From Toll Road News:
With a bid of $12.8 billion an Abertis/Citi team has been selected as the concessionaire in a 75 year lease of the Pennsylvania Turnpike. The bids were received in a second round of best-&-final offer bids last Friday (May 16). #2 bidder was Transurban/Goldman Sachs at $12.1b.
With this kind of cash, it’s going to be very tempting for more states to privatize to keep budgets afloat. I worry about how much wasteful spending today’s politicians plan to do after they get this windfall. It’s also a shame it’s a 75 year lease not a sale. This gives the state some authority to maintain some patronage, cap toll increases, and keep unions happy.
I think the most important question to ask is: if they wanted, could they tear up the road and built whatever they wanted in its place? For example, could they turn a ten-lane highway into a two-lane highway, add one line of rail in each direction, and develop the remainder as real estate? If, as I suspect, the contract doesn’t allow them to do anything but maintain the current structure (and possibly add onto it more auto lanes), then it’s very, very far from being privately owned.
I think the most important question to ask is: if they wanted, could they tear up the road and built whatever they wanted in its place? For example, could they turn a ten-lane highway into a two-lane highway, add one line of rail in each direction, and develop the remainder as real estate? If, as I suspect, the contract doesn’t allow them to do anything but maintain the current structure (and possibly add onto it more auto lanes), then it’s very, very far from being privately owned.