Ohio delays shortlisting turnpike advisors

Macquarie, KPMG, Greenhill, Citigroup, Morgan Stanley and others will have to wait an extra three weeks to find out if they will be shortlisted to advise the state government on the possible lease of the 241-mile Ohio Turnpike. Ohio had planned to issue a shortlist of advisors last week.

The Ohio Department of Transportation (ODOT) has decided to take an extra three weeks to evaluate the 14 responses it has received from groups interested in advising the state on a potential lease of the Ohio Turnpike.

ODOT, together with the Ohio Office of Budget and Management (OBM), issued a request for letters of interest from potential consultants in August, and set a deadline to receive all replies by August 24. ODOT planned to announce a shortlist of bidders on September 2, but has pushed back the announcement until September 23. 

The list of respondents to ODOT’s request for letters of interest includes: investment bank Greenhill & Co, advisory firms Public Financial Management and KPMG, Macquarie, Citigroup Global Markets, Morgan Stanley, UBS Investment Bank, and law firm Ice Miller.

Last Thursday, ODOT director Jerry Wray said in a statement that the state would need extra time given the fact that the private sector response was larger than expected.

“We remain very committed to this idea and to studying it right, but it’s admittedly a controversial idea for some people, so we’re trying to go out of our way to be transparent about the process and provide updates as the process moves and adjusts, as it is now,” Wray said.

The successful consultant will advise ODOT and OBM on various phases of the Turnpike privatisation process, including valuing a potential lease of the 241-mile toll road, advising on drafting a request for proposals, and establishing a process by which to choose the final bidder, according to the request for letters of interest.

Ohio Republican Governor John Kasich signed a two-year, $56 billion state budget that included a provision allowing ODOT and OBM to privatise the Turnpike earlier this year. Following the budget signing, Kasich said in a press conference that the lease could fetch about $3 billion, netting the state about $2.5 billion after debt on the Turnpike had been paid off. 

The Turnpike had 2010 toll revenues of $232.5 million, according to the Ohio Turnpike Commission's most recent annual report.

Presentations from the shortlisted bidders are tentatively scheduled for November 9, according to an ODOT statement.