Big Dig holes MassPike finances

Massachusetts Turnpike Authority may be about to go the way of the dodo, says Piers van den Burgh.

Governor Deval Patrick is proposing to abolish the debt-laden agency and create a comprehensive transportation system for the region. It could mean higher tolls for Pike drivers east of Route 128 and a shifting of more than US$2.5 billion in debt to other agencies. But in western areas tolls will be removed.

Patrick’s proposal is to include the western Pike into the Massachusetts Highway Department, while the Massachusetts Port Authority would run the Pike east of 128. This would mean that western tollbooths would be taken away, except in Stockbridge on the New York border and Sturbridge, close to the Connecticut border, where drivers would pay a toll to enter the state. If the plan goes through, for the first time since the turnpike opened in 1957, it will be possible to drive through Central Massachusetts for free.

The reason for the changes is simply dollars – billions of them. In the autumn (fall) outstanding debt obligations forced the state to hand over US$800 million to refinance some of the agency’s bonds.

Lower income from less-than-expected traffic numbers and higher debt financing costs are forcing the issue.

Big Dig debt

The problem is the legacy of the Big Dig, the Central Artery/Tunnel Project that rerouted the Interstate 93 that ran through the heart of Boston into a 3.5-mile tunnel under the city. Debt in the region of US$2.5 billion is threatening to cause acute problems in these credit-crunch times of recession and scarce refinancing capital.

The Governor believes that there will be operational savings from the merger of the western operations with the Massachusetts Highway Department. The Turnpike Authority also has large cash reserves as a cash bond repayment reserve, which may be used to help pay off remaining bonds on the western part of the highway. While about US$17 million will be lost through the removal of toll charges on sections of the turnpike, operational efficiencies in the merged operations will more than make up the shortfall, while around US$100 million will be gained through the toll hikes.

 “There is simply no way round an increase in tolls in the short run. That is an unfortunate fact. But the time has come to stop relying on tolls alone to pay Big Dig debt,” says Patrick.

Patrick wants to affect radical change. By consolidating agencies he hopes to save millions. “We have eliminated millions of dollars in waste and duplication. Reducing the number of toll collectors and administrative personnel at the Pike, and reducing police details with civilian flaggers are just two examples,” he says.

Transponder technology

He’s also looking at new techniques to save costs with the Registry of Motor Vehicles to explore transponder technology in registration stickers to keep vehicles moving through tollbooths as well as other traffic efficiency measures to improve traffic flow.

The aim is to eliminate all tolls except at the harbour tunnels and border entry points in the long run. And the merged entities will align all transport strategy and administration into a modernised system, says Patrick.

Queston is, will all these changes produce the savings he seeks or will they, like the Big Dig itself, simply shift the problem elsewhere? A new analysis of local highway data by the Boston Globe suggests that the massive project has relieved congestion in the city centre, but that congestion has actually worsened around the city's outskirts.

Only time will tell.
 

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