Governor Ed Rendell (Dem) has announced a decision in favor of privatizing the business of the Pennsylvania Turnpike with a toll concession as part of what he calls as "longterm comprehensive and innovative plan to address the long standing financial crisis" facing transport in the state.

The announcement of the plan to proceed to longterm leasing of the Turnpike is the first measure mentioned in a press release from his state Department of Transportation (PENNDOT) this afternoon.

It reads:

"The commonwealth (state) would develop a plan to take advantage of the value of the Pennsylvania Turnpike through a private leasing agreement. The proceeds would be used to create a new revenue stream for transportation projects. Preliminary estimates show this could produce as much as $965 million a year for transportation."

In addition the governor proposes a new oil company gross profits tax of 6.17% on company profits in Pennsylvania. Rendell says the attorney-general will see that the costs of the tax are not passed on to motorists.

Of the toll concession or 'lease' as it is being called the statements adds: "Governor Rendell said that any lease of the turnpike must include protections of the public's interest, such as constraints on toll increases and excellent maintenance standards."

The proceeds of $1.7b extra per year total, apparently split $965m annual concession fees and $735m in new oil company taxes will go to a program of bridge upgrades, better pavement, and putting transit "on a firmer financial footing" while buying new vehicles and other equipment.

The announcement foreshadows part of the governor's 2007-2008 budget address this evening.

The Governor has apparently rejected a proposal by the Pennsylvania Turnpike Commission, present state operators of the Turnpike that they be allowed to toll new roads, and otherwise be freed of constraints to generate funds for the state.

Pennsylvania DOT will apparently be in charge of the privatization of the Turnpike business.

There is apparently support for turnpike concessioning among the leadership on both sides of the legislature so enabling legislation should proceed. The prospects look much less promising in New Jersey.

Penn Pike

The Pennsylvania Turnpike is America's oldest automobile era tollroad system and was an inspiration for a score of other major tollroad systems in the 1940s and 1950s and indeed for the initiation of the interstate system of expressways spanning the nation.

The Turnpike the first major segment from near Pittsburgh (Irwin) to near Harrisburg (Carlisle) opened in 1940. It now comprises:

- 579km (360mi) east-west mainline running NJ-OH via the Philadelphia, Harrisburg and Pittsburgh metro areas, designated I-276, I-76. I-70

- 177km (110mi) Northeast Extension, northern Philadalephia area to Scranton in the northeast of the state, I-476

- 26km (16mi) Beaver Valley Expressway PA66Toll north of Pittsburgh

- 21km (13mi) Greensburg or Hutchinson Bypass PA60Toll east of Pittsbugh

- Mon-Fayette Expressway PA43Toll and Southern Beltway PA60Toll under slow construction south and west of Pittsburgh some 105km (65mi) when complete, a $3.8b project

The Turnpike records 59 interchanges in its network which is a mix of 2x2 lane and 2x3 lane expressway.

The Pennsylvania Turnpike was a founding member of the E-ZPass Inter Agency Group but a bit later than others, doing its first electronic toll transaction Dec 2 2000. 41.9% of transactions were by transponder in FY2006, and the Turnpike has a number of highway speed open road toll points. The "ticket" system used on most of the Turnpike has toll points mostly located on entries and exits for trip style tolling.

The state has 12m population. Its rugged topography makes road construction expensive and there are five major tunnels in the system.

FY2006 revenues of $612m

FY2006 accounts recently published show operating revenues of $612m of which tolls (called 'fares' by the PTC) were $589m against which are counted operating costs of $365m and depreciation of $215m. Tolls were increased substantially Aug 1 2004 and FY2006 to end May was the first full year of current toll rates. Bond debt outstanding was $2,393m May 31 2006.

In 2006 there were an average 509k toll transactions/ day on the Turnpike system and a total of 9.17b vehicle-km (5.7b veh miles) were run on the system in FY2006, about ten percent below each of the New Jersey Turnpike and the Garden State Parkway in NJ.

The Turnpike employed 2,259 employees in FY2006.

Other private tollroads include

Investor owned toll concessions in the US include:

- Ambassador Bridge, Detroit-Windsor the largest truck route US-Canada, privately built and owned under a charter in perpetuity issued by the City of Detroit since it opened in 1929

- Dulles Greenway, Virginia opened Aug 1995, the concession owned now by Macquarie of Sydney Australia

- Chicago Skyway, from Jan 2005 operated by Cintra (Spain)/Macquarie concession

- Pocahontas Parkway, Richmond Virginia operated under concession by Transurban of Melbourne Australia from end June 2006 after a not-for-profit association failed

- Indiana Toll Road, from June 28 2006 operated under Cintra/Macquarie concession

- South Bay Expressway, San Diego, due to open this year Macquarie owns concession

Scores of other toll concession developments are in negotiation, planned, or being considered in Texas, Florida, Georgia, Virginia, and other states.

TOLLROADSnews 2007-02-06