Economist Joe Cortright has prepared a memo to local leaders on the financial risks (PDF, 51K) of the Columbia River Crossing project.
Beyond fundamental questions like where the local match is going to come from, the project may require an unprecedented amount of debt.
But perhaps scariest is the constraints that may be created by assuming that much of this debt will be repaid using tolling revenue. This has interesting implications:
- If peak oil drives gas prices hight enough that there is less traffic across the bridge than projected, toll revenues might not provide the revenue to repay the bonds. If that happens, what other revenue sources would be diverted to repay the bond holders?
- Since the bond holders will have a vested interest in maintaining traffic flow over the crossing, might the bond covenants restrict actions that could reduce traffic – like expanding transit service?