The Buckeye State has chosen advisory firm KPMG to help determine the best way to monetise the 241-mile Ohio Turnpike, as it seeks “to cope with shrinking resources to maintain and expand Ohio’s highways,” the state government announced this week.
KPMG beat competition from Citigroup, Public Financial Management, Macquarie and Morgan Stanley and has until next July to tell the state how best to leverage the Turnpike. Ohio Department of Transportation (ODOT) director Jerry Wray said KPMG’s “final recommendation could be anything from leaving the Turnpike in its current form; to moving it under ODOT; to leasing it to a private operator; to options Ohio perhaps hasn’t yet considered”.
Ohio is eager to find out if privatising the turnpike might generate enough revenue to improve infrastructure state-wide. Governor John Kasich has estimated Ohio could rake in $2.5 billion from leasing the thoroughfare and then use that income to finance “desperately” needed infrastructure work. According to Kasich, Ohio is running out of money to fix its infrastructure.
That sentiment is echoed by Wray, who acknowledged that “the cost of repairing and expanding Ohio’s highways is outpacing funding, while the availability of federal highway funds is increasingly unpredictable”. Wray sees “the Turnpike [as] a hugely valuable untapped asset”. Currently, the toll road is capable of generating approximately $230 million in annual revenue.
ODOT will finalise its contract with KPMG by the end of the year.