Nj Transit is stuck in park.
The cash-strapped state agency unveiled a plan last fall to plug a budget gap by privatizing parking at 81 train stations. The agency asked private operators to bid on a long-term contract that was expected to raise roughly $300 million.
A source said NJ Transit had hoped to receive final offers by the end of last month but has been forced to push back the timing. An NJT spokeswoman confirmed the delay and said the agency plans to ask for bids this fall with the hope of signing an agreement next year.
“The request-for-proposal process is taking more time than first anticipated,” the spokeswoman said. “There are more complexities.”
The delay is a setback for the state’s efforts to privatize other assets — such as the Atlantic City Expressway, which could be worth several billion — to raise cash and deal with budget shortfalls.
“This was New Jersey’s first public-to-private test case,” the source said.
A source involved in the bidding process said one issue is that NJ Transit does not control all of the parking spaces in its lots; local townships control about 35 percent in most of the facilities.
Without their approval, NJ Transit can’t include those spaces in the agreement with a private contractor. The agency is debating whether to try to lease partial lots where it doesn’t control all the spaces.
“Whether you include split stations or not is a sticking point,” the source said.
Some suitors have already dropped out because of the delay, the source said. Among those still interested are JPMorgan and private-equity firms Carlyle and KKR, the source said.
For NJ Transit commuters, the delay could be seen as mixed news. On the one hand, leasing the lots will mean more capacity and cleaner, brighter lots, the NJT spokeswoman said.
At the same time, there are concerns that a private operator will attempt to raise prices even though NJ Transit will still have control over rate hikes.