51吃瓜

On February 4, 2025, Chicago, Illinois鈥檚 business community against Mayor Brandon Johnson鈥檚 proposal to raise real estate transfer taxes, adding to the city鈥檚 ongoing economic struggles.

Besides a struggling pension , high home and other factors, a significant contributor to the city鈥檚 woes lies in the controversial privatization initiatives from the 2000s, known as the 鈥淕reat Chicago .鈥� Over the past two decades, these decisions have siphoned an estimated from Chicago.

The privatization trend began under former Mayor Richard M. Daley, starting with the Chicago Skyway. In 2005, the 7.8-mile toll road was leased to a consortium led by Spain鈥檚 Ferrovial and Australia鈥檚 Macquarie Group for $1.83 billion. Tolls were raised immediately, and in 2016, the 99-year lease was to 鈥渁 of Canadian pension funds鈥� 鈥� the Ontario Municipal Employees Retirement System (OMERS), the Canada Pension Plan Investment Board (CPPIB) and the Ontario Teachers鈥� Pension Plan (OTPP) 鈥� for $2.8 billion. Australia鈥檚 Atlas Arteria Ltd then acquired a two-thirds stake for $2 billion in 2022 while OTTP retained the remainder.

In 2006, four downtown parking garages with more than were leased for 99 years to Morgan Stanley for $563 million. After Morgan Stanley defaulted on its debt tied to the lease agreement, control was transferred in 2014 to lenders, including France鈥檚 Societe Generale, the German government and Italy鈥檚 UniCredit S.p.A. In 2016, Australia鈥檚 AMP Capital and Canada鈥檚 Northleaf Capital Partners acquired the garages.

Abu Dhabi came into the in 2008. In a $1.16 billion deal, 36,000 parking meters were sold to Chicago Parking Meters (CPM) LLC for 75 years, a consortium led by Morgan Stanley. Morgan Stanley鈥檚 Infrastructure group soon restructured CPM鈥檚 ownership, major stakes to the Abu Dhabi Investment Authority and Germany鈥檚 Allianz through complex investment vehicles. Over the next five years, parking fees more than . By 2022, CPM recovered its entire $1.16 billion investment, while the city had spent buying back parking spots to cover the revenue it would have until 2084. As of 2024, the investment has returned , with 60 years left on the lease.

Daley鈥檚 goal was to the city鈥檚 budget without raising property taxes before leaving office. However, the one-time payments resulted in long-term consequences. In addition to financial losses, the privatization deals have hindered Chicago鈥檚 ability to modernize infrastructure by limiting efforts to build bike lanes and reduce car dependence downtown. People even need to get permission or make payments to companies thousands of miles away for local street parades.

Growing privatization

Profit-driven entities argue that privatizing public infrastructure leads to greater efficiency through expertise and investment. However, their focus is on profit maximization, not service improvement, leading to long-term . Furthermore, in contracts with limited liability companies, the government assumes the losses, while private companies reap the profits. Companies can walk away or demand renegotiations, while governments are left to maintain services, absorb long-term revenue losses and burden the public with higher costs.

As Chicago鈥檚 experience shows, privatization has extended beyond domestic markets to become an international phenomenon. Starting in the 1980s, the International Monetary Fund (IMF) and World Bank encouraged the privatization of public infrastructure to attract investment, leading to its internationalization. 鈥淎 2006 study by the Norwegian government of IMF conditionality revealed that 23 out of 40 poor countries still have privatization and liberalization conditions attached to their IMF loans,鈥� stated an Oxfam Briefing Paper.

By 2000, sovereign wealth funds, pension funds and multinational corporations began treating infrastructure as a global asset class, involving extended leases that frequently change hands.

Foreign companies operate under bilateral investment treaties or trade agreements, allowing them to bypass local courts. Disputes are often mediated in foreign courts or through international arbitration, such as Investor-State Dispute Settlement (ISDS) and the World Trade Organization. By exploiting legal loopholes like offshore subsidiaries and tax havens, companies can also shield profits while facing little public scrutiny. Despite these issues, domestic infrastructure continues to be increasingly available on international markets.

US privatization

While Chicago remains the most prominent American example, similar deals are widespread across the United States, primarily involving companies from allied or dependent nations.

In 1998, Atlanta, Georgia became one of the first cities to enter into an international privatization deal over public services, signing a 20-year and $428 million with United Water, a subsidiary of France鈥檚 corporate conglomerate Suez, to operate the city鈥檚 water system. Celebrated as the biggest privatization contract in the US at the time, it led to claims of quality decline, delays and other mismanagement before the contract was , leading to the infrastructure being returned to public control in 2003.

Nonetheless, the trend continued. By 2006, foreign companies were leasing and operating of US port terminals along with a smaller share of the nation鈥檚 airports. The United Kingdom鈥檚 National Grid and operates electric transmission networks in the northeastern US.

Indiana has since become a prominent example of experimenting with international privatization. France鈥檚 Veolia entered a 20-year contract to manage Indianapolis鈥檚 waterworks in 2002. The deal was, however, in 2010. Meanwhile, its airport was by the British Airport Authority from 1994 to 2007. In 2006, the Indiana Toll Road was to a foreign consortium led by Spanish and Australian companies for 75 years for $3.8 billion. It was later for $5.7 billion to Australia鈥檚 IFM Investors in 2015.

