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FOR IMMEDIATE RELEASE |
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State
Rep. Joseph Markosek |
  
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Markosek calls turnpike lease 'a bad business deal'
HARRISBURG, July 4 - Following lengthy review and analysis predicated on two days of committee hearings and public debate, House Transportation Chairman Joseph Markosek announced today that the bid submitted by the Abertis/Citi consortium for a 75 year lease of the Pennsylvania Turnpike, the state's premier transportation asset, is "simply a bad business deal."
Markosek added that he does not plan to call the legislation authorizing the lease/concession up for a vote by his committee.
"After analyzing all the details of the proposed bid, and conferring with my colleagues, it is obvious there is no meaningful support among our committee members, or the General Assembly, to consider this proposal," Markosek, D-Allegheny/Westmoreland, said. "It would be unfair to all parties, including Abertis and Citi, to continue this into the summer. I’d like to thank them for their time and participation in this public process, but let me be clear: the Pennsylvania Turnpike is not available for lease or sale under these terms.
"There is no realistic scenario under which this deal will happen and I have informed the governor, my colleagues and the Abertis/Citi team that we need to move on."
Markosek reaffirmed his commitment to rebuilding the Commonwealth's transportation infrastructure and supporting mass transit. He added that he looks forward to working with the Pennsylvania Department of Transportation, the Rendell administration and local officials on implementing the $350 million investment in bridge repair that was an integral part of this year’s budget. He congratulated the governor for his leadership in exploring – and delivering – badly needed revenue for transportation.
"The governor and the General Assembly understand the challenge confronting us," Markosek said. "We’ve made tremendous progress in the past year. With this additional $350 million and the $750 million received from the Pennsylvania Turnpike Commission under Act 44, we will have generated more than $1 billion in new investment for Pennsylvania transportation without increasing taxes."
Under Act 44, the Pennsylvania Turnpike Commission will provide PennDOT with an additional $850 million in the 2008-2009 fiscal year, with an initial installment of over $212 million payable by the end of this month.
On June 19 and 20, the House Transportation Committee held public hearings to receive testimony from stakeholders and financial experts analyzing the bid submitted by Abertis/Citi to lease the Pennsylvania Turnpike.
Several key findings emerged, including:
· The net economic value of the proposed bid is actually about $8.5 billion, not $12.8 billion.
· The current funding law (Act 44), with or without the tolling of Interstate 80, provides more funds for transportation than the Abertis/Citi bid.
· The lease proposal is predicated on an "unrealistically high" 12 percent rate of investment return.
· Based upon historical Consumer Price Index increases, future tolls under the Abertis/Citi proposal could be 159 percent higher than under the Act 44 plan.
· Transfer of the turnpike from public to private hands would eliminate important forms of public-sector accountability that currently exist.
"Although to some, privatizing the turnpike may seem like 'free money', it is clear that it comes with great costs," Markosek said. "We must challenge ourselves to find alternative ways to make improvements that would avoid the additional costs, risks, and impact on governance, which underlie this particular proposal.
"I have asked all Transportation Committee members to notify my office as soon as possible with respect to their summer schedules. With news accounts of increasing gas prices, record demands on public transportation, deteriorating bridges and insufficient monies to fix our transportation systems, we cannot afford to delay discussion of a long-term plan for Pennsylvania."
While there are a number of proposals in the House Transportation Committee, Markosek said he believes H.B. 555, sponsored by Markosek and state Rep. Rick Geist; and S.B. 1158, sponsored by state Sens. Roger Madigan and Barry Stout, deserve intensive focus this summer.
Both pieces of legislation would authorize the Commonwealth and regional transportation authorities to enter into agreements with the private sector. Similar legislation has been adopted in many states across the country as a tool to achieve enhanced mobility and relieve congestion.
Markosek added, "I look forward to working with my colleagues in the House and Senate, along with the governor, PennDOT and the Pennsylvania Turnpike Commission to explore the opportunities public-private partnerships, also known as P3's, bring to the funding table."
In addition, Markosek has invited those who have expressed interest in leasing the turnpike to join him, adding: "There is much we can learn from companies such as Abertis, Citi, Goldman Sachs, Transurban and Macquaire/Cintra, who operate on a global level and have shown a desire to assist in rebuilding Pennsylvania’s transportation infrastructure. I invite them to participate in the discussion and development of P3 legislation, exclusive of the turnpike, in the Commonwealth."
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