Ohio Governor renews call for turnpike privatisation

Governor John Kasich re-pitched the idea of leasing the state’s 241-mile toll road as he signed into law a $6.8bn transportation budget that also included provisions enabling PPPs. However, he cautioned that there is ‘no commitment on that yet’.

Ohio Governor John Kasich renewed his call to privatise the state’s 241-mile turnpike, calling it a “public-private endeavor” that could help the state raise $2.5 billion for infrastructure, education and other priorities.

“If we could lease the turnpike, let’s just again do round numbers, around $3 billion dollars, and have approximately $2.5 billion dollars, free and clear, you could put a billion dollars into infrastructure,” Kasich said during a bill signing ceremony for the state’s $6.8 billion transportation budget last Wednesday.

Kasich, a Republican, previously pitched the idea at a February meeting of the Ohio Newspaper Association in Columbus, the state capital. At that meeting he also mentioned a $3 billion valuation for the toll road which, net of $600 million in outstanding debt, would leave Ohio with $2.5 billion in proceeds.

At the signing ceremony for the transportation budget – which included provisions allowing public-private partnerships for transportation projects – Kasich said he’d use $1 billion of the $2.5 billion for infrastructure projects such as dredging harbours in Cleveland and Toledo to allow for larger ship traffic.

“Then, you know, we’d have another billion and a half left,” he continued. “And we would not want to spend it of course in one fell swoop but we could think about things,” Kasich added, pointing to low-interest loans and tuition discounts as one possible initiative that could be funded with the money.

Indiana Governor Mitch Daniels, a Republican, leased his state’s 167-mile turnpike in 2006 for approximately $3.8 billion and used the net proceeds to fund transportation projects all across the state.

In May 2008, former Pennsylvania Governor Ed Rendell, a Democrat, attracted a $12.8 billion bid for his state’s 537-mile turnpike. But the deal fell apart a few months later because the legislature did not approve the deal.

In Ohio, Kasich made clear, any potential lease is still simply an idea being considered.

“No commitment on that yet – it’s just something to think about, another public-private endeavor where we could get ourselves in a position where Ohio can do very well,” Kasich said.