A pitch to lease Pa. Turnpike

Gov. Ed Rendell and House Speaker John Perzel yesterday separately pitched the idea of leasing the Pennsylvania Turnpike to private investors to raise money for highways and mass-transit systems.

Rendell said estimates of the value of such a long-term lease range from $2.5 billion to $10 billion, although he acknowledged those estimates come from "people who are consultants in the field, not from anybody putting an offer on the table." The Democratic governor said the companies that have contacted Pennsylvania officials include the Macquarie Infrastructure Group, an Australian company that has been involved in similar transactions in at least six other states.

A Macquarie-led investment group agreed in July to buy Duquesne Light Holdings Inc., parent of the Pittsburgh-based power company Duquesne Light, for $3 billion.

Perzel (R., Phila.) said an investors' group told him a turnpike deal could be worth as much as $30 billion.

Between 2.5 and 30 billion... now that's a margin of error.

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Re: A pitch to lease Pa. Turnpike

Two words: BAD IDEA!

Re: Why not the private sector.

I’m inclined to agree. The nice thing about selling fixed assets is that the buyer can’t remove them. They can raise tolls, but only what the market will bear.

My biggest concern is that our leaders would piss away any money received in a heartbeat (Anybody know how the tobacco money is being spent in PA?) and our roads STILL wouldn’t get fixed.

Re: Check out Indiana

Mitch Daniels did this exact thing in Indiana and also set out to privatize as much as he could in the public sector. IIRC, because of those moves Daniels is now highly unpopular – and this is in a state that’s about as Republican as they come.

Also, from my experience in seeing first hand the claims that private industry can do everything better than any government entity and then seeing the actual results, well, they can’t do the job either better of cheaper. Look no further than Edison’s inability to run public schools or Boston’s “Big Dig” for proof. The fact is private entities invariably overproject revenues, underproject costs and underestimate the difficulty of the task they’re being asked to do and then are forced to
cut corners on quality or staff or both.

Re: A pitch to lease Pa. Turnpike

I’d like to see a couple of solidy policy proposals. I could be convinced either way. I see PD’s points, but I think roads could be handled on a pay to use format while schools can’t (or public schools shouldn’t).

But again, I need better info to make a decision.

Some Corrections

On Indiana, Daniels has faced criticism not for leasing the highways, but over WHO he leased it to (apparently it was some company from overseas). He’s now facing a Dubai-like backlash. Daniels has also taken flack for eliminating daylight savings time in the state. Poor planning on both sides has killed the Big Dig in Boston. Is the private sector going to have a 100% success rate? Of course not. Nobody is making that argument. However, when government planning clearly fails, why shouldn’t the private sector be given a look? I also take issue with a philosophy that says the government is always entitled to first dibs on a project. Open bidding is a beautiful thing. If a company pitches a proposal that’s more attractive, they should earn the contract. Competition never killed anybody. Also, if you’d like a good example of how the private sector can step in a do a better job, check out Bret Schundler’s record in Jersey City. His tenure has served as a national model for government forming successful relationships with the private sector in the interests of taxpayers.

Why?

Tell me why this shouldn’t be considered? What good argument is there against bringing the private sector into this debate? Why must every solution to public needs involve sucking more money out of the private sector, thus enlarging the coffers of government which does absolutely ZERO to solve the initial issue? If Rendell is serious in his interest to lease, I’ll be the first one to applaud him. Even HE recognizes the public’s disgust with the commission’s “recommendations”. Wait, let me construct your argument for you. “Well, a private company might decide to raise tolls, so they can’t be trusted!” They may very well raise tolls. However, if the choice is between a private company possibly raising tolls and a government GUARANTEE of a tax and fee increase, guess which side I’m coming down on? Lease the highways, reap the lucrative benefits of doing so, repair our roads, and leave Joe Taxpayer out of it. He’s suffered enough already.

Something Smells Here

How do we know what the best deal is since our state leader does not want to disclose any of the details from any of the companies that have applied? Why is he insistent that leasing is the only option to consider? Has he even looked at other options prior to leasing it out?
Shouldn’t the public be informed PRIOR to signing up for the UNKNOWN? Who benefits from all this deal making, and why is this being rushed along so quickly. Something is not right here. We need to SLOW DOWN a bit , TAKE TIME and LOOK at ALL OPTIONS.

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