Highway for Sale: A State's Route to Billions

May 19, 2008— -- HARRISBURG, Pa. (AP) -- 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 75 years.

Barcelona-based Abertis Infraestructuras, Abertis partner Criteria CaixaCorp of Spain and Citi Infrastructure Investors offered $12.8 billion -- $700 million more than their nearest competitor, Gov. Ed Rendell told a Monday news conference.

Rendell said he was "strongly in favor of it," but the Legislature must approve any deal.

The governor has pursued the plan to have a private entity operate and maintain 500 miles of the turnpike system to raise billions for Pennsylvania's transportation needs.

The turnpike's operating revenue was $608 million in the fiscal year that ended last May, and the deal would let the operator increase tolls 25 percent in January, and then by 2.5 percent or an amount equal to consumer price inflation subsequently.

Rendell predicted the Abertis-Citi deal would generate an average of $1.1 billion a year for roads, bridges and mass transit in the first 10 years.

If the deal goes through, the state would almost certainly abandon plans to introduce tolls to Interstate 80.

Rendell said the two losing bidders were teams consisting of Goldman, Sachs & Co. and Transurban Group of Australia; and of the Macquarie Infrastructure Group of Australia and Cintra of Spain.

The state has not yet received federal approval to put tolls on I-80.

Carl DeFebo, a spokesman for the Pennsylvania Turnpike Commission, said additional information federal regulators want as they consider whether to approve I-80 tolls will be probably not be ready in the coming days.

He says the timetable is more like "weeks or months."