Tunnel ceiling's collapse could lead to higher tolls on turnpike

The fatal Big Dig tunnel ceiling collapse could trigger, in a worst-case scenario, toll increases for the Boston Harbor tunnels and the Weston-Boston stretch of the Massachusetts Turnpike, according to bond rating firms that monitor Turnpike Authority finances.

If the Interstate 90 tunnel is closed for a protracted period, toll revenue falls as motorists avoid the Big Dig and downtown Boston. If repairs prove to be sufficiently expensive, the authority will face pressure to raise tolls or seek financial help from the state, Fitch Ratings said.

Scott Trommer, the Fitch analyst who issued a formal warning yesterday about credit risks for Turnpike Authority bonds, said in an interview last night that higher tolls would be one strategy for dealing with a financial crunch.

``There's a number of scenarios that can play out and if there are increasing financing obligations, there are a number of funding strategies that could play out," higher tolls among them, he said.

Kurt Forsgren -- a director of Standard & Poor's, another bond rating agency -- said the Turnpike Authority ``potentially would have to look at raising tolls."

``People might not like it, and there might be a decline in usage, but the revenues would increase because of the demand for travel through Boston," he said. ``The Turnpike Authority could do that."

But Turnpike Authority spokeswoman Mariellen Burns said last night, ``We will still be able to pay operating and debt service costs, and there would not be a material impact on bond covenants" that would lead to pressure for a toll increase.

Under a 1997 legislative deal that had the Turnpike Authority bail out the Big Dig after years of delays and absorb billions in cost overruns, the authority operates the Weston-Boston Turnpike Extension and Allston toll plaza, three harbor tunnels, and the depressed Central Artery. The system is kept financially separate from the 125-mile portion of the turnpike from West Stockbridge to Weston, whose tolls cannot be used for the Big Dig.

The Ted Williams Tunnel tolls account for about 30 percent of the system's revenue. But collections have been suspended since the Monday ceiling collapse that killed Milena Del Valle of Jamaica Plain.

``Based on the assumption that the toll being waived at [the Williams Tunnel] will stop in the near future, we do not expect significant toll revenue losses," Burns said. Also, motorists who have shifted their trips from the Williams Tunnel to the Sumner Tunnel still pay a $3 toll.

The Turnpike Authority, in a common condition for toll road bonds, is legally required to collect 15 percent more than the projected annual cost of paying off principal and interest on the $2.3 billion of Metropolitan Highway System bonds and to put the extra 15 percent into special funds for maintenance and repairs.

The agency has about $182 million in reserve, which could be tapped for tunnel repairs, Fitch said in a statement yesterday. But no one yet knows how much it will cost to fix the scores of tunnel defects or who would pay for repairs.

Terms of the 1997 bonds require that tolls at the harbor tunnels and Weston and Allston toll plazas rise by an unspecified amount in 2008. Both harbor tunnels charge $3 for automobiles, and the Weston and Allston toll plazas charge $1, or 75 cents for FastLane automatic toll payment subscribers. Tolls doubled in 2002 on the Turnpike Extension and rose by $1 at the tunnels.

Fitch warned that outrage over the tunnel collapse ``may further exacerbate" the risk of public opposition to the 2008 toll increase. For years, political leaders and voters from the western suburbs have complained about the unfairness of turnpike tolls being used to pay for the Central Artery project.

``In addition to lost toll revenues, the authority may face additional obligations to address the construction issues" of the Big Dig, Trommer wrote. Because the authority carries such a huge debt load, ``support from the Commonwealth also could be required, depending upon the magnitude of potential repair and maintenance work that may not be recoverable from insurance and/or claims against contractors."

But with the authority facing public outrage over the accident and traffic disruptions and widespread calls for the ouster of Turnpike Authority chairman Matthew J. Amorello , a direct state taxpayer bailout for the authority could face heavy opposition.

Ultimately, if the authority lacks the money to cover a combination of falling revenues and mounting expenses, raising tolls is probably the easiest solution, said Philip N. Shapiro, former chief financial officer for the Massachusetts Water Resources Authority and a former managing director for Standard & Poor's who is now chief financial officer of Babson College in Wellesley.

``What matters with investors and the credit rating agencies is that they have rate-setting authority they can exercise directly," Shapiro said. ``They already have the toll increase scheduled to take place, and if they have to do it a year or two early because traffic's down and they're in stress, that can happen."

Peter J. Howe can be reached at howe@globe.com.