Crazy Uncle Sam's Going-Out-of-Business Sale: All Items MUST GO!: Today, the Penn Turnpike

[marmar]

from Bloomberg:



Pennsylvania Offered $12.8 Billion by Citi, Abertis (Update1)

By Adam L. Cataldo

May 19 (Bloomberg) -- Pennsylvania officials said a $12.8 billion bid by Citigroup Inc. and Abertis Infraestructuras SA was the winner of a 75-year lease to operate and collect fares on the state's only toll road in what would be the biggest agreement of its kind in the U.S.

Rendell first proposed leasing the Turnpike last year and dropped his plan in the face of opposition from the Legislature. Rendell is a Democrat and his party controls the House of Representatives. Republicans control the Senate.

To fund transportation spending the Legislature passed and Rendell signed into law Act 44, which allowed the state to establish tolls on the 311-mile I-80. That road, which also runs east-west across the northern part of the state, is opposed by elected officials, including U.S. Representatives John E. Peterson and Phil English, both Republicans.

That opposition caused Rendell to revive his Turnpike leasing plan less than a month after signing the bill. Pennsylvania won't lease the Turnpike if putting tolls on I-80 is approved, Rendell has said.

The driver of a passenger vehicle pays $22.75 to travel 358 miles on the Turnpike from Pennsylvania's border with Ohio to the New Jersey state line. That trip will increase under the terms of the agreement set by the state to at least $36.40 in 10 years. .....(more)

The complete piece is at: http://www.bloomberg.com/apps/news?pid=20601087&sid=aoJuQlSfRjWw&refer=home

[Mojorabbit]

1. Are they going to maintain

the road as a condition of the lease?

[stellanoir]

2. Taking highway robbery to entirely new heights.

Yikes

[izquierdista]

3. Rendell is a Democrat?

And where is the evidence of this?

[marmar]

5. He plays one on TV.

n/t

[EstimatedProphet]

4. For god's sake! Citibank is going to own a highway now?

Look for tolls to go up tremendously. Look for new penalties too, like a $15 fee for going farther on the road than intended, and a $20 fee for using the road at night.

[LynneSin]

6. So Rendell will sell off the turnpikes and yet PA still has the antiquated State Liquor Stores

It was so nice to move to Delaware where liquor stores are independantly run and the selection is way better than what you would find in any State Store in PA. No wonder Total Wine in Wilmington off of Naaman's Road is the 2nd largest Liquor store in the COUNTRY - we have all that business from PA coming to buy cheaper alcohol.

[AngryAmish]

8. That is a great argument you have for nationalized health care there

[AngryAmish]

7. Chicago leased the Skyway

This is the way it works. Company buys toll road. Puts money into the Toll road initially (Skyway is great now). Tolls are frozen for a few years then go up, more increases at the end of the lease. When people complain then, the company can say you agreed to it years ago. Who benefits? Politicians get a lump of cash right now to fix problems and look good, getting reelected. They will be out of office when the tolls get raised and everyone forgets. Taxpayers get road maintenance off the books. Company, well, they will make a killing.

Actually one of the main driving forces in these deals are private law firms and investment houses. They either resecuritize or buy back existing bonds on the roads, get paid for doing the deal and other ways. Ever wonder why so many lawyers and investment bankers give so much money to politicians? It is because they make money on the work, which is not straight graft but it smells.

Find out which law firms and investment Banks give the most money to Rendell and you will find out who is doing the bond work and legal work on this deal. G-R-A-F-T, but with private money. It stinks and it is a crooked game, but it is legal.

[LynneSin]

9. But Rendell isn't up for re-election

his term is done in 2010

[AngryAmish]

11. Will he run again?

Where is he going to work after his term?

Who does his wife/son/daughter work for?

Trust me, someone is making sure he gets paid.

[LynneSin]

12. His wife is a District Judge in the Philadelphia area

I haven't figured out what his son did. Midge Rendell was not allowed to campaign with her husband because she's a judge.

[SteelPenguin]

10. I wouldn't mind, if there were a local exemption

My main problem with this isn't the privatization so much as how it will affect the local people who use that road. It's a fairly low density region, and that road for many people is a daily normal route.

The problem is that it's also a heavily trafficed east west truck route which severely damages the road causing it to need frequent repairs which come out of everyone's pockets, but the truckers who don't even stop in the state pay nothing. We pay taxes to repair damages from peopel who never set foot here.

Making it a turnpike on the other hand puts the repair costs squarely on the users, and the trucks heading to and from NYC which damage the road the most. However it also puts a daily tax on the local residents as well.

Then finally we have this solution from Philadelphia (not Harrisburg, don't kid yourself). Lease the road for cash to a private organization, who then taxes the individuals, and the state gets money they can do whatever they want for. They see it as a tax on rural citizens to pay for urban citizens, and they wouldn't be wrong.

I dont' know what a fair solution would be.

[trof]

13. 'Selling their birthright for a bowl of porridge.'

I don't know why, but that just came to mind.
Sacrificing long term benefits for instant gratification.

[elizfeelinggreat]

14. welcome to our world - Texas

Selling toll roads that taxes had already paid for is a big attention getter here, although many people are thrilled to pay the toll so they don't have to travel with the hoi polloi.

Governor Perry has said: “Members passed a moratorium on privately financed roads but exempted every road that would conceivably be built using private financing during the next two years.” The exclusions cover specific projects in the Dallas/Fort Worth, San Antonio, Houston, El Paso, and Grayson County area, and the southernmost end of proposed I-69.

That's from the Baker Botts website (you can imagine their take on it)
http://www.bakerbotts.com/file_upload/TexasLegislativeDevelopmentsMoratoriumonPrivately-ManagedTollRoads.htm


And this is from the Dallas Morning News last year:

Klaus "Sonny" Brown of San Antonio-based Zachry Construction Co., quoted in The Dallas Morning News about legislation that was supposed to slow the use of tolls roads in Texas: "I read SB 792 about 12 times. Happily, it was Swiss-cheesed with loopholes. I read it to find out whether I still had a business or not."

and this about the company they planned on selling the highway to before the uproar (either way, the taxpayers who were promised NO TOLL after the road was built were screwed):

The North Texas Regional Transportation Council will hear presentations tomorrow from two bidders for the $5 billion State Highway 121 toll project in Denton and Collin counties, north of Dallas.

Private developer Cintra, Concessiones Infraestructuras de Transporte of Spain will compete with a proposal from the North Texas Tollway Authority, a subdivision of the state.

[WinkyDink]

15. Trust me; this is the FIRST time any local media have mentioned SPAIN as the leaser/owner.

We are selling our very infrastructure to FOREIGNERS.

No wonder my Governor has only Republican allies on this one.

[Javaman]

16. "we have 50 states up for sale! They all must go! I will now open up

bidding for the first state on the block! Utah! We state the bidding at $10 million..."

[ensho]

17. Pennsylvania will be sorry

oh well, it will soon cost too much to even drive on the turnpike.