I don’t see this as anything more than Rendell using the “lease” to try and break the opposition to the tolls on I-80. He’s goring a lot of oxes with this. It might be enough to spur congressional R reps like Platts, Gerlach, Pitts to support the federal legislation to allow tolls on I-80 because turning the Tpk over to an outside company affects a lot of good jobs (toll takers, maintenance workers, etc) in their districts.

I mean this “award” isn’t going anywhere in the state legislature and it’s sure to annoy his Democratic and union allies. But, I guess Rendell got tired of waiting for action and decided to try and force the issue.

pd

Now that we have some information regarding this lease, it appears that the figure is well below the approximately 30 billion anticipated by the Governor. PD’s arguement suggesting that Rendell’s motive is to force timely action on I-80 tolls certainly has some merit as we have seen this tactic before from the Governor. However, he is a leading advocate of PPP’s, which is evident by his statements at NGA and National Transportatoin Safety Board (NTSB) meetings, so this may be more than simply lighting a fire under the Legislature.

Finally, there is a reason the operation, maintenance, and construction of transportation infrastructure finds its home in the public sector. If the operation of the system provided a significant ROI a private entity would already be running the system. Walmart probably would have purchased all of I-80 by now. In order to provide a sufficient ROI tolls will need to be raised much higher than they will be via the Turnpike Commission. Pennsylvanians will incur a much larger cost if a significant portion of the motoring public cannot afford to use the roadway, as we will: 1) Simply not be able to drive on the road ,or 2) be forced to provide a subsidy to the private operator in 2011 when the tolls are due to increase to keep the roadway affordable, especially to truckers.

To solidify my point, Morgan Stanley’s analysis predicted a 5.5 annual toll revenue growth a year for 50 years begining in 2010. The remaining 25 years would see an increase of 3 percent. Staying with the same study,the current one-way toll of $19.75 for the 359-mile main section eastbound could increase to $287.20 after 50 years. While this 287.20 figure assumes no growth in traffic, I believe it sheds some light on just how high tolls may need to raised to provide a significant ROI for private investors.

JM

I’d also like to point out that while there’s no real viable alternative to I-80 in the north, there ARE alternatives to the Tpk such as US-30 and US-422. If the tolls get too high, I can see a lot of drivers switching to those routes. That, in turn, will cause more wear and tear and maintenance, probably including widening those roads.

pd

I posted this on another thread a few weeks back, but it seems relevant to this one as well:

I favor a potential lease of the Turnpike, and here’s why: Why not? We’ve tried it the other way (higher taxes, fees, “surcharges”, tolls, etc.) for generations, and look where we are. Once again the Commonwealth is facing down yet another “transportation crisis” and once again state officials are crying poverty as to the means to pay their bills. Anytime any level of government utters the word “crisis”, it means taxpayers will end up footing the bill for the whole debacle. Now, privatization doesn’t have a perfect track record, but I’d argue that it works more often than not. In the case of the Turnpike, the proposed contract with the Commonwealth would provide incentives to perform (something that is completely lacking now under the TPA) and provide a timetable and limits for future toll increases (as compared to motorists living under the mercy of the TPA’s random hikes now). Some attempt to scare up opposition to a private outfit running the Turnpike by claiming excessive toll hikes could occur whenever the company feels like it. If you read the proposals currently out there, this clearly is not the case. Let’s cut away the chatter and get to the real issue ; in reality, the bureaucratic/legislative matrix in our state doesn’t cede power easily. The government and unions have “run the roads” for generations, and some believe it should stay that way, regardless of efficiency or quality. Others, such as myself, believe that, just once, Pennsylvania should think “outside the box”. A lease would actually take care of three birds with one stone. First, it would provide a dedicated source of revenue for our highways as well as regional MTAs, which would solve very contentious issues in Philadelphia and Pittsburgh. Two, future toll hikes would be limited. If a lease occurs, tolls will probably jump by 20-25% in the first year (the TPA itself has guaranteed an increase of that amount in the near future), but become almost insignificant after that. Three, it’s the best available deal for taxpayers all around. It literally solves the transportation “funding crisis” that has haunted the state for years without raising a tax or having to divert money from elsewhere.The only negative? The bureaucracy in Harrisburg won’t be calling all the shots anymore. Well, that’s a negative for some anyway…