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High Costs and Potholes
For Infrastructure Investors
May 21, 2008; Page C16
America is definitely becoming a mecca for deal-hungry infrastructure funds. Whether investors in this burgeoning asset class making the pilgrimage to these shores will find redemption, however, is far from certain.
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A consortium led by Spanish transportation and highway operator Abertis has offered $12.8 billion to operate the Pennsylvania Turnpike for 75 years, edging out local heavyweight Goldman Sachs Group in the process. Moreover, the final price was 20% more than Abertis, along with a Citigroup fund and a minor Spanish partner, had offered in the first round of bidding. From the looks of it, Abertis and Citi have stretched themselves to the limit.
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