Pennsylvania Turnpike lease numbers too good to be true
Democratic state senator analyzes the deal in detail.
by Sean Logan, The Morning Call
May 28, 2008 — The Rendell Administration's proposed deal to lease the Pennsylvania Turnpike to a Spanish firm and invest the proceeds for state transportation funds greatly exaggerates both the true value of the bid and the money the state will earn on that lease payment over the long term.
Gov. Ed Rendell claims that Abertis would pay the state $12.8 billion for a 75-year lease of the Turnpike, which would yield $1.1 billion per year over the first 10 years for highways, bridges and mass transit. The real net value of the bid is actually much less — about $9.6 billion, with the state more likely to earn only an average of $605 million annually to spend on transportation in the first 10 years. That is nearly $350 million less than it expects to realize under the Act 44 transportation plan passed last year.
The administration's rosy financial scenario fails to account for important relevant factors, and it makes actuarial assumptions for future earnings that are so optimistic as to be fiscally irresponsible. . .
Sean Logan is a Democratic state senator who represents portions of Allegheny and Westmoreland counties. He is a member of the Senate Appropriations Committee.
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Turnpike lease numbers are too good to be true, by Sean Logan, The Morning Call, May 28, 2008
Posted: May 29, 2008
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