Supporters of new international toll bridge in Detroit win big in election day ballot Proposal 6 - 60/40 vote
By Peter Samuel
Supporters of a new Canadian sponsored bridge downriver of the Ambassador Bridge between Detroit and Windsor won a big political victory in voting in Michigan Tuesday. The new bridge got 2.63m votes to 1.78m or 60% to 40% in so called Proposal 6.
The bridge company spent an amazing $30m+ on the campaign, but bridge supporters got huge free media from reporters and commentators almost unanimous that the new bridge is an urgent need and that the bridge company was "greedily" defending its "monopoly." Some reporters dubbed the issue bigger than the presidential election itself and wrote about it with great passion.
Canada's minister of transport Denis Lebel in a statement issued in Ottawa today said: "The defeat of Proposition 6 clears the way for the construction of the new bridge across the Detroit River.
"This is good news for travelers, workers and industry on both sides of the border, who will benefit from the new publicly-owned bridge."
He said the government of Canada has committed $550 million for the U.S. portion of the project, such as the construction of the I-75 interchange, which would normally be paid by the State of Michigan, as well as underwriting the bridge itself. Once the builder and Canada had fully recouped their investment from tolls, his statement said, Canada would share of the toll revenues with Michigan.
The Canadian politicians have recognized the new bridge won't pay for itself so they've said they'll underwrite its costs by taking all the traffic and revenue risk, paying the financiers of the central span with an availability payments P3 contract.
Canadian prime minister Stephen Harper on a visit to India asked by reporters about the Michigan ballot result said "We're very pleased to see the support of the people of Michigan for the new bridge" which he called "very important to the economies of both our countries."
He also mentioned his hope to work with President Obama on a "Beyond the Border" free trade initiative and efforts to harmonize customs and security arrangements to speed traffic through border posts. Security and customs inspections are the major source of delays to US-Canada traffic.
Michigan governor Rick Snyder who has championed the new bridge was obviously happy with the vote but expressed frustration at the Obama administration's slow response to three federal permit applications still needing approval.
"Now that we're done with the election, hopefully we can get people to focus on that in Washington and give us a fairly prompt response," he was quoted by the Detroit Free Press.
Made into a referendum on the bridge
Snyder who has consistently failed to get any support for the new bridge from the state legislature persuaded the Canadian Government to say they'd underwrite it, and signed an agreement with the Canadian prime minister to that effect in June. Canadian assumption of responsibility for funding the bridge undercut the Ambassador Bridge company's criticism that Michigan taxpayers would be liable for losses.
The text of the Proposal 6 ballot measure they sponsored would have maintained the status quo in barring any state spending. It was a status quo measure in that the state legislature was refusing to support the bridge with funding, and the Governor and the Canadians both said Michigan funds were not needed either.
Nevertheless the local Michigan and Windsor media misreported the substance of Proposal 6 day in and day out through the campaign saying its enactment would prevent construction of a bridge without a popular vote. Governor Snyder and the Canadians misrepresented the ballot wording too - even to the extent of claiming it would require popular votes for intra-state bridges. The bridge owning Moroun family was vilified as defending a "monopoly" although the bridge has vigorous competition from the nearby Detroit Windsor Tunnel for car traffic and from the Blue Water Bridge and a freight rail tunnel for long-distance freight.
Therefore the contest was posed as whether or not Michigan should go along with a bridge the Canadian taxpayers would underwrite or take the side of a greedy monopolist. The Bridge company's huge advertising blitz clung to the possible costs to Michigan. It did nothing to present family head Matty Moroun or his son Matthew as regular business people concerned to provide a service or to discuss their competition with other crossings.
Now they have to deliver...
The Canadian prime minister now has to deliver on a bridge that his government has often told Canadians will be paid for by P3 investors when the forecasting studies show it will lose money so heavily no investors would take the toll revenue risk.
Not enough traffic for new bridge
The project's basic problem is the modest level traffic in the corridor - just 55,000 vehicles/day already spread among three crossings and 12 travel lanes. These have capacity to handle 100,000 to 120,000 vehicles/day before being congested. Official data show truck traffic at the Ambassador Bridge averaging only 7,200/day and at the competing Michigan-Ontario crossings another 4,100/day in 2011, 11,300 total.
Bridge promoters constantly tout the 'value' of trade conducted through the corridor but that has no bearing on bridge lanes neded. As electronics products in particular are more more compact a single tractor trailer can carry double or treble the value of a load three or four years ago. It is still one tractor trailer however and close to a thousand such trucks can be carried per hour in a single lane.
Media misreporting produced some amazingly inflated numbers during the campaign. CNBC used a ten fold exaggeration saying "more than 71,000 trucks" cross the Ambassador bridge each day. That number was picked up by others including IBTimes (Nov 2). CBC News said that 28,814 trucks crossed the bridge each day - a four fold exaggeration (Nov 7).
Detroit media used a number of 10,000 trucks per day from several years ago and a mere 40% exaggeration.
Ironclad Canadian guarantees may rust
Righteous "Truth Squads" and "Fact Checkers" in the local media declared as "lies" any suggestion that the Canadian commitments to underwriting the new bridge were anything other than "ironclad" while local Canadian consul Roy Norton declared himself "offended" by such suggestions.
Yet arguments can be validly made that the Canadian commitment to fund the new bridge - estimated officially to cost $2.1 billion - is less than "ironclad."
1. There is no Canadian parliamentary backing for the prime minister's agreement and undertakings.
2. The agreement between Michigan and Canada contains two opt-out clauses for Canada if it should cease to want to support the bridge.
3. The agreement doesn't preclude the Canadians from seeking Michigan support if there are cost over-runs (Gov Snyder has said he's seeking a supplementary agreement to preclude this, but it is not in place.)
4. Michigan Governor Snyder's power to commit Michigan to the agreement without legislative backing could be problematic.
Still skeptics have to concede: the project has new momentum from the bridge-builders' ballot victory November 6.
Gov Snyder has predicted that "shovels" will be "in the ground" within six months and that the bridge will open by 2020.