Politics and the Financial Crisis Slow the Drive to Privatize - New York Times/ Worth reading again.

Note: Former Puerto Rico Gov. Acevedo Vilá brought this NYT's report to our attention in his interview published in today's Puerto Rico Daily Sun. -- See posting on Topix of this interview. -- Though this is a June 4, 2009, story, it is worth repeating today on Topix. Puerto Rico Gov. Fortuño is pushing ahead gung-ho with PPPs in Puerto Rico. -- Can we say: "Look Ma! Everybody is out of step except Fortuño?" Open link and read full story. Learn all the facts. ************* It was hailed as a win-win for Main Street and Wall Street — a way for states and cities, along with financiers, to make some money. Peter Wynn Thompson for The New York Times -- A $2.5 billion plan to privatize Midway Airport in Chicago collapsed in April after investors were unable to obtain debt financing. But now privatization, the selling of public airports, bridges, roads and the like to private investors, looks like a boom that wasn’t. Deals are collapsing. Airy hopes of quick profits are vanishing. And what was celebrated as a new wave in finance is, for the moment, barely making a ripple. What happened? The financial crisis, for starters. The easy money that Wall Street was counting on to finance its purchases has largely disappeared. Then the Obama administration unintentionally damped interest with its $787 billion economic stimulus package, a windfall that local governments are now racing to spend. Bankers concede they got a bit ahead of themselves. When times were good, investment banks and private investment funds raised billions of dollars in hopes of buying infrastructure. But many state and local governments resisted selling because of money, politics or both. Some deals turned out to be less lucrative than these would-be sellers had hoped. Government officials also began questioning whether taxpayers would be better off if infrastructure were in private hands. After Chicago sold its parking system to a private operator, for instance, drivers had to feed meters with as many as 28 quarters to park for two hours. “We will see a few transactions,” said Fred Pollock, a vice president at Morgan Stanley Infrastructure, a private equity fund. “But we know what we won’t see — a tidal wave of projects.”