Quote:
Originally Posted by Djeffery
I didn't agree with selling off the 407 either, but I wonder if the province had kept it, what would it look like today? Would we be looking back at what a great highway it is? Isn't this kind of like looking at a house you sold over 20 years ago, seeing what it's worth today, and thinking you gave it away?
I heard Steven Del Duca on the Toronto Mike podcast yesterday mention it. Said Harris sold it for about $3B and it's worth over $13B today (and the lease is ironclad). But what would the 1998 version of the 407 be worth today? How much did the consortium put into it over that time? And how much would Ontario have put into it over that time themselves, and how much longer would the various extensions and widenings have taken? It would probably still end at highway 7 today if the province owned it, and the tolls would likely be as high (although fluctuate every election cycle until they creep up again).
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Sure, the consortium put money into it. Probably several billion dollars worth. It's a better highway than in 1998.
But....
They got a 99-year leave on a road with almost guaranteed growth and no competition. In the most densely populated area of the country. Its only competition was the almost maxed out highway to the south of it, which already suffered from frequent jams, likely to get worse in the future.
Anybody worth a salt could have calculated what it would have cost to build it out to maximum width through the GTA and the finite limit to which it could generate revenue. I suspect $3 billion for the lease is quite undervalued, given the length of the lease.
If the province had kept it, kept the tolls and even put a portion of the tolls back into dedicated improvements, they'd have a situation like any other Crown corporation that returns money to the government. You'd be taking a load off the taxpayer and loading it onto someone who could pay the premium. Think of the LCBO as a comparison.
But now we don't own it. At least not until 2097.