US entities have purchased some infrastructure abroad, such as in 1999, when a subsidiary of Bechtel privatized Cochabamba鈥檚 in Bolivia before controversy forced its exit. But for a major economy, the US owns surprisingly little foreign infrastructure. It has few state-owned enterprises for overseas infrastructure investment, though some private entities like Blackstone鈥檚 Infrastructure Partners division and Corsair Capital are active. Instead, extensive domestic privatization opportunities have made US infrastructure a prime target for American and foreign investors.

Canadian and Australian companies

and pension funds and other entities, driven by well-funded systems, consolidation, government support and early privatization experience, have become major infrastructure investors in the US and elsewhere. The CPPIB owns worldwide, the OTPP holds stakes in across Europe, along with the Channel Tunnel, while the Canadian company Brookfield Infrastructure Partners owns across Europe.

Roughly half of Australia鈥檚 pension pool is invested the country. But Australia鈥檚 Macquarie Group, in particular, has seen its assets surge, emerging as the 鈥渨orld鈥檚 infrastructure asset manager.鈥� Since the 1990s, Macquarie Group has focused on underperforming or undervalued public assets to acquire and restructure. It its Global Infrastructure Fund in 2001 鈥渢o invest in infrastructure financing opportunities in the US, Canada, UK, and the European Union,鈥� according to its website. In addition to Chicago鈥檚 Skyway, Macquarie holds long-term operational licenses for the Dulles Greenway toll road in Virginia and the Foley Beach in Alabama, among others.

Macquarie鈥檚 toll road portfolio in India is worth an estimated . It took a stake in Greece鈥檚 largest utility, Public Power Corporation, in 2021. It also led the push for the UK鈥檚 Bristol Airport in 2001, while Britain鈥檚 largest water utility was to an international consortium led by Macquarie Group from 2006 to 2017. Macquarie also took full of the UK鈥檚 National Gas Network in 2023.

According to a July 2023 The Guardian article entitled, 鈥淎s Thames Water sinks, Macquarie Group continues its unstoppable rise,鈥� Macquarie is 鈥渨ell known for taking advantage of volatile markets. In the aftermath of the global financial crisis, it bet big on non-investment grade loans, known as junk debt. 鈥嬧�婽he debt was cheap, but the quality was decent and the returns turned out to be excellent.鈥�

European investment

The UK has been a for infrastructure investors since the global wave of privatization in the 1980s. Beyond Macquarie鈥檚 infrastructure holdings, the UK鈥檚 largest electricity generation company was privatized and by France鈥檚 脡lectricit茅 de France (EDF) in 2009. Foreign investors have continued to diversify, with Saudi Arabia鈥檚 Public Investment Fund (PIF) poised to Newcastle Airport, after acquiring a 37.6% stake in Heathrow with French co-investor in 2024.

Europe鈥檚 collective experience with infrastructure privatization has been marked by controversy, largely due to Western European corporate dominance. As the EU expanded, some Western EU companies bought of critical infrastructure in Eastern EU member states. In 2015, Greece privatized regional airports, handing them over to a consortium led by the German company Fraport. This move was unpopular in Greece, especially following the austerity measures imposed by the EU and Germany during Greece鈥檚 economic crisis. However, the EU also provides safeguards in such deals, including and economic support to member states.

Outside the EU, resolving disputes is even more challenging. French water like Veolia and Suez are leaders in global privatization efforts but have ended up in court over dealings with in the 1990s, in the 2000s and in the 2010s. Argentina its oil company from Spanish company Repsol in 2012 after domestic backlash, damaging relations between the two countries. Such cases can be particularly sensitive when they involve former colonial powers and their former colonies, as economic disputes risk being seen as extensions of past dominance, with former ruling states accused of leveraging privatization to maintain influence.

Chinese stakes

China鈥檚 Belt and Road Initiative predominantly focuses on building infrastructure in non-Western countries, though the of Laos鈥檚 electric grid shows an exception. By contrast, Europe鈥檚 existing infrastructure has proven attractive for Chinese investment. Greece sold a 51% stake in its Piraeus Port Authority in 2016 to China鈥檚 China Ocean Shipping Company shipping, which later increased to in 2021.

China鈥檚 competitive pricing, strategic interests and substantial financial and productive resources have extended its infrastructure influence to countries with their own expansive foreign infrastructure portfolios. Chinese firms hold stakes in Belgian, Dutch, German, Spanish and Italian , as well as European and infrastructure.

In Australia, the Port of Darwin was for 99 years in 2015 to China鈥檚 Landbridge Group, with the Australian government resisting pressure to cancel the deal. The State Grid Corporation of China and its subsidiaries, meanwhile, hold large stakes in Australia鈥檚 electricity and gas , raising national security concerns due to its close ties to Chinese military and intelligence agencies. Furthermore, China鈥檚 control over Australian has granted it valuable water rights.

The geopolitical implications of these foreign investments in infrastructure are undeniable, with national security concerns forcing China to its stake in the US Port of Long Beach in 2019. Yet such investments are only becoming more common globally. While they may strengthen economic ties between countries, they reduce accountability, risk undermining sovereignty and disconnect public services from local oversight, sidelining effective public planning in favor of enriching foreign entities.

This trend appears likely to continue, requiring more responsible approaches to maintaining a healthy balance between the necessity for infrastructure investment and public needs. Shorter contracts, profit-sharing models and performance-based agreements could help countries and companies showcase their development models and expertise 鈥� potentially even at lower costs than local providers. However, profit maximization remains the driving force, particularly when financial entities dominate the field.

[This article was produced by , a project of the Independent Media Institute.]

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The views expressed in this article are the author鈥檚 own and do not necessarily reflect 51吃瓜鈥檚 editorial聽policy.