With tolls rising, lawmakers discuss privatizing the Pike

By Noah Bierman, Globe Staff

It's hard to get dozens of people to jam into an airless basement room in the State House to hear policy wonks discuss how "infrastructure has really become a fashionable asset class."

But the standing-room only crowd at today's Transportation Committee hearing was a testament to how worried people are about the prospect of large toll increases recommended by the Massachusetts Turnpike Authority last month, or hikes in the state gas tax proposed by House Speaker Salvatore F. DiMasi as an alternative.

"There are no easy solutions to the problems that we face," Senator Steven A. Baddour, a Methuen Democrat who is co-chairman of the committee, said as he opened proceedings.

It was the first of several hearings scheduled to debate a complex web of problems caused by billions of dollars in Big Dig debt that is crippling both the Massachusetts Turnpike Authority and the Massachusetts Bay Transportation Authority.

Baddour said he favors at least examining the potential of leasing out the Turnpike in exchange for billions in up-front cash, the topic of today's hearing. Future hearings will focus on other possible solutions -- including a higher gas tax -- as legislators gear up to debate specific proposals early next year.

Most of the speakers were members of industry and supporters of privatization; union leaders who had less time to speak said tolls would rise and service would decline. Proponents said the state could tailor any lease proposal in advance to determine how much maintenance would be required and how high tolls could get over the life of the contract. But they conceded that the amount the turnpike would fetch from a private company would depend on how high legislators are willing to let the tolls rise.

Chicago Skyway tolls went from $2 to $3 between 2004 and 2008, as it was leased out to a private company for $1.83 billion for 99 years. The company will be able to raise tolls to $5 by 2017, and then raise them at rates commensurate with inflation after that, according to John R. Schmidt, the attorney who brokered the deal for the city of Chicago.

The cost of traveling the entire Indiana Toll Road had been at $4.65 since 1985. It jumped to $8 this year, an increase that state officials settled on before the road was leased out for $3.8 billion, Schmidt said in his testimony.

Private operators said that in addition to tolling, they would save more money through efficiencies and investing more money on up-front maintenance to save on costs over the long term. Jose Lopez, the US president for Cintra, said his company has spent money to upgrade electronic toll technology when it has taken over roads in Chicago, Ontario, and elsewhere.

But privatization will probably be a tough sell in Massachusetts. Unions, several public interest groups, business leaders, and politicians have all expressed concerns about the loss of control it would entail.

"Most Democrats are rightly skeptical of privatization plans," said Representative David P. Linsky, a Natick Democrat who leads a caucus of legislators from the western suburbs who oppose the toll hikes. "The real problems with the Mass. Turnpike's finances aren't the operating costs. The real problem is the Big Dig debt, and privatization doesn't solve the problem."

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