PA: TX, IN Feel Your Pain

[TyRANTosaur]

Pa. turnpike lease plans 'proprietary'PennDot is keeping 48 firms' plans for running the toll road secret from legislators even as the governor makes his pitch.
By Paul Nussbaum
Inquirer Staff Writer

Gov. Rendell has begun a tour to seek public support for his proposal to lease the turnpike to raise money for transportation projects. Estimates of its value range from $2 billion to $30 billion. As Gov. Rendell begins a statewide campaign to build support for leasing the Pennsylvania Turnpike, his administration is keeping secret the "expressions of interest" submitted by 48 firms interested in the road.

Citing "the proprietary nature" of the proposals, the Department of Transportation has rejected requests from legislative leaders for copies of the submissions, which have come from New York investment banks, the former employers of both Rendell and New Jersey Gov. Corzine, Philadelphia law firms, construction giants, international developers, and a prominent think tank.

The department has released a list of the companies but not their proposals, saying they are not public records.

"We regard this process as being identical to the request-for-proposal process, which is always confidential," PennDot spokesman Richard Kirkpatrick said in an e-mail yesterday. "Submissions, which may contain proprietary information, are not made public.. . . A contract with a successful bidder or submitter is the document that becomes public."

Rendell, after meeting with legislative leaders yesterday, began a statewide tour to seek public support for his proposal to raise $1.7 billion a year for transportation projects by leasing the turnpike and imposing a tax on oil-company profits.

His first stop was Pittsburgh. He is scheduled to visit Philadelphia on Thursday.

Also yesterday, legislation was formally introduced in the state House to allow leasing of the turnpike, as well as other public assets such as mass transit agencies and airports.

"Nothing's moving until we get that information" about the proposals, said Rep. Dwight Evans (D., Phila.), chairman of the House Appropriations Committee. "Rest assured, I will get that information."

Pennsylvania, New Jersey and other states are considering leasing toll roads to private companies to raise large amounts of money quickly without raising taxes.

Estimates of the value of the Pennsylvania Turnpike range from $2 billion to $30 billion; Rendell estimated last month a $10-12 billion lease could generate annual interest of $965 million for highway and bridge repairs. In New Jersey, estimates range from $12 billion to $38 billion or more for the New Jersey Turnpike and the Garden State Parkway.

The chairman of the Pennsylvania House Transportation Committee said yesterday he wants more information from Rendell about the "expressions of interest" as the governor begins his campaign to promote a turnpike lease.

"We wish him well . . . and hopefully, the information part will follow," said Rep. Joseph Markosek (D., Allegheny). "It would be helpful to have the information, because we're trying to put together a plan that will pass."

Markosek and Evans asked for copies of the "expressions of interest" in a letter last month to Transportation Secretary Allen D. Biehler. Biehler responded that "due to the propriety nature of the responses that were received, the department is not at liberty to share this information."

The 48 companies that responded with submissions include branches of the Australian and Spanish companies - Macquarie Securities Inc. and Cintra Developments - that have teamed up to lease toll roads in Chicago and Indiana.

Other submitters include the former employers of both governors Rendell and Corzine: Rendell used to be a partner at the law firm Ballard, Spahr, Andrews & Ingersoll, and Corzine was the chief executive officer of Goldman, Sachs & Co. Goldman Sachs has been the biggest promoter of toll-road leases; the firm has served as adviser to governments that make the deals, and it has put together a $6.5 billion infrastructure fund for investors.

The RAND Corp., a California-based policy research organization, submitted a proposal. But it was an offer to provide consulting services on possible financing arrangements and uses of the revenue, not to lease the turnpike, said Martin Wachs, director of RAND's transportation, space and technology program. He said the proposal is a public document and invited PennDot to release it.

Another submitter is the Pennsylvania Turnpike Commission itself, which argued it "can monetize the value of its own asset much more effectively than could a private concessionaire."

Political leaders in both Pennsylvania and New Jersey may find toll-road leases a tough sell. Markosek said he is hearing "a lot of skepticism" from his Western Pennsylvania constituents, and a poll released yesterday of New Jersey motorists found most opposed.

The AAA Clubs of New Jersey poll found 56 percent of motorists opposed putting the state's major toll roads into private hands to pay debt.

The poll found 68 percent of motorists were aware toll roads may be leased. Of everyone surveyed, 65 percent said if the roads are leased, all money should go only toward state transportation needs. Only 15 percent said money earned from any lease should be spent on other needs, such as overall state debt.

"Even though there is clear initial opposition, it's worth noting that about a quarter of those surveyed - 24 percent - remain undecided," said Joel L. Vittori, CEO of AAA South Jersey and chairman of the state's Council of AAA Clubs.


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Contact staff writer Paul Nussbaum at 215-854-4587 or pnussbaum@phillynews.com.

[Beckyal]

At least they are not selling it just leasing out america.