Penn. receives strong interest in Turnpike plan

By Jon Hurdle

PHILADELPHIA Oct. 2 (Reuters) - Pennsylvania has received submissions from 14 potential bidders interested in operating the state's Turnpike system of toll roads in a plan that would help fill a $1.7 billion transportation funding shortfall.

Gov. Ed Rendell hopes to win legislative approval for a toll road privatization plan, although lawmakers in July rejected his previous proposal. The legislature also spurned his bid to close the transportation funding gap by taxing the profits of oil companies that do business in Pennsylvania.

Parties with an interest in bidding on the latest toll road privatization plan were required to first submit their qualifications to run the Turnpike.

Rendell, a Democrat, in a statement released late on Monday, said the 14 submissions of credentials received included investment banks, engineering companies and a pension fund and represented a total of 34 companies, some of which are working together.

Rendell said the parties had "inundated" his administration with their qualifications to run the Turnpike, some submitting documents that were "several inches thick."

Privatization deals are much more common overseas, and both U.S. and foreign companies are eager to mirror those deals.

But rating agencies have bashed some of the accords, saying that Chicago, for example, failed its taxpayers two years ago by not demanding a share in future toll hikes when it leased its main commuter toll bridge to Indiana.

Rendell hopes to raise at least $1 billion a year from the proposed lease of the 531 mile (854 km) Pennsylvania Turnpike to help pay for an estimated $965 million a year in repairs to roads and bridges and an additional $760 million a year for public transit systems.

"Our needs are huge," Rendell said in the statement. "A lease of the turnpike could produce billions of dollars in additional funding and we owe it to taxpayers to fully explore this option. The volume of responses we received today proves there is a lot of interest in this idea."

The qualifications will be evaluated and a request for bids will then be issued "as soon as possible", said Chuck Ardo, a spokesman for Rendell. The lease plan will be subject to legislative approval.

(Additional reporting by Joan Gralla in New York)