Media & Public Relations

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Carl DeFebo
Manager, Media & Public Relations
Pennsylvania Turnpike Commission
Desk (717) 920-7176

April 16, 2008

Turnpike Issues Statement on
Rendell Administration Privatization Effort

HARRISBURG, PA. (APR. 16, 2008) — ) The PA Turnpike Commission today issued the following statement in response to media inquiries regarding an effort to privatize the PA Turnpike:

“We are obviously disappointed that the Rendell administration has taken this step. We remain committed to implementing Act 44 – which was signed into law just nine months ago by Gov. Ed Rendell. We’ve made tremendous progress,” said Turnpike CEO Joe Brimmeier.

The Turnpike has already provided PennDOT with $520 million in new funding under Act 44. By the end of April, the Turnpike will have provided a total of $750 million in new funding for local roads, bridges and mass transit agencies around the state. Over the 50 years of Act 44, the Turnpike will provide PennDOT with annual average payments of $1.67 billion per year – a total of $83.3 billion.

The financial model underlying Act 44 provides for toll increases on the existing Turnpike system of 25 percent effective January, 2009 and up to three-percent in each following year. In addition, the Turnpike and PennDOT have filed an application with the Federal Highway Administration (FHWA) seeking permission to toll Interstate 80.

Under Act 44, roughly two thirds of all new transportation revenue will be generated by users of the current Turnpike system. The remainder will be generated by new tolls to be collected on I-80, if federal approval is granted.

“Act 44 is fair. Act 44 is equitable and Act 44 is working,” Brimmeier said, adding:

“Now that the administration has finally decided to share some of the details concerning its process – though there are many questions still to be answered – we look forward to sharing our perspective with the public and with members of the General Assembly. We are surprised that the administration expects to pick a winning bidder within the next two weeks and will push for legislation to be passed within a month. The stakes are far too high for such a rush job.”

Brimmeier pointed out that the five-page summary provided to the media today raises more questions than it answers, including:

  • What will the impact be on the Commonwealth’s 73 mass transit agencies, which have already started to see the benefits of Act 44? (Act 44 provides mass transit with $37 billion in the next 50 years.)

  • What is the Commonwealth’s plan for the inevitable reconstruction of I-80 (the need for which will now be accelerated due to the diverted traffic from the mainline of the Turnpike)?

  • What will happen to the Southern Beltway and the Mon-Fayette Expressway, which are specifically exempted from the lease proposal?

  • Where is the proposed concession agreement containing the operating standards and other critical provisions? Why does the Rendell administration continue to refuse to release this information? Clearly, a draft concession agreement has been provided to potential bidders. Why not to the public?

  • As Turnpike tolls rise – which will happen under Act 44 and any lease scenario – how will the Commonwealth manage the diversion of traffic to Interstate 80? (Under Act 44, tolls on I-80 will mirror those on the Turnpike mainline.)

  • Will the winning bidder be held responsible for any capital improvements for projects required after the first 10 years of the lease? (Obviously, capital improvements will be required beyond the 10-year period outlined in the lease agreement.)

  • How will the administration ensure that any lump-sum payment for the lease agreement will be properly invested and safeguarded against re-direction for non-transportation purposes?

  • What will happen in the event of a default by the concessionaire? Will its creditors have the ability to step in?