Pennsylvania will not revisit turnpike privatisation

A recent audit savaged state handling of the Pennsylvania Turnpike saying it is 'sinking in debt'. But no matter what, the Quaker State will not rethink its 2008 decision against privatisation.

Pennsylvania will not reconsider privatising its turnpike even in the face of a scathing report that blamed the state department of transportation for almost bankrupting the road.

“[Privatisation] is not on the table,” said Kelli Roberts, a spokesman for governor Tom Corbett.

Roberts echoed Roger Nutt, turnpike commission chief executive officer, who hit back when state auditor general Jack Wagner claimed the Pennsylvania Department of Transportation, or PennDOT, is driving the road into debt via unfair borrowing. Roberts claimed the turnpike has the power to borrow, while Nutt has insisted the commission is “in healthy financial condition”.

In his report, Wagner said the turnpike is “sinking in debt” because of an 2007 law called Act 44 that let PennDOT borrow $3 billion between 2007 and 2011, or $450 million annually, on the back of the turnpike. According to Wagner, Act 44 has increased debt on the turnpike from $2.9 billion to $7.3 billion, putting the taxpayer “on the hook”. 

Then-governor Ed Rendell in 2007 agreed to pass Act 44, which Wagner blamed for allowing PennDOT to place what he called “onerous” debt on the turnpike. Rendell in 2010 told Infrastructure Investor he viewed Act 44 as an innovative financing solution, which increased tolling on the 537-mile-long turnpike.

Rendell went on to tell Infrastructure Investor he also championed privatising the turnpike. A consortium led by Spanish developer Abertis offered $12.8 billion for a 75-year concession on the turnpike in 2008. But political opposition prevented the leasing.

A commission assembled by governor Corbett in December hired Greenhill & Company, a boutique investment bank headquartered in New York, with an expertise in debt restructuring, to assist in exploring a possible public-private partnership programme to help fund infrastructure across the Quaker State.

Greenhill in February hired former governor Rendell as a “special adviser”. Rendell, a Democrat, was replaced by Corbett, a Republican, in a 2010 election for governor.