Possible Pennsylvania Turnpike lease draws big-name interest

| Wednesday, December 27, 2006

There are almost as many potential bidders for the Pennsylvania Turnpike as there are states in the union, even if many of those expressing interest don't have roots in the U.S. at all.

The Pennsylvania Department of Transportation reported this week that 48 companies - both foreign and domestic - have expressed interest in leasing the 531-mile turnpike.

There are some big names on the list, such as domestic financial giants like Bear, Stearns & Co., Goldman, Sachs & Co., J.P. Morgan, Merrill Lynch, and The Carlyle Group.

A number of potential bidders are based in Europe, where privately operated toll roads are more common than in North America. Familiar foreign companies like Cintra of Spain and Macquarie Infrastructure Group of Australia are on the list, however, it appears those companies submitted "expressions of interest" through their U.S. offices.

Cintra submitted through its Austin, TX, office. Macquarie hit the list via its securities firm in New York. Those two companies previously partnered to lease the Indiana Toll Road and Chicago Skyway.

Pennsylvania Gov. Ed Rendell gave possible investors a deadline of Dec. 22, 2006, to send letters of expressed interest.

Rendell cites a funding gap of billions of dollars between turnpike revenue and maintenance expenses.

Like what happened in Indiana with the lease of the 157-mile Indiana Toll Road by investors who paid $3.85 billion in cash, Rendell is seeking a similar deal for Pennsylvania.

The proposal to privatize has a large faction of opponents, including the Owner-Operator Independent Drivers Association, which has more than 147,000 professional drivers and companies in North America.

The Association believes the U.S. system of interstates belongs to the people and should not be doled out to investors in business for profit.

The Pennsylvania Turnpike is commonly referred to as the nation's first superhighway, which helped implement President Eisenhower's vision for interstate highways in the 1950s.

Richard Kirkpatrick, a Pennsylvania DOT spokesman, told Land Line that a number of those who submitted expressions of interest could be asked to make presentations to officials in the coming months. Kirkpatrick said the governor's office had not yet set a time frame.

- By David Tanner, staff reporter
David_tanner@landlinemag.com

 

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