors with required profit levels.
Costello, however, isn't buying it. He says this isn't like the Chicago Skyway in that there are other free alternatives.
He also claims that the study leaves many questions unanswered: What investors would be interested? Who would own it? Who
would maintain it? Who would be left holding the bag in case of a default?
"It is hard for me to believe that it would be able to attract private investors to come in here to invest a billion
dollars to build a bridge where they have no guarantee on their return and they have no guarantees on the revenue strength,"
said Costello. "I believe that the fact that we have other bridges that are free and will continue to be toll free, if you
toll one bridge and the rest of them are not tolled, there is no way, in my judgment, that you are going to be successful."
Ben Reeser, finance coordinator for the Missouri Department of Transportation, admits that the SLRBC report is theoretical.
"The Regional Business Council hired Goldman Sachs to kind of run the numbers," Reeser said, "just to kind of get an idea
if this is financially feasible at all. Is it going to require a $50 toll to build this bridge or is it something more
reasonable? I think that is what they were trying to see."
While the SLRBC report suggests a $2 toll, what the actual toll might end up being is anyone's guess, according to Reeser,
because prospective investors would need to do their own analyses, their own traffic projections and, in fact, their own
bridge designs. In effect, everything from the architecture to the number of lanes could change from the existing designs.
"All the legislation does," said Reeser, "is give us an opportunity to receive unsolicited proposals. What that means is
that a company or a group of companies can present and deliver a proposal to MoDOT: 'Here is what we can do. We can build a
bridge for you; here's what it's going to look like; here's when it's going to open, here's how much we think the traffic will
be.'"
The companies submitting their proposals are in control of the specs of the project, he said.
"Those companies that come to us," Reeser added, "don't have to build it under any kind of specification or according to
what we want. If we say that we want eight lanes, well, they do not have to do that. Their proposal can be six lanes or 12
lanes. They can use all of their imagination. They can use what they think would be the best-proposed infrastructure and see
if we like it."
Reeser says MoDOT won't follow the typical request-for-proposal process that governments use, but rather will wait for an
"unsolicited" proposal, work with that company to work out the kinks and then prepare an RFP based on that proposal and seek
competitors. This process proved very controversial in New Mexico when Pete Rahn ran the New Mexico Department of
Transportation and worked a deal with Koch Industries of Wichita, Kan. to add lanes to N.M. 44/U.S. 550 (See Kerry Smith's
page-one story in this edition).
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This all assumes that anyone will be interested at all - which Costello doubts - with a billion-dollar project that will
take an estimated 10 years to complete before anyone pays a toll, and with several free competitor roadways in the vicinity.
St. Louis' experience with toll bridges hasn't been good, Costello says, referring to the defaults of the Martin Luther King
Bridge and the McKinley Bridge bonds and all of the problems encountered with acquiring and rehabilitating those bridges.
Costello also points to the non-compete clauses that are common in these PPP infrastructure projects as a concern. The
non-compete clause prevents the government from building new projects or improving existing projects in the vicinity of the
PPP project because they may draw traffic away and reduce toll revenue.
"Will that mean that MoDOT or IDOT cannot make improvements to the Poplar Street Bridge or the Martin Luther King Bridge or
any of the other bridges because it will compete with this toll bridge?" Costello asked.
While Reeser says there is a lot of money in the world seeking these types of investments, he admits it is possible that no
one will be interested. If that happens, the new Mississippi River Bridge project is dead, he said.
"We are not going to do anything unless somebody sends us a proposal for it," he said. "It won't get built if there is not
a private company willing to take that risk. If private companies look at the Poplar Street Bridge, the King Bridge and these
other bridges and the numbers don't work, or they don't agree with the Goldman Sachs analysis or something like that, then we
won't get a proposal and we aren't going to get the bridge built."
Costello says the struggle to get the earmark in the federal transportation bill last year was a long and difficult one
involving many people. He added that the business community and the elected officials in the region came to Washington D.C.
pushing the new Mississippi River Bridge.
"There was no mention of tolls," said Costello, "and the state of Missouri and the state of Illinois knew full well when
they came to Washington that there is a minimum of a 20 percent match for any federal funds for this or any other project. All
of a sudden, very late in the process, a new person is appointed at the Missouri Department of Transportation, Pete Rahn, and
he says that the state of Missouri has no money to put into the project and it is going to have to use tolls in order to
generate the revenue to build a bridge - but he has yet to produce the plan to say how that could be accomplished."
Costello says he's becoming pessimistic that a solution will be reached because of Missouri's stonewalling. He's also
concerned that blowing this project would not only cost the region a much-needed bridge, but any hope of receiving funding for
major projects in the future.
"If we are not successful in carrying this project off, it will have a major impact on our success in doing anything of any
size in the region in the future," said Costello. "We (the federal government) set aside over a quarter of a billion dollars
for this project, which took money away from other projects in the nation. If we are not able to deliver on this, it makes my
job and the job of our delegation very difficult when I go in and say we need to expand MetroLink to Madison County, for
example. It will have a long-term impact on the credibility of our region."
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