Detroit River International Crossing Problem…Continued


On June 24, 2011, I left the DRIC Post with a final question “In a further blog, the debate about ownership will be raised. The issues at this point are simply this: Should a second bridge be built? If so, how?”

The answer to the question above is not a simple one. Matty Moroun, a responsible businessman, obtained the Ambassador Bridge in a contest with Warren Buffett of Berkshire Hathaway, as part of a very publicized stockholder fight.

The bridge is a public utility. It serves the public in general, yet does not seem to be regulated as to quality or toll rates in any substantial fashion. The safety of the bridge has been challenged on a frequent basis, although it is not so unsafe that it has been closed. Therefore, we must assume the bridge is safe. Yet, there seems to be little control over how well it is maintained for future use, nor do we have any sense that the rates are related to the value and maintenance costs of the bridge, which should serve as the basis for tolls.

There are very few privately owned international bridges. The Ambassador is one of the few. Given the situation, one has to wonder about the propriety of the private ownership itself.

One could argue that the “libertarian” attitude is that private enterprise should not be challenged by a public entity. The analysis logically would conclude that the Ambassador Bridge is a private enterprise and the notion that the public would in any way finance a public bridge challenges our basic entrepreneurial desires.

Even Adam Smith, the founder of modern day economics, would recognize that there are public uses that are better run by the public itself. Would we rather have every road be a toll road, with little stickers charging for every mile one travels? Those toll stickers are available for many in the eastern states, where toll roads are prevalent. However, this type of activity would only further endanger our fragile economy in Michigan.

While both sides have compelling arguments for their respective positions, the ability of Gov. Snyder to leverage the Canadian loan for Federal matching infrastructure dollars more than tilts the scales in favor of a publically owned bridge. The $2 billion the State of Michigan will obtain from the Federal government will fund numerous road repair and improvement projects, which are not only needed, but will create many needed jobs.

This post was co-authored by Darius Dynkowski, partner with Ackerman Ackerman & Dynkowski.