December’s biggest transportation PPP story was the rejection by Gov. John Kasich of the proposed long-term lease of the Ohio Turnpike. According to the analysis prepared for the state by KPMG, a 50-year lease was expected to yield a net upfront payment (after paying off outstanding Turnpike bonds) of $1.8 billion plus annual payments of 15% of gross toll revenues for 50 years (with an estimated net present value of $1.5 billion). Instead, Kasich opted to have the Turnpike issue $1.5 billion in additional bonds, the proceeds of which will be used for transportation projects statewide. This alternative he called “unlocking the value” of the Turnpike; others might call it taxing toll-payers to pay for other people’s roads.
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