Saturday, 4 December 2010

Ohio next major toll road privatisation?

Associated Press is reporting that the newly elected Ohio Governor, John Kasich (Republican) has said he is interested in privatising the Ohio Turnpike Commission, which is responsible for the 388km long Ohio Turnpike toll road.   The road runs east-west from Indiana to Pennsylvania, and is the I-76, I-80 and I-90. 

The privatisation is being investigated, with one concern being whether the price obtained in current market conditions would be worth it - although given the size and scale there is little doubt it would raise well over US$1 billion.   The toll road fully funds its own operation and maintenance and is so successful that the previous Governor diverted surplus revenue from the road to fund other road improvements in the state.

Hopefully if sold the new owners will be able to invest in new capacity and to vary charges to manage congestion.  Such privatisations should enable owners to optimise utilisation of their assets.

In any case, privatising the Ohio Turnpike would be an enormous transaction, rivalling the Chicago Skyway and Indiana Toll Roads, and showing once again, that government need not finance or manage highways.

UPDATE:  One report states that a sale is unlikely according to a spokesman for the Governor elect, because the state would not get a good price in the current investment climate.

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