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Last, best turnpike offers solicited

| Tuesday, May 13, 2008

HARRISBURG -- Pennsylvania received multiple bids from companies wanting to lease its turnpike but has given at least some bidders until the end of this week to produce a final offer, Gov. Ed Rendell said Monday.

Rendell declined to say how many companies submitted bids, mentioning three but refusing to confirm that number, and would not make public their names. He said he would announce a winner next week. Fourteen consortiums initially expressed interest.

Because some bids were within 10 percent of one another, "we are obligated to solicit best-and-final offers due this week," Rendell said. That was specified in the bidding procedure for a 75-year lease, his office said.

"The bids are sufficient that I believe the Legislature has to give this a hard look," Rendell said. But he noted that because of financial turmoil in lending markets, the bids aren't as high as they could have been.

"I guess I'm just curious about this process, how we now have three bids, and now we have a week to get another bid," said Senate President Pro Tempore Joe Scarnati, a Jefferson County Republican.

Sen. Barry Stout, of Washington County, ranking Democrat on the Senate Transportation Committee, said he doubts there's enough time for the Legislature to analyze the bids before adjourning for the summer.

"Between now and the end of June, we have to adopt a budget. You get crunched for time. I don't think there's enough time between now and the 30th of June," Stout said.

The Wall Street Journal reported that two groups -- one led by Spanish toll-road operator Abertis Infraestructuras SA, and the other by Spain's Cintra Concesiones de Infraestructura de Transporte SA and Australia's Macquarie Infrastructure Group -- are among those submitting bids.

Foreign bidders' involvement concerns Rep. Daryl Metcalfe, a Cranberry Republican who typically favors privatizing state government functions but opposes a turnpike lease.

"I don't trust this administration and this governor to have the long-term interests of taxpayers in mind," Metcalfe said. The turnpike "is the foundation of our infrastructure, paid for over decades by taxpayers and drivers of Pennsylvania." He added that he doesn't want to turn it over to "a foreign entity to profit."

But, said Rendell: "I can't choose an American company over a foreign company. None of these bids are without American participation."

Rendell wants to lease the turnpike to produce money to pay for highways, bridges and mass transit. The governor's financial adviser on the project, Morgan Stanley, last year estimated the bids could range from $12 billion to $18 billion. Rendell lobbied for a lease then but couldn't get legislative interest.

Matthew Brouillette, president of the conservative Commonwealth Foundation, said it's likely the "General Assembly's failure to act on the lease proposal in 2007 has cost the state billions of dollars in transportation project revenue."

But, countered Rep. Tom Caltagirone, a Reading Democrat and longtime Rendell supporter: "Why would you want to sell the family jewels• I'd never support anything like that."

The Legislature in July approved Act 44 to pay for road, bridge and transit projects but would repeal the law if it approves a turnpike lease.

Act 44 is based on borrowing by the Turnpike Commission, higher turnpike fares and placing tolls on Interstate 80. The federal government hasn't approved tolling I-80, but Rendell said he would submit paperwork by week's end and ask U.S. Transportation Secretary Mary Peters for a quick decision.

House Transportation Chairman Joe Markosek, a Monroeville Democrat who opposes a lease, said he was pleased Rendell "has authorized an expedited review of Pennsylvania's application for the tolling of I-80."

Rendell acknowledged it might be difficult for lawmakers to approve a lease before their summer recess and said the state would have to arrange for the winning bidder to extend the bid into fall when lawmakers return.

Like Scarnati, Stout wants time to review the bids.

"What I'd like to know is, who are the people that are going to submit bids, and what are the bids they're offering, and what are the terms and conditions?" Stout said. "Right now, I can't say I know anything about it. I'm really frustrated."

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