Leasing Pike is debated at first public meeting

Taxpayers hear of solutions for Big Dig debt

Demonstrators rallied yesterday in East Boston to protest toll hikes. At a State House hearing, potential solutions to the turnpike's debt were discussed. ''There are no easy solutions to the problems that we face,'' said Senator Steven A. Baddour. (JONATHAN WIGGS/GLOBE STAFF)

It is hard to get dozens of people to jam into a stuffy basement 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 yesterday's Transportation Committee hearing was testament to how worried people are about the prospect of large toll increases recommended by the 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," said Senator Steven A. Baddour, a Methuen Democrat who co-chairs the committee, as he opened proceedings.

It was the first of several scheduled hearings 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 examining the effects of leasing the turnpike in exchange for billions in up-front cash, the topic of yesterday'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 they fear that tolls would rise and service would decline under private control.

Proponents said the state could tailor any lease proposal to determine how much maintenance would be required and how high tolls could go.

Chicago Skyway tolls went from $2 to $3 between 2004 and 2008, as it was leased 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, said John R. Schmidt, the lawyer 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 for $3.8 billion for 75 years, Schmidt said in his testimony.

Private operators said that in addition to the income from tolls, they would save additional funds through efficiencies and by investing on upfront maintenance. Jose Lopez, the US president for Cintra, said his company has spent money to upgrade electronic toll technology when it has taken took 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 a loss of control.

In a related hearing, a City Council subcommittee on aviation and transportation met last night in East Boston, where residents who would be most affected by a toll increase at the Sumner and Ted Williams tunnels and hundreds of others turned out in opposition.

Bill Linehan, vice chairman of the committee, said he was particularly concerned because no one from state government attended, though representatives from the Massachusetts Turnpike Authority board and Transportation Secretary Bernard Cohen were invited.

Noah Bierman can be reached at nbierman@globe.com.

Milton J. Valencia of the Globe Staff contributed to this report.