Collateral Damage Isn't ALL Bad: PA Turnpike Deal Falls Through
Financially-challenged Pennsylvania motorists can breathe a sigh of relief, as The Newspaper reports that “Abertis announced the Spanish-led Pennsylvania Turnpike Partners (PTP) consortium had dropped plans to lease the Pennsylvania Turnpike until the year 2083.” In a statement, Fat Albert said “Hey, hey, hey! We don’t have the cash to play!” OK, they actually said “Progress in the approval process, which is taking longer than expected, alongside uncertainties in financial markets are behind the decision, which will give the partners of the consortium more freedom to assess other opportunities and projects, some of which are in part related to the current situation.” And most of which aren’t. And that “longer than expected” bit refers to state lawmakers rejecting a proposed 25 percent hike (plus annual 2.5 percent rises) in tolls. Hey, and it’s win – win! “Fitch Ratings responded to the announcement by removing the Spanish company from its ‘Ratings Watch Negative’ list. The ratings firm believed Abertis would have had trouble raising the $3 billion in capital needed to begin the Turnpike takeover.” [TTAC is proud to announce that The Newspaper has agreed to simultaneous posting of its future articles]
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Ultimately, all these deals were based on financing. Strangely, some private companies could access capital markets at a cheaper rate than a state authority. With a rise in costs -- 90% of the deals make don't make sense anymore. Thank god. Now they should make it illegal for your traffic ticket money to be shifted overseas.....
So it is a question of credit cost? I wondered how a private company could make more profit than the state operating the same road.