Sunday, October 25, 2015

The Infrastructure Election

Enrique Peñalosa, mayor-elect of Bogotá.
Enrique Peñalosa got the most votes in Bogotá's mayoral election, but the big winners may be construction companies.

A look over campaign contributions as summarized by El Espectador, using information from the Cuentas Claras website (I couldn't get the site to work myself) shows that construction companies financed much of the campaigning, particularly Peñalosa's.

Ex-Mayor Enrique Peñalosa, who led in nearly all the pre-election polls, had the biggest campaign chest. $1.6 billion pesos. El Espectador's article lists at least six builders who contributed to him, and also notes that Peñalosa's 'legal representative' is a director of two construction companies.

At least one of Peñalosa's contributors suffered a recent controversy. Ladrillera Santafe, which mines and sells building materials, was criticized this year by rural residents of Cundinamarca for plans to open three big clay mines, for brickmaking. The critics charged that the mines would destroy the region's ecotourism potential.
There's lots of money in that construction,
whether necessary or not.

It's not hard to see why builders might want Bogotá's new mayor to owe them a favor, since the city
will likely spend a fortune on construction in the next years, on a metro line (sure to cost at least U.S. $10 billion), new roads and bridges, replacing the El Campin football stadium, remaking the Rio Bogotá and many other projects.

But whether such infrastructure is really necessary is another question. Yes, Bogotá has huge traffic jams. But it's well documented that expanding roadways only generates more traffic. The congestion could be reduced much faster and less expensively by discouraging driving, by taxing gasoline more and with a London-style congestion fee. Yes, a metro line would be nice, but the city can't figure out how to cover its projected budget, which is likely to double projectsion. (Peñalosa favors a less expensive, faster-to-build elevated metro line.)

But whether or not the city needs such projects, with construction companies whispering in the mayor's ear, they're much likelier to be built.

People and companies may contribute to candidates for many reasons, including friendship, ideological affnity and respect, but undoubtedly the biggest reason is personal interest: The contributor believes that the candidate, if elected, will promote the contributor's interests, whether by pouring money into their sector of the economy or favoring their specific company. And I suspect that many believe that, if they help get their man or woman into office, he or she will return the favor by funneling city money their way.

That might be good for the company, but not for the city, if the contributing company charges more, is corrupt or less competent than other companies who did not grease the wheels with campaign contributions. Much government spending is not necessary in the first place. For an example, look at the United States' huge and absurd agricultural subsidies, which persist mostly because a few farm states like Iowa have a disproportionate influence in presidential elections.

Whether the builders' investments in Peñalosa's campaign pay off may depend on which Peñalosa governs Bogotá. This Peñalosa campaign video is mostly about building and widening roads all over the city, despite roads' negative impacts on noise, pollution and quality of life - and the fact that they quickly fill up as well.

On the other hand, El Tiempo's summary of Peñalosa's plans emphasizes more sustainable projects such as expanding public transit and bike lanes.

Which Peñalosa will govern Bogotá?

Full disclosure: My business, Bogotá Bike Tours, has benefited indirectly from the construction companies' largesse because we've rented bikes to the Peñalosa campaign.

By Mike Ceaser, of Bogotá Bike Tours

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