Abertis/Citi extend Penn Pike $12.8b offer to end of Sept
Posted on Thu, 2008-07-24 22:23
Pennsylvania Transportation Partners comprising Abertis (58.3%) and Citi (41.7%) have extended their offer to the state of Pennsylvania of $12.8 billion for a 75 year lease of the Pennsylvania Turnpike to September 30. The extension is designed to give the state legislature time to enact enabling
legislation in their short Fall session mid-September.
A bill, HB2593 has been written but not acted upon. The concession contract is finalized so the concession - the biggest in US history - could quickly be implemented.
It is still said however by observers of the state legislature that the numbers are not there to pass enabling legislation. The Turnpike Commission has too much political clout.
The legislator who would normally advance such a bill, the chairman of the state house transportation committee Joe Markosek is adamantly opposed and has said he won't allow it to be considered in his committee.
It could be introduced by another committee - such as finance - but it's not clear other committee chairmen are motivated to do that.
The lease is strongly championed by Governor Ed Rendell whose administration conducted a competitive procurement based on a detailed concession contract in the spring.
Abertis/Citi with $12.8b was announced as the high bidder May 16. Transurban/Goldman Sachs bid $12.1b. Cintra/Macquarie the most active private toll operators elsewhere in the US were well back with $8.14b.
The Abertis/Citi offer was initially only binding through June 20, near which date it was then extended to July 20.
Gov Rendell has said in a statement: "I look forward to the Legislature revisiting the transportation funding issue in the fall and considering the $12.8 billion bid we have received for the lease of the Pennsylvania Turnpike."
Jordi Graells of Abertis is quoted as saying: "Momentum clearly favors the lease, so the decision to extend through September was an easy one."
He is apparently encouraged by the growth of support for the lease in the local press as well as indications some state legislators are rejecting the Turnpike Commission's arguments.
The Commission's active role in pressing to toll I-80 has alienated some PTC support.
SUMMARY: the odds are shortening somewhat but at this point they are about 2/1 against the legislation.
see our report of the selection of Abertis/Citi:
http://www.tollroadsnews.com/node/3547
see the Abertis/Citi website:
www.penntransportation.com
The Turnpike Commission's opposition is articulated here:
http://www.paturnpike.com/straighttalk/
The Commonwealth Foundation a Harrisburg thinktank and leading critic of the Turnpike Commission is here:
http://www.commonwealthfoundation.org/ and
TOLLROADSnews 2008-07-24