The Abertis/Citigroup consortium announced it would not renew its offer for the proposed lease of the Pennsylvania Turnpike, but Gov. Ed Rendell says he intends to re-introduce the proposal in the next legislative session.

The governor had unveiled the proposal in May. The consortium proposed to pay $12.8 billion to operate the Turnpike for 75 years. The principal was to be invested, and the proceeds used to fund the state highway budget.

Comments by Senate Republican leaders, in a recent discussion with construction industry representatives, provide some insight into the reluctance to consider the lease in some quarters. If the lease deal had been consummated in June, one leader noted, the principal would have lost around $600 million in value in recent months (and that was before the 700-plus point market plunge of several days ago).

It also underlines the danger in relying on a single, incremental funding mechanism rather than a comprehensive solution. With the market losing value, there would have been no way to compensate for the eroding principal.

“Leasing the Turnpike isn’t necessarily a bad idea, but relying on it as the only mechanism to resolve our funding crisis could have devastating consequences,” said PHIA President Ronald Drnevich. “Leases and other public-private partnerships should be explored as elements of a comprehensive highway funding solution.”

Meanwhile, Rep. Joseph Markosek (D-Monroeville), House Transportation Committee chair, predicted that the Turnpike Commission will take another run at tolling Interstate 80, once a new administration is in place in Washington. The Federal Highway Administration rejected Pennsylvania’s tolling plan this month, leaving the state with an annual highway funding gap again approaching $1 billion.

“In the 15 months since the passage of Act 44, the funding problem is considerably worse,” Drnevich said. “Not only did the federal government reject the I-80 tolling plan, but costs for building materials have increased dramatically. However, we’re encouraged by the comments of several legislative leaders regarding the need for a comprehensive approach to solving this problem, and we’re hopeful that new efforts will begin very early in the next legislative session.”