Ohio will now spend $3.4 million to study turnpike privatization
May 2, 2012 - 1:05:09 PM | By David Tanner, Associate Editor - Land Line
By David Tanner, Land Line associate editor
State transportation officials say studying the possibility of leasing the Ohio Turnpike to private investors is going to cost $550,000 more than originally thought. It’s just the latest in an ongoing series of events related to the controversial turnpike proposal. OOIDA opposes the private lease or sale of infrastructure, calling it a “pawn shop” maneuver that leaves users holding the bag.
Highway users, along with numerous state and federal lawmakers threw a fit last fall when the Ohio Department of Transportation received a $1.5 million grant to study a possible turnpike lease. Gov. John Kasich offered the possibility of a lease as part of his 2011 budget.
In response to the backlash from mostly Democrats including U.S. Rep. Tim Ryan, the feds revoked the funds for a short time only to reinstate them later after congressional Republicans pushed back in favor of the study.
This past February, officials revealed that the study would likely cost $2.85 million. Now, according to the latest reports, the Ohio DOT has added two more firms to the study team and has upped the cost estimate to $3.4 million.
OOIDA opposes the pawn shop mentality of leasing infrastructure to the private sector. The Association points to the Indiana Toll Road lease that leaves highway users including truckers on the hook to guarantee the investors make a profit through the year 2081. According to the Indiana lease, which took effect in 2006, tolls were allowed to increase from about $14 to more than $32 in the first five years of the 75-year agreement.
The Ohio Turnpike increased tolls in January. The agency estimates it will make $249 million in tolls this year. Kasich estimated last year that a turnpike lease could generate $3 billion in up-front cash.
OOIDA says that upfront cash would get used up quickly and the investor would be allowed to pocket the tolls for decades afterward.
Should a lease last 50 years, an investor could potentially reap almost $12.5 billion for its $3 billion investment, assuming revenue stays around $249 million per year – and that’s without toll increases that would certainly be guaranteed. Maintenance costs would come out of that total, but as truckers have reported to Land Line about the condition of the Indiana Toll Road, the private investor in that lease is in no hurry to maintain the roadway the way a state DOT or turnpike agency would.
Land Line Magazine: The Business Magazine for Professional Truckers
May 2, 2012 - 1:05:09 PM | By David Tanner, Associate Editor - Land Line
By David Tanner, Land Line associate editor
State transportation officials say studying the possibility of leasing the Ohio Turnpike to private investors is going to cost $550,000 more than originally thought. It’s just the latest in an ongoing series of events related to the controversial turnpike proposal. OOIDA opposes the private lease or sale of infrastructure, calling it a “pawn shop” maneuver that leaves users holding the bag.
Highway users, along with numerous state and federal lawmakers threw a fit last fall when the Ohio Department of Transportation received a $1.5 million grant to study a possible turnpike lease. Gov. John Kasich offered the possibility of a lease as part of his 2011 budget.
In response to the backlash from mostly Democrats including U.S. Rep. Tim Ryan, the feds revoked the funds for a short time only to reinstate them later after congressional Republicans pushed back in favor of the study.
This past February, officials revealed that the study would likely cost $2.85 million. Now, according to the latest reports, the Ohio DOT has added two more firms to the study team and has upped the cost estimate to $3.4 million.
OOIDA opposes the pawn shop mentality of leasing infrastructure to the private sector. The Association points to the Indiana Toll Road lease that leaves highway users including truckers on the hook to guarantee the investors make a profit through the year 2081. According to the Indiana lease, which took effect in 2006, tolls were allowed to increase from about $14 to more than $32 in the first five years of the 75-year agreement.
The Ohio Turnpike increased tolls in January. The agency estimates it will make $249 million in tolls this year. Kasich estimated last year that a turnpike lease could generate $3 billion in up-front cash.
OOIDA says that upfront cash would get used up quickly and the investor would be allowed to pocket the tolls for decades afterward.
Should a lease last 50 years, an investor could potentially reap almost $12.5 billion for its $3 billion investment, assuming revenue stays around $249 million per year – and that’s without toll increases that would certainly be guaranteed. Maintenance costs would come out of that total, but as truckers have reported to Land Line about the condition of the Indiana Toll Road, the private investor in that lease is in no hurry to maintain the roadway the way a state DOT or turnpike agency would.
Land Line Magazine: The Business Magazine for Professional Truckers
