Wanna buy a turnpike?
The Pennsylvania Turnpike is about to become the largest piece of U.S. public infrastructure to be privatized. Jill Barshay reports that at least two overseas ventures have submitted undisclosed cash offers for the road.
Tollbooths on the Pennsylvania Turnpike. (dot.state.pa.us)
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Bob Moon: Pennsylvania is taking bids to lease the Pennsylvania Turnpike to a private company. The Wall Street Journal is reporting this morning at least two groups -- one from Spain, the other a combined Spanish-Australian venture -- have submitted undisclosed cash offers for the 500-mile-long roadway. As Marketplace's Jill Barshay reports, it'll be the largest piece of U.S. public infrastructure that's ever been privatized.
(singer)
Pennsylvania Turnpike Blues
Tell me which exit I should choose
I'm just cruising all confused.
Jill Barshay: Pennsylvania's hoping to raise $18 billion to build more roads and other infrastructure. In exchange, the winning bidder will get to collect tolls -- and fill potholes -- on the Turnpike for 75 years. Dennis Enright of the NW Financial Group analyzes public-private deals like this one. He says the leading road operators are from Spain and Australia.
Dennis Enright: The primary reason is that they have the experience. In the United States, toll roads have typically been done by public entities like turnpike authorities. And in the rest of the world, they're typically done by the private sector.
It's a low-risk, profitable business, Enright says. Take the Chicago Skyway toll road privatized in 2005. It generates a 12 percent return. But the public is paying for it with higher tolls.
I'm Jill Barshay for Marketplace.
