A team led by Citi Infrastructure Investors and Abertis Infraestructures now owns a significant and historic piece of the U.S. infrastructure system.
Pennsylvania Gov. Ed Rendell announced on May 19 that the $12.8 billion binding big submitted by the group for the 75-year lease of the Pennsylvania Turnpike will produce more funding for roads, bridges and public transit systems than Act 44, which would toll I-80. The concessionaire also will implement a capital investment plan in excess of $5.5 billion.
“This is a great day for Pennsylvania,” Rendell said. “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. Where Pennsylvanians will see a major difference is on our other roads. Road repair all over the state will accelerate and we will be able to cancel the plan [Act 44] to impose tolls on I-80.”
The lease plan is expected to generate annual payouts for transportation over the 75-year life of the lease. These payments would average 13% higher than the maximum available under the I-80 tolling plan, assuming investment returns equal to the average earnings of the Pennsylvania State Employee Retirement System over the past 20 years.
Final acceptance of the winning bid will require enactment of the legislation by the Pennsylvania General Assembly and will require modification of Act 44. If approval is granted, the Turnpike Commission would make annual payments to PennDOT averaging $944 million per year for the first 10 years, and larger amounts thereafter. If the turnpike is able to toll I-80, payments to PennDOT would fall to $450 million per year with no escalation.
For more on the story, please read the June issue of Roads & Bridges magazine.