The consortium behind the world’s biggest toll road privatisation on Tuesday night pulled out of the deal, delivering a blow to efforts to bring further private-sector money into the US’s crumbling road system.
Pennsylvania Transportation Partners, led by Citigroup and Abertis, a Spanish toll road operator, pulled out of the deal to take a 75-year lease over the Pennsylvania Turnpike because of problems winning approval in the state legislature.
But Ed Rendell, the Democratic governor who signed the $12.8bn lease for the 537-mile road in May, vowed to try again to win approval for a similar private lease to the same consortium next year. “I look forward to the day when we can become true partners in financing and managing Pennsylvania’s transportation network,” he told the consortium in a statement on Tuesday night.
The deal proved unpopular with key members of the legislature who believed the road – opened in 1940 as America’s first four-lane, limited-access freeway – should continue to be managed by the publicly owned Pennsylvania Turnpike Commission.
Jim Courtovich, senior adviser to the consortium, said it had not extended its offer, which expired at the end of the month, because several state legislators were preventing a vote on the necessary legislation. Legislators in the state’s lower house would have voted in favour if permitted, he said. “The votes were mounting up and were supportive in the House of Representatives,” Mr Courtovich said. “Clearly this is a good sign for the future.”
The Pennsylvania consortium’s hopes for legislative approval had risen last month when the Federal Highway Administration blocked an application by the Pennsylvania Turnpike Commission to impose tolls on 311 untolled miles of Interstate 80. Mr Rendell said that, without the private deal or the tolls, the state was facing a $500m annual shortfall.
News of the Pennsylvania deal’s collapse came on the same day a private consortium agreed a deal with Chicago to run the city’s municipally owned Midway Airport. A consortium of Citi, Vancouver Airport and John Hancock Life Insurance will pay $2.5bn for the facility, the first major US airport to be put up for privatisation.