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Sunday, September 28, 2008

Will rejectors regret inaction on turnpike?

Morning Call editorial blasts lawmakers for failing to even consider a lease deal:

Once again, the small-idea, under-achieving Pennsylvania Legislature has let down the people they serve.
The Scranton Times echoes that sentiment:
The $12.8 billion offer now on the table was made in an open bidding process. It was a case of the market stating definitively the value of the turnpike.

And the unfolding global credit crisis could affect the future of the turnpike in another negative way if the Legislature refuses to act on the existing offer.

If the offer expires, the market might well take a lesser view of the turnpike’s value simply because adequate credit might not be available to an entity making a bid in the future. The current offer is guaranteed.

Rep. Frank Andrews Shimkus, a Lackawanna County Democrat who opposes the lease, said recently that there is nothing in the lease deal that the state cannot do by itself.

Ah, but there is — the state cannot operate the turnpike with the same level of efficiency as a private company. The Pennsylvania Turnpike Commission, which should be disbanded regardless of whether a lease is achieved, itself is an expensive redundancy.
Last but not least, the Citizens Voice calls the delay a risky bet.
Some Senate Republicans have said they will not consider the lease plan until the new session of the Legislature convenes in January, and that they might move to rebid the project.

That is a colossal spin of the dice. The global financial crisis probably will tighten credit across the economic spectrum, thus producing lower, rather than higher bids.

If that happens, Pennsylvania will be saddled with a massive backlog of unfunded highway infrastructure projects and no alternative plan to fund them.Some lawmakers have estimated the turnpike’s lease value to be higher than the $12.8 billion bid, but that bid was the result of an open, competitive bidding process in the marketplace — the definitive test of value.

The Legislature should move on the turnpike lease not only to lock in the price and avoid losing the deal to the financial crisis, but to use the resulting infrastructure projects to help stimulate the broader economy.

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