Pa. officials to debate offer of $12.8B to lease turnpike

This deal could end plans to put tolls on Interstate 80.

HARRISBURG, Pa. (AP) — A Spanish company and a unit of Citigroup Inc. teamed up to submit the largest bid for the right to lease the Pennsylvania Turnpike for the next 75 years.

Barcelona-based Abertis Infraestructuras, Abertis investor Criteria CaixaCorp of Spain and Citi Infrastructure Investors offered $12.8 billion, beating their nearest competitor by $700 million, Gov. Ed Rendell said Monday.

Rendell described himself as “strongly in favor of it.” But the Legislature must approve any deal, and one leader in the Democratic-controlled House said he was not impressed with the bid.

“To be quite candid, the number is less than overwhelming,” said Majority Whip Keith McCall, D-Carbon. “It’s certainly not dead on arrival, but it’s something we do need to discuss with the entire caucus.”

The Democratic governor has pursued the plan to have a private entity operate and maintain 500 miles of the turnpike system to raise billions for Pennsylvania’s transportation needs.

He predicted the Abertis-Citi deal would generate an average of $1.1 billion a year in the first 10 years — income from the investment of the lump-sum lease payment — for roads, bridges and mass transit.

The lease deal also would let the private operator increase tolls by 25 percent in January, and in future years by either 2.5 percent or the consumer price index, whichever is greater.

If the deal goes through, the state would almost certainly abandon a plan to introduce tolls to Interstate 80 that are expected to generate about $500 million a year. The tolls were the primary component of a law passed last summer that is expected to produce about $940 million annually for transportation needs.

Repealing those tolls has become a priority for many people and businesses along the highway, as well as the lawmakers who represent them.

Abertis directly manages more than 2,000 miles of toll roads in other countries; it also manages a toll bridge in Puerto Rico and airport facilities in California, Florida and Georgia.

McCall said he was concerned that the turnpike lease, unlike the I-80 tolls, did not provide a dedicated funding source for the state’s cash-starved mass transit systems.

“It’s a very, very big deal and it affects all 67 counties,” McCall said.

Rendell spokesman Chuck Ardo said McCall was “one step ahead of the process,” and that decisions about how to allocate the lease proceeds will be made later on.