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N.Y. governor eyeing sale, lease of Thruway

Critics fear costs of privatization

ALBANY, N.Y. -- For sale: 641-mile superhighway, with 27 rest stops and reliable toll revenues. Interested? Call the New York State Thruway Authority.

It's not as far-fetched as it sounds. Governor George E. Pataki is proposing to sell or lease the state's transportation assets for large infusions of cash. Private companies would run them and collect tolls to make a profit, which critics say could cost taxpayers more in the long run.

''They give Donald Trump the Second Avenue subway," said Assemblyman Richard L. Brodsky, Democrat of Westchester. ''He builds it. How do you think he pays back his bank? He raises fares."

Katherine N. Lapp, Metropolitan Transit Authority executive director, told state lawmakers recently that the Second Avenue subway line could be a candidate for privatization.

Pataki administration officials have met in recent months with top executives at Macquarie Securities, an Australian investment bank, and LCOR, a Pennsylvania developer, which are seeking together to build a replacement for the Tappan Zee Bridge and manage it under a long-term lease.

''There are capital needs all over the state, and this is a creative, modern way of looking at it," said David A. Sigman, a senior vice president at LCOR.

Pataki has backed privatization, which would require a change in state law, since a speech in 1995, when he proclaimed to fellow Republican governors that ''New York's transportation facilities, such as the airports and Thruway, are worth billions."

His legislation, which was submitted to the Legislature with his budget Jan. 18, would permit the state and its authorities to sell or lease a wide variety of facilities from bus stations to ferries. Private entities could charge money at tunnels, roads, or bridges where tolls already exist -- for example, the Queens Midtown Tunnel or the Triborough Bridge -- or if they make improvements.

Privatizing transportation assets, especially toll roads, has become a hot source of income in states where officials don't want to raise taxes. Examples include Texas, Virginia, and California. Overall, they have had mixed results.

Robert Paaswell, director of the University Transportation Research Center at City College, said selling public assets is ''a one-time quick fix" that gives elected officials a budget boost now. But he said the assets are often worth far more over time than their asking price today. Problems may arise if the private entity stumbles and the state must intervene, he said. The taxpayer ''is always left holding the bag," he said.

A Pataki spokesman, Michael Marr, said the state is in the exploratory stages. Casey Cannistraci, a spokeswoman for the Thruway Authority, which also owns the Tappan Zee Bridge, said ''no plans are in place."

The two companies hoping to land the Tappan Zee Bridge project have significant experience in public-private ventures.

Macquarie is a major investor in a $1.8-billion deal just completed to lease the Chicago Skyway, a toll bridge, for 99 years. LCOR was a partner with the Port Authority on a deal to build and manage Kennedy Airport's Terminal 4, which opened in 2001.

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