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Gov. Rendell Looks at Idea of

Fri June 23, 2006 - Northeast Edition
CEG



HARRISBURG, PA (AP) Gov. Ed Rendell said his administration has had discussions over the past couple of months with private groups about such groups paying the state to take control of highways or railroads.

Indiana and Chicago have taken such steps with major roadways, and that kind of transaction could mean immediate money for building and improving transportation projects, Rendell said.

“This would be a great way to get money to put into immediate repair or construction,” Rendell told reporters May 15 after speaking to a central Pennsylvania business group.

Rendell has been looking to find more money for the state’s struggling mass transit systems and its aging bridges and highways. The idea is being looked at by a growing number of states, as well as by some state lawmakers in Pennsylvania.

Such a transaction with a private company can work in various ways. Generally, a private investor would pay the state to assume control of a highway or rail route, then recoup the cost of the upfront payment, plus interest, by raising tolls or usage fees over the life of the agreement.

An agreement can last dozens of years — Indiana has agreed to lease a 157-mi. toll road for 75 years for $3.8 billion while Chicago agreed to a 99-year lease of the Chicago Skyway for $1.82 billion. Both projects were leased to a Spanish-Australian consortium, Cintra-Macquarie.

Rendell said it would be at least a year before his administration reaches a decision on whether the idea is feasible. Then, any proposal would need to go through the Legislature, he said.

Theoretically, the state could lease an existing roadway, or it could allow a private company to expand an existing road and collect tolls only on the expanded portion. It also could commission an operator to build an entirely new roadway.

Rendell also raised the prospect of the state involving a private company in a railway, such as a proposed Philadelphia-to-Reading line called the Schuylkill Valley Metro.

“Right now, building seems to be a real challenge because there’s not enough federal money in the transportation bill to make it a reality,” Rendell said. “Would somebody be willing to build a Schuylkill Valley Metro for us and take it over?”

Rendell would not identify the parties his administration has spoken with, but called them investment bankers and foreign groups.