May 12 (Bloomberg) -- The Port Authority of New York and New Jersey, faced with falling revenue, wants private investors to provide at least $1 billion to build a new Goethals Bridge, the 81-year-old, 1.3-mile (2-kilometer) span between New York City’s Staten Island and Elizabeth, New Jersey.
It would be the first such private transaction for the 89-year-old Port Authority, where declining income from fees and tolls forced agency officials to reduce its 10-year capital spending plan this year by 17 percent to $24.5 billion, said Stephen Sigmund, its spokesman.
“It’s a first step to gauge interest,” Sigmund said. “We would own and operate it, set the tolls and repay investors out of general revenue over 30 years.”
The authority posted a request for information from private contractors on its website yesterday. It’s seeking investors to put up $1 billion to $1.5 billion to replace the current two-lane structure by 2016, Sigmund said. The bridge lacks an emergency shoulder and would cost $200 million to $600 million a year to maintain as it ages, he said.
The private investor would design, build, finance and provide most maintenance for the bridge and be repaid in installments, according to the request. The authority is seeking financing for the contractor through private-activity bonds and so-called federal Tifia loans under the Transportation Infrastructure Finance and Innovation Act, it said.
Richard Anderson, president of the New York Building Congress, an organization of builders, land owners, contractors, unions and vendors, called the Port Authority’s request for information from the construction and financing industries an “important first step.”
It “would allow a vital project, which the Port Authority cannot currently afford, to move forward while demonstrating that private-public partnerships can play an important role in New York’s future,” he said in a statement.
The agency uses its $6.3 billion yearly budget to operate three regional airports, shipping ports, three bridges and two tunnels, commuter rail lines, and it owns the land under the World Trade Center.
The Goethals Bridge, which Sigmund described as “used beyond capacity,” carries about 14 million vehicles a year through its eastbound toll point. It doesn’t handle enough traffic to finance the construction alone through tolls, he said.
It’s named after Major General George W. Goethals, builder of the Panama Canal and the first consulting engineer of the authority, the agency’s website says.
The Star-Ledger reported the authority’s plan earlier.
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