Bidders to lease turnpike get time to generate final offer

The winning bidder to lease the Pennsylvania Turnpike would have to post a $100 million letter of credit that could be forfeited if the Legislature signs off on a deal, but the bidder backs out.

By MARK SCOLFORO
The Associated Press

5/12/2008

HARRISBURG, Pa. — Bids to lease the Pennsylvania Turnpike on a long-term basis came in so close to each other that at least some of the bidders have been given five more days to sweeten the pot.

Gov. Ed Rendell said Monday that the highest bid to be submitted by Friday's deadline and all other bidders that are at least 90 percent of the highest bid have until the end of the work week to make a best and final offer.

The governor did not say how high the current bids are or how many qualified for the additional time.

Rendell said he was happy with the results so far.

"Given what's happened to the market recently, absolutely," he said at a news conference to announce the delay.

Rendell plans to submit the largest bid to the General Assembly for its consideration, but acknowledged Monday that his hopes for legislative action by the end of June might no longer be realistic.

The winning bidder would have to post a $100 million letter of credit that could be forfeited if the Legislature signs off on a deal, but the bidder backs out.

Rendell has proposed a 75-year lease of 500 miles of the turnpike system to raise billions of dollars to repair crumbling roadways, rebuild decaying bridges and help subsidize mass transit costs.

A long-term turnpike lease would replace the multi-billion-dollar transportation funding law that passed the General Assembly last summer. That law would add tolls to Interstate 80, among other things, and has engendered bitter opposition among the people and businesses located along the major east-west artery.

Rendell said he was pushing to have the Pennsylvania Turnpike Commission and the Transportation Department submit documents by the end of this week to the federal authorities who will be approving or rejecting the I-80 tolling conversion. He said he will ask U.S. Transportation Department Secretary Mary Peters to expedite consideration of the I-80 tolling plan.

Under terms of the turnpike lease Rendell has proposed, the operator could increase tolls by 25 percent early next year and then annually by 2.5 percent or the consumer price index, whichever is higher.