Philadelphia, PA – After the Federal Highway Administration’s rejection of Pennsylvania’s plan to toll I-80, PennPIRG today urged lawmakers to resist pressure from Gov. Rendell to fund public transportation by leasing the Pennsylvania Turnpike. Focusing solely on the Commonwealth’s short-term cash flow problems could significantly impair Pennsylvania’s long-term financial health, PennPIRG warned, and negatively impact our transportation policy for decades to come. The Turnpike is more than just a source of revenue; it is a vital component of our public infrastructure, and its operation is a keystone of Pennsylvania transportation policy.
“Leasing the Turnpike comes with many hidden costs, said James Browning, Director of PennPIRG. “The state still has other options for funding transit, like borrowing against future Turnpike revenues.”
Highway privatization deals from Colorado’s E-470 and Northwest Parkway to the Indiana Toll Road include “noncompete” agreements to ensure that the private company holds a roadway monopoly within the travel corridor. E-470 and the Indiana Toll Road forbade building any “competing” roads. In the case of Indiana, that extended to any road within 10 miles. Under the 75-year lease proposed by Citi-Albertis for the Pennsylvania Turnpike, taxpayers would be required to compensate the private company for lost revenue from future transportation policies that might reduce paying traffic on the company’s roadway.
Pennsylvanians would also pay dearly to ensure that the contract gets enforced. Pennsylvania will need to hire expensive lawyers, accountants and consultants to ensure that private operators do not shirk from the intent of the contract. Unfortunately, the track record on privatization oversight is very poor at best, and usually nonexistent, even when it is required.
Additional upfront costs come from the difficulty of predicting a fair price for the roadway over the next 75 years. If they have done their homework, both the Pennsylvania government and the private bidders will have already spent millions in consultant fees to make projections about the cost of highway construction and maintenance, traffic levels and inflation.
