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Published: Thursday, 10/6/2011 - Updated: 3 years ago

Congressmen fight study for turnpike

5 Dems ask U.S. to withhold funds

BY JIM PROVANCE
BLADE COLUMBUS BUREAU CHIEF
Traffic on the Ohio Turnpike passes through Olmsted Falls, Ohio. Ohio congressman are considering leasing the Ohio Turnpike to a private operator. Traffic on the Ohio Turnpike passes through Olmsted Falls, Ohio. Ohio congressman are considering leasing the Ohio Turnpike to a private operator.
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COLUMBUS -- Ohio's five Democratic congressmen are not fans of the idea of leasing the Ohio Turnpike to a private operator, but they really don't like using up to $1.5 million in federal funds to study the idea.

"Using these funds to advance a privatization plan that could potentially severely cost drivers via increased tolls, threaten the job security of over 1,000 Ohioans, and drive up costs for local governments through increased maintenance costs of local roads is a questionable use of federal taxpayer dollars and exposes a loophole in the program guidelines,'' the congressmen wrote in a joint letter to U.S. Secretary of Transportation Ray LaHood.

The letter was signed by U.S. Reps. Marcy Kaptur of Toledo, Tim Ryan of Niles, Dennis Kucinich of Cleveland, Marcia Fudge of Cleveland, and Betty Sutton of Barberton. A spokesman for Mr. Ryan's office said members of the Republican delegation from Ohio were also asked to sign on to the letter, but did not.

The Ohio Department of Transportation is working toward selection of a consultant to study whether a long-term lease of the 241-mile toll road across northern Ohio to a private entity would be a good deal for the state. If that consultant determines that it would be, it would then play a role in helping to find someone willing to pay billions to the state for the privilege of operating the highway.

The Federal Highway Administration has approved spending up to $1.5 million for a consultant to "explore the opportunities to lease state's owned assets.'' In response to a request for comment, the highway administration would say only that Mr. LaHood will respond to the Democratic delegation's letter.

"The federal government funds studies all the time,'' said ODOT spokesman Steve Faulkner. "This is no different. It's important to note that this is not just to take a look at a turnpike lease. It's to hire this advisory team to look at all options to best leverage the asset of the turnpike. That might be a lease. It might be a public-private venture. It might be putting it under the direction and leadership of ODOT.

"They will look at all of those options and then report back,'' he said. "We will proceed with the plan that best suits the interests of Ohio taxpayers.''

In all, 14 financial, legal, and consulting firms expressed interest in the consulting contract, and the state narrowed the list to five: Citigroup Global Markets Inc., Morgan Stanley, KPMG Corporate Finance, Public Financial Management, and Macquarie Capital. None is an Ohio firm.

Macquarie is a branch of the Australian half of the Spanish-Australian partnership that five years ago entered into a 75-year lease of the Indiana Toll Road for a payment of $3.8 billion to the state. The Indiana deal so far has not proven profitable for the investors, but that hasn't stopped Macquarie and the four other investors from coming to the table in Ohio.

Ohio Gov. John Kasich has stressed that the state will not pursue a similar deal here if the market doesn't support it. The finalists are expected to make their personal pitches next month.

Mr. Kasich has talked about a long-term lease that could generate about $3 billion, less than was paid to Indiana for a substantially shorter road. Roughly $600 million of the purchase price would have to be earmarked to pay off the Ohio Turnpike's outstanding debt. The rest of the money could be used to fund other transportation projects in the state at a time when federal and state highway funds are not keeping pace with need.

"We have serious concerns that using federal funds to progress plans to sell off a state asset is far from the intended spirit of the program,'' the congressmen wrote.

Contact Jim Provance at: jprovance@theblade.com, or 614-221-0496.



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