Governor Rendell Announces Final Bids on PA Turnpike Due May 16

HARRISBURG, Pa., May. 12 /PRNewswire/ --

Says Goal is to Ensure Highest Bids Possible for Legislative Consideration

HARRISBURG, Pa., May 12 /PRNewswire-USNewswire/ -- Governor Edward G. Rendell today announced the deadline for final bids on a 75-year concession agreement to operate the Pennsylvania Turnpike is Friday, May 16.

"On May 9, we received multiple bids to lease the Pennsylvania Turnpike under the terms and conditions we set," Governor Rendell said. "Tolls would be the same as under Act 44 so there will be no additional cost to travelers. We are also requiring the operator to maintain the turnpike at the same or better condition as the current Turnpike Commission.

"Because some bids were within 10 percent of the highest bid, we are obligated to solicit best-and-final offers due this week," he said. "We will be back next week."

"Full details will be made public once we have the highest bid, but for now my first responsibility is to assure that the commonwealth receives the highest possible bids," the Governor said.

With opposition to Act 44's provision to implement tolls for the first time on I-80 and unlimited toll increases on the turnpike, last fall Governor Rendell opened the door to explore alternate funding by seeking qualifications from potential bidders for a long-term lease of the turnpike.

"Any lease deal must guarantee that we keep the turnpike safe, affordable and well maintained for future generations," Governor Rendell said. "We will continue to work hard to ensure that a private operator will be held to the highest standards of performance."

Throughout the fall and spring, the commonwealth and its financial advisory Morgan Stanley worked with transportation experts to develop specific terms and conditions so Pennsylvania could maintain ownership of the turnpike while generating maximum guaranteed additional annual transportation funding. Governor Rendell insisted that a lease be sufficient to eliminate the need to toll I-80 and include specific terms and conditions to:

    --  Limit potential toll increases -- Turnpike toll rates are the same
        between the lease plan and Act 44. However, the lease caps tolls at a
        maximum of 2.5 percent or the rate of inflation, while under Act 44
        tolls would likely increase above inflation to make required payments.

    --  Protect turnpike workers' collective bargaining agreement --
        Concessionaire required to maintain terms and condition of current
        contract. When it expires it will be up to the operator to negotiate a
        new agreement.

    --  Ensure completion of scheduled turnpike improvements -- Concessionaire
        will be required to maintain and rebuild the road to the same standards
        used by the Turnpike Commission or better.

    --  Maintain the turnpike at the same or better condition -- Annual,
        independent audits will be conducted through PennDOT to ensure
        compliance with the concession agreement. The agreement requires the
        concessionaire to reimburse the commonwealth for the costs of the
        compliance audit.

Bids are being submitted based on an extensive concessionaire agreement that spells out the terms and conditions for the 75-year lease. Bidders were required to submit a non-refundable letter of credit for $100 million. Bids remain valid until June 10 to allow time for legislative action.

Act 44 is the transportation funding law approved in July 2007 that increases turnpike tolls and authorizes the pursuit of tolls on I-80 to produce new transportation revenue -- on average, $945 million a year for the first 10 years assuming federal approval of I-80.

"Act 44 could provide a much needed boost for our highway, bridges and 73 public transit systems, but the reality is that there are many hurdles to tolling I-80 and without that Act 44 falls well short of even our basic needs, even with the transportation investments in my > (http://www.portal.state.pa.us/portal/server.pt?open=514&objID=377825&mode=2>) initiative.

In addition to exploring the turnpike lease potential, Governor Rendell is calling on state legislators to invest $700 million over the next three years to Rebuild Pennsylvania. The initiative puts residents to work building long-term assets -- bridges, dams, airports, rail freight lines and flood mitigation projects.

"These investments will help keep our state competitive, but it barely scratches the surface of the needs in our state," Governor Rendell said.

Since taking office in 2003, Governor Rendell nearly tripled construction contracts for bridges -- from $259 million in 2002 to more than $700 million in 2007.

"But for every two bridges we fix, three more reach the point where they also need repairs since the average age of our 25,000 state-maintained bridges in Pennsylvania is 50 years."

Pennsylvania has nearly 6,000 structurally deficient bridges, the most of any state in the nation, and nearly 9,000 miles of highways in poor condition. PennDOT estimates the cost of repairing all of the structurally deficient bridges on the state system at approximately $11 billion.

In its November 2006 report, the bipartisan Transportation Funding and Reform Commission recommended an annual investment of $1.7 billion a year to meet highway, bridge and public transit needs. Even at that level, the commission projected it would take 17 years to cut the percentage of structurally deficient bridges in Pennsylvania from 24 percent to the national average of approximately 11 percent.

The Rendell administration is committed to creating a first-rate public education system, protecting our most vulnerable citizens and continuing economic investment to support our communities and businesses. To find out more about Governor Rendell's initiatives and to sign up for his weekly newsletter, visit his Web site at: >.

CONTACT:

Chuck Ardo

717-783-1116