In its push to gain federal approval to implement tolls on I-80, the Pennsylvania Turnpike Commission yesterday announced a proposed $2.5 billion capital plan to update 83% of the Interstate's roadway and replace 60 of its bridges over the next 10 years.
The PTC released the proposed capital plan on the same day that Pennsylvania Gov. Edward Rendell began his tenure as chair of the National Governors Association. In accepting the position, Rendell said that he would make infrastructure finance the focus of his initiative at the NGA.
He cited an American Society of Civil Engineers' estimate that pegs total infrastructure needs in the U.S. at $1.6 trillion to bring roads, bridges, tunnels, mass transit systems, and more to a state of good repair. Rendell stressed during the NGA's centennial meeting in Philadelphia yesterday that funding for these projects cannot be delayed.
"Now is the time," Rendell said to his fellow governors. "Especially with interest rates being low, now is the time when we can repair this nation's infrastructure for significantly less than it's going to costs us five or 10 years down the road."
The commission's $2.5 billion capital spending program would increase I-80 infrastructure funding by roughly $200 million annually. The PennsylvaniaDepartment of Transportation oversees I-80, currently investing $50 million to $60 million each year for infrastructure improvements. The PTC announced that it would spend $250 million annually, on average, to revamp the roadway, update deficient bridges, and complete interchange projects.
Financing for the proposed $2.5 billion capital plan would come from issuing bonds backed by toll revenues and from pay-as-you-go funds. PTC's toll conversion project manager, Barry Schoch of McCormick Taylor Inc., said officials have yet to break down how much of the $2.5 billion will come from bond proceeds and how much will stem from annual contributions from PTC's general fund.
McCormick Taylor is a Philadelphia-based company that provides planning, design, and engineering services on roadways and bridges.
"Some of it will be pay as you go," Schoch said during a press conference. "In the total capital program, much like the [Pennsylvania Turnpike's] total capital program, you can use bonded money for projects that are going to last a longer period of time. For other routine capital investment, you have to use what we call pay as you go and that comes directly from the tolls and then each year some of those tolls are reinvested in the facility and so it's a split and I don't have the exact number but it's a split between the bonded money and the pay as you go."
PTC officials released the proposed 10-year capital plan in response to the Federal Highway Administration's request in December to provide the federal government with more detailed information on I-80's infrastructure needs, along with the cost of those capital improvements, to better assess if tolling is an appropriate funding mechanism for the system. PTC officials expect to resubmit their I-80 tolling request next month and anticipate the FHWA will release its decision by early fall.
Last year, lawmakers passed Act 44, which boosts the commission's borrowing power to issue up to $5 billion of special revenue bonds over 12 years, with no more than $600 million of that debt to be issued per year.
In addition to the bonding increase, the law allows for PennDOT to lease I-80 to the PTC for 50 years in a "public-public partnership," with PennDOT receiving annual payments from the commission and the PTC managing I-80 and implementing tolls on the 311-mile roadway.
Under Act 44 the PTC paid the department $750 million in fiscal 2008, which ended on June 30, and will pay $850 million and $900 million in fiscal 2009 and 2010, respectively. After that, yearly contributions will increase by 2.5% through 2057.
Tolling plans for I-80 include implementing 10 overhead toll-collection facilities on the 311-mile system that would collect fees electronically without cash-collecting booths.
Pennsylvania has another transportation funding option on the table. Lawmakers are currently reviewing a $12.8 billion concession agreement that would allow the state to lease the 530-mile Turnpike to Citi and Abertis Infraestructuras, a joint consortium, for 75 years.
Rendell's administration deemed Citi/Abertis the winning bidder in late May, yet the transaction, which includes the private company financing the Turnpike's $5.5 billion, 10-year capital program, will need to pass through the legislature before becoming law.
The Turnpike runs east-west along the southern region of the state from New Jersey to Ohio while I-80 runs parallel to the Turnpike through the state's central region.
