HARRISBURG -- By the end of April, Gov. Ed Rendell will announce the highest bid for the Pennsylvania Turnpike, and he hopes the Legislature will vote by mid-June to lease the toll road to a private operator.
He has a good chance of getting the votes of legislators whose districts lie along the Interstate 80 corridor, because the turnpike leasing proposal would scrap the state's plan, approved in July, to impose first-time tolls on I-80. But he'll face some opposition from members of his own Democratic Party.
Some legislators said yesterday they're willing to consider leasing the toll road, which opened in 1940, but they said the governor's desire to have such a complicated and important matter approved by mid-June is unrealistic.
Other legislators complained that Mr. Rendell hasn't released enough information about leasing such an important road for 75 years to a private consortium, which probably will include foreign companies.
"None of us have been in the loop on this," said Rep. Rick Geist, R-Altoona, the top Republican on the House Transportation Committee. "We need a lot of education on this lease proposal. There has to be a lot of information sharing by the governor."
He and other lawmakers insisted that Mr. Rendell release the names of all bidders -- and the amounts they bid -- rather than just the name and amount of the highest bidder.
House Republican leader Sam Smith of Punxsutawney was glad to hear about eliminating the tolls planned for I-80, which runs through his district, said his aide, Steve Miskin.
Mr. Smith "supports, 100 percent, consideration of some kind of lease," Mr. Miskin said, but added that his boss is "disappointed in Gov. Rendell's reluctance to use an open and deliberative process" with legislators.
While the two Republicans are at least willing to consider a lease, the same can't be said for Rep. Joe Markosek, D-Monroeville, chairman of the Transportation Committee. He wants to put tolls on I-80 and doesn't want to give control of such an important road to a private company.
In July, Mr. Markosek sponsored Act 44, a transportation funding bill, which the Legislature approved. It seeks authorization from federal officials to place tolls on I-80, but federal officials have been slow to act.
"That's because the governor is going down a different avenue with this turnpike lease," Mr. Markosek said. "I urge him to get on with the majority of legislators who passed Act 44 and lobby federal officials for tolling I-80."
The I-80 tolls have raised fierce opposition across the northern half of the state, where the east-west highway is located.
Before any turnpike lease is approved, Mr. Markosek said, the Legislature should hold "extensive hearings throughout the state." If that happens, a vote by mid-June is extremely unlikely.
If the Legislature does lease the turnpike to a private operator, it would mean phasing out the Pennsylvania Turnpike Commission, probably over the course of a year or two. Rendell officials said the commission would complete any turnpike construction projects that it now has under way, but all new roadwork would be done by the new private operator.
The turnpike commission has many allies in the Legislature, and has provided jobs for friends and relatives of politicians for years, so it won't be easy to eliminate.
The turnpike's chief executive officer, Joseph Brimmeier, said he was "obviously disappointed'' that the governor continues to pursue a lease.
He said the governor signed the Act 44 transportation plan only nine months ago and the commission has made "tremendous progress" in implementing it.
The commission will, by the end of April, have sold $750 million in bonds and will turn the money over to the Pennsylvania Department of Transportation for improving roads, bridges and mass transit. If the turnpike commission were to go out of business, it isn't certain how the state would pay off the 30-year bonds that were sold.
Mr. Brimmeier said he's surprised that the governor wants a lease approved so quickly. "The stakes are far too high for such a rush job," he said.
Mr. Rendell has been talking about a turnpike lease for months, but hasn't said much about the responses he's getting. Several months ago, two dozen firms expressed interest in the idea.
Mr. Rendell's deputy chief of staff, Roy Kienitz, said yesterday that he expects "multiple bidders" for the turnpike lease. He refused to say exactly how many, what their names are or even the range of the expected bids. Consultant Morgan Stanley estimated the lease could generate $12 billion to $18 billion, which could be invested to generate as much as $1 billion a year in interest.
That would be slightly higher than the $946 million a year that would be generated under Act 44.
Mr. Rendell said the money is needed to improve almost 6,000 structurally deficient bridges and 8,500 miles of state-owned highways that are in bad condition, and the state can't wait any longer to begin making repairs.
Some legislators don't want foreign companies to run an asset as important as the turnpike, but Mr. Kienitz said the state now operates "in a global economy" and companies from overseas likely will be involved in a private consortium.
Most of the discussion about a lease has gone on behind the scenes, with bidders supplying their engineering, administrative and financial qualifications to Rendell officials. But the scope of the discussion is about to change.
"We are finally at the point where all the important terms and conditions for the deal are locked down," said Mr. Kienitz. "We have everything [we need] except the amount of the bids.
Other aspects of the governor's plan:
The private operator would run the 300-mile east-west mainline of the turnpike, plus the 120-mile Northeast Extension to Scranton and two toll roads in Western Pennsylvania, the Greensburg Bypass and the Beaver Valley Expressway. Two other toll roads under development here, the Mon-Fayette Expressway and Southern Beltway, would not be part of the lease deal.
Mr. Rendell decided on a 75-year lease as a compromise between 50 years and 99 years; with a longer lease, higher bids would be expected.
Turnpike tolls would still increase by 25 percent in January, as previously announced by the turnpike commission and as called for by Act 44. Each January thereafter, the new private operator could raise the tolls by either 2.5 percent or the rate of inflation as measured by the Consumer Price Index, whichever is greater.
The state would own the turnpike, but the winning private bidder would collect all tolls, properly maintain the road and manage the 2,300-person work force.
The new operator must follow current union contracts but when they expire, the operator will negotiate new ones, as the turnpike commission has done in the past. The operator can increase the use of technology, such as E-ZPass, which could mean fewer toll takers.
