Pennsylvania Makes a Major Move

Governor Ed Rendell (D-PA) announced the winning bid for the lease of the Pennsylvania Turnpike yesterday.  A team led by Citi Infrastructure Investors won the competitive bid by offering $12.8 billion for a 75-year lease of the Turnpike.  The deal offers many of the same protections as the lease of the Indiana Toll Road in terms of limited toll increases and guaranteed improvements to the road.  In terms of the dollars and cents, the deal is very close to what Indiana received.

The Turnpike is 520 miles long, as compared to the 157 mile Toll Road.  The Turnpike deal will be paying $2.46 million per mile, as compared to $2.42 million for the Toll Road.  The annual toll increase amount is 2.5% for the Turnpike, the allowable increase in Indiana is 2% (which doesn't take effect until 2016 because of the rate freeze that was put in the Major Moves legislation). 

The Indiana Toll Road lease appears to be a much better deal in terms of the improvements that are required as a part of the agreement.  The Turnpike agreement requires improvements to be made that average $10.5 million per mile, whereas the Toll Road agreement requires improvements that average $28.8 million per mile.  Those are improvements that either wouldn't have happened, or would have been charged to the taxpayer.