Pennsylvania takes steps that could lead to privatized roads

| Friday, December 08, 2006

Gov. Ed Rendell on Wednesday, Dec. 6, announced that Pennsylvania will solicit offers from private firms to determine the potential value of leasing or purchasing the Pennsylvania Turnpike.

In anticipation of the written proposals, state lawmakers have tapped two turnpike officials to craft a bill that would allow private groups to buy or lease state roads, including the 537-mile turnpike.

The House and Senate Transportation panels hired a consulting firm - led by former Turnpike Commission executive director John Durbin - and Commissioner Timothy Carson's law firm to write legislation that would allow lawmakers to bid out state-run roads, the Pittsburgh Tribune-Review reported.

Some lawmakers have suggested privatizing roadways, such as the turnpike and Interstate 80, as another option to a proposed 12.5-cent-per-gallon increase in fuel taxes recommended in a recent report by the state's Transportation and Funding Reform Commission to help pay for needed road, bridge and public transit repairs. The report also recommended that lawmakers consider selling or leasing roads.

Rendell asked private groups to express their interest in selling or leasing roads through written proposals by Dec. 22.

"There are dozens of ideas that have been proposed over the years, including leasing the Pennsylvania Turnpike. Before we pursue this or any other plan to solve the transportation crisis, we need to learn more about the lease option and how much revenue it could generate," Rendell said in a written statement.

Among the companies that have had preliminary contact with state officials about a possible lease deal include Macquarie Infrastructure Group, The Associated Press reported. The Australian-based group has been involved in similar deals in at least a handful of other states, including this year's $3.8 billion, 75-year lease of the Indiana Toll Road.

Rendell said the value of such a long-term lease in Pennsylvania is estimated between $3 billion and $10 billion. At the same time, House Speaker John Perzel, R-Philadelphia, said an investors' group told him that privatizing the turnpike could mean as much as $30 billion for the state.

"It is an exciting proposition to consider if we are to keep toll rates reasonable and generate enough money to make major improvements in our state's transportation system without burdensome tax increases," Rendell said.

Opponents are leery of exactly what the governor would do with the money windfall the state would receive in a lease deal.

"While the governor may be excited, virtually every highway user should be livid given this governor's track record of looting the highway account for his pet political projects," said Todd Spencer, executive vice president of the Owner-Operator Independent Drivers Association.

The governor said he intends to offer a plan to the Legislature in January for how to proceed with any proposals.

- By Keith Goble, state legislative editor
keith_goble@landlinemag.com

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