"This is a great day for Pennsylvania," Rendell said in a prepared statement. "We urgently need new funding for road and bridge repair, and a turnpike lease will help us meet that need. Under the terms and conditions we set, the turnpike will be upgraded and tolls will be no higher than the Turnpike Commission will charge."
Abertis, a Spanish toll road operating company from Barcelona, could retain the right to raise tolls 25% next year, and then hike tolls 2.5%, or the rate of inflation, the following years. The firm partnered with Spanish investment firm Criteria CaixaCorp and Citigroup. The operator directly manages more than 2,000 miles, while indirectly managing 3,000 miles of toll roads in Spain, the United Kingdom, Italy, Puerto Rico, France and Argentina.
Rendell extended the bidding for the lease of the Pennsylvania Turnpike past its original May 9 deadline because two top bidders were with 10% of each other, and were given an additional week to resubmit. Goldman Sachs had the second highest bid with $12.1 billion.
"Keeping in mind that all the bidders were bound by the same terms and conditions, Albertis was chosen because they submitted the highest bid," a spokesman for Gov. Rendell tells GlobeSt.com
The Rendell administration would invest $3.6 billion of the lease payment to pay for highway, bridge and public transit projects. The plan would also support 73 public transit agencies. The rest of the lease money would be invested with the Pennsylvania State Employees' Retirement System. The administration says it expects to earn a 12% annual return on the investment.
Leasing the 570-mile toll road has been in the works since May 2007 after an analysis by Morgan Stanley predicted the lease would produce new transportation revenue compared to two other projects, including the proposed toll on I-80. In order for the bid to be passed, the Pennsylvania General Assembly must modify Act 44, which would negate the need for the toll on I-80.
The spokesperson says "If the Legislature authorizes the lease plan and sends the governor legislation to that effect, he will sign it quickly and begin the process."
The governor said he wants to turn the tollway to the private operator by mid-September of this year, but legislators have been skeptical of approving the plan.
"There is some doubt among Legislators concerning the wisdom of leasing a public asset to a private entity," says Rendell's spokesperson. "While this consortium includes foreign investors it is not a foreign company. However, there are legislators who will not see the difference and will call it a foreign company."
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