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 US$12.8 billion, beating their nearest competitor by US$700 million, Governor Ed Rendell said on 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. “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 800km of the turnpike system to raise billions for Pennsylvania’s transportation needs.
He predicted the Abertis-Citi deal would generate an average of US$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.