Bush official promotes Rendell's push to lease Pa. Turnpike

HARRISBURG - Gov. Rendell enlisted the Bush administration yesterday in his push to get wary legislators to agree to privatize the Pennsylvania Turnpike.

Rendell, a Democrat, appeared with U.S. Transportation Secretary Mary E. Peters to extol the benefits of a proposal to lease the turnpike, an arrangement Rendell hopes will provide nearly $1 billion a year for the state's highway network.

"This partnership," Peters said at a news conference in the state Capitol's rotunda, "could generate billions of dollars that could be used to repair deteriorating roads and bridges, and free up money for construction and keep the state moving both now and into the future."

Rendell hopes to exchange the future revenue promised by the turnpike's tolls for a payment of billions of dollars upfront. Theoretically, the state would invest that money and use the gains to help pay for repairs to the thousands of bridges and miles of state highway that are in poor condition.

Rendell sought to add urgency to his proposal, saying that federal highway dollars are expected to decline in 2010, and that hefty state funding increases have hardly shortened the state's long list of repairs.

"We cannot wait for someone to come to our rescue," Rendell said.

Peters warned that a sound transportation network was crucial to economic prosperity.

"Please don't wait for the federal government to ride in and fix this, because . . . there's not enough money to do that," she said.

She stressed the tax advantages of leasing a public asset. For instance, the federal government in 2005 tried to encourage such private investment by allowing tax-exempt bonds to finance projects by private operators and developers on highways and rail routes supported by federal money.

The expectation is that a company could earn a solid return on the turnpike by raising tolls, improving traffic flow and cutting costs. Toll payers, including trucking companies and out-of-state drivers, would shoulder the burden of new highway funding in Pennsylvania.

Chicago and Indiana pioneered the idea in the United States in the last two years. New Jersey is considering leasing the New Jersey Turnpike and Garden State Parkway.

Critics question whether it is wiser to retain control of the tolls - about $600 million a year on the Pennsylvania Turnpike - and borrow against the future revenue to raise cash.

Rendell cannot invite offers or hold an auction until the legislature gives him the authority to lease the 66-year-old toll road.

The House's Republican leader, Sam Smith of Jefferson County, said lawmakers should not be rushed into authorizing a lease.

"From what I know of the governor's proposal, I've got pretty much yellow caution flags flying," Smith told reporters at an unrelated news conference. "I think there are a lot of variables and different models of public-private partnerships."