NJT may sell, then lease back River Line equipment Options

[KevinKorell]

From Philadelphia, PA Inquirer, 3/21/04:

NJ TRANSIT's fancy financing

Before state taxpayers even had a chance to try out their $1.1 billion light-rail system last Sunday, NJ Transit officials were considering selling the line's sleek European rail cars to a foreign bank in a complex financial deal.

This story is here.


How the sale-in, lease-out process deal works

[ICGsteve]

The agency then gets the remaining $5 million as profit.

Not so fast. Out of that $5 mill comes the cost of the lawers and accountants to put the deal together and see it through. If during the lease the cars need intensive capital the process becomes complicated and more expensive than it normally would be, plus an additional party must be in agreement (the owner).

As a socialist my concern it that the fact that it makes financial sense to transfer public property to private hands, no matter what the complicated technical mechanics that make this possible, must mean that the tax code and/or accounting laws are written with undue favor towards corporate interests. My vote is to fix the problem rather than keep selling off public assets to profit seekers.

This post has been edited by ICGsteve: Mar 21 2004, 10:02 PM