While there’s much to celebrate in TxDOT canceling the contract with Zachry to begin construction of a toll road on 281 (read about it here), it’s essentially an extension of the victory from January when the Federal Highway Administration pulled the clearance for the 281 project (see blog and story). In TxDOT’s press release yesterday, they state CLEARLY that they intend to re-bid the project at a later date. SO IT AIN’T OVER!

Why would TxDOT cancel the contract 3 months after they knew there would be a delay for at least a year? Aside from having to pay Zachry “stand-by fees,” it’s really to lead the public to believe the toll road plans are off the table when in fact, nothing could be further from the truth! TxDOT and the Alamo RMA are currently in negotiations with (2) foreign bidders for the 47 mile toll starter system on 281 and Loop 1604 and they could sign it at ANY TIME!

It’s done in secret (Express-News article on that here), the public is completely shut out, and once they ink the deal, we’re stuck with it for the next 50 YEARS! And once signed, TxDOT has demonstrated they plan to sue our own Attorney General with YOUR tax dollars to KEEP IT SECRET (See details on the first such CDA deal on the TTC-35 project here).

TxDOT’s new strategy is to say “nothing has been decided yet” to diffuse the firestorm, while negotiating a secret backroom deal. They’ve spent $1.2 million of YOUR TAXPAYER money just to spend a year negotiating this secret contract, does anyone honestly believe they won’t sign it? Here’s what some Collin County officials say up in the Dallas area about TxDOT’s push to use these CDAs (see toll glossary here):

“They are (TxDOT) so sold on this CDA process. I don’t think they are (TxDOT) going to let anybody do a toll road on their own,” – Collin County Commissioner Jack Hatchell

“It’s a money-grab…There’s no local control, plus they’re going to make a sizeable profit…it’s all done in secret.” – County Judge Ron Harris

“When the state sells out to the highest bidder, that automatically translates into the highest tolls for our citizens. I think that the Legislature needs to change the focus of TxDOT.” – Collin County Commissioner Jerry Hoaglund

If this isn’t taxation without representation and a total violation of open and transparent government, I don’t know what is!

STILL MUST ATTEND PUBLIC MEETINGS MARCH 29 or 30!

It’s essential to have a HUGE turn out at these meetings. It’s only necessary to attend ONE. Ask for the ORIGINAL plan to be implemented and other less expensive, less invasive non-toll options. The tollway version is nearly DOUBLE the cost and adds 6 lanes to the ORIGINAL plan. Tolling is THE MOST EXPENSIVE OPTION, yet that’s all they’re looking it. Read TxDOT’s press release on the blog (Link here), note how they say the options are toll it or no build! It’s unacceptable and we MUST go on record with other options in order to FORCE them to implement it later (in court if necessary).

Read about it in the Express-News. Or see article below after TxDOT press release.

This is the next step in TxDOT acknowledging the inevitable on the 281 project. Their incompetence has caused a significant delay and there’s no purpose in paying Zachry “stand-by fees” until the studies are complete, so they pulled the contract. It’s what they should have done in January when the Federal Highway Administration (FHA) pulled the environmental clearance for 281 due to TxDOT’s failure to follow federal law and conduct an extensive environmental impact statement (EIS) (Read about it here). Instead, they submitted only a cursory environmental assessment (EA) that tries to claim that adding 10 lanes of pavement over the aquifer recharge zone, the sole source of drinking water for 1.7 million people, had no significant impact!

Just ask the residents of a subdivision at Borgfeld and 281 how the 1,000 gallon gasoline spill in 1999 still requires them to use a commercial grade water filter due to the inital contamination and exposure to leukemia-causing benzene and the continuing risk of contamination for the next 20 years! And that’s before TxDOT tries to add 10 more lanes thereby increasing that risk tenfold from what it already is today. Let’s not forget that the same Zachry Construction was also responsible for a raw sewage spill that leaked into the aquifer for 4 weeks before it was reported just this last December (Read article here).

TxDOT’s press release (note it was released late on a Friday afternoon, the day and time the public least tunes into news) was just as defiant as we’ve come to expect stating it’s tolls or no-build…nothing in between. In TxDOT’s world, it’s their way or NO HIGHWAY! Federal law requires them to look at alternatives, not build versus no-build, and it requires them to consider the most cost-effective and least invasive to the natural AND human environment. The impact of adding the burden of an extra toll tax to the already skyrocketing cost of transportation on consumers and businesses alike has not been studied or even on TxDOT’s radar screen.

To them, the new purpose of the improvements is to generate revenue, not bring the much needed congestion relief they’ve promised since the late 1990’s and had funded since 2004. The original inprovement plan for 281 (See it here) would add 6 lanes, as a tollway, 10 lanes! The original cost, $48 million, as a tollway $83 million! Bill Barker, transportation planner and consultant, has an alternative that doesn’t require frontage roads at all, and yet still provides access to local businesses. So there are alternatives that would add perhaps as few as 2 lanes and be much more cost effective!

***STILL NEED HUGE TURN OUT AT TXDOT PUBLIC MEETINGS MARCH 29 & 30! ***
Will TxDOT listen…you be the judge! But our job now is to get these alternatives on the record in the public meetings next week (Find out time and location here) to FORCE TxDOT to implement non-toll alternatives when they go to the FHA to get clearance again. We need everyone to turn out for these very important public meetings to get the public opposition ON RECORD. I’m suspicious of the timing of this announcement by TxDOT and the fact that they did it as a press release. That seems to indicate they may be trying to make people think the toll roads are off the table to suppress turn out at these meetings in favor of the highway lobby falsely inflating support for toll roads when they try to sign a new contract this summer (See highway lobby’s memo to members to turn out to push tolls).

TxDOT refuses to take responsibility for their incompetence, refuses to own up to the fact that it’s THEIR FAULT this project is delayed due to their failure to follow FEDERAL LAW, and failure to install the ORIGINAL FUNDED plan two years ago. Predictably, TxDOT is now attempting to blame the delay on the lawsuit and resorting to their usual scare tactics making people think the fix is 5-10 years off! TxDOT should have immediately begun a full environmental impact statement (EIS) as soon as the FHA pulled their clearance. Instead, they stubbornly continue on this path of biting around the edges of the law without actually following it. The attorneys have vowed to sue them until they do a full EIS! So what could have been an 18 mo.-2 year delay may unnecesarily turn into an even longer one due to TxDOT’s arrogance and refusal to follow the law.

TXDOT PRESS RELEASE ON PULLING ZACHRY CONTRACT ON 281:

SAN ANTONIO – The Texas Department of Transportation (TxDOT) has elected to
cancel the existing construction contract on US 281 from near Loop 1604 to
Stone Oak Parkway pending the outcome of additional environmental studies.

Zachry Construction Corporation of San Antonio was awarded the contract last
fall and work began to construct a mobility and safety project on US 281 for
$84 million, including joint bid utility work. The project includes
upgrading US 281 to an expressway configuration with additional toll express
lanes and parallel non-toll lanes as identified in the Metropolitan Planning
Organization’s Metropolitan Transportation Plan, “Mobility 2030”.

In response to a lawsuit filed by two groups opposed to the project, TxDOT
will re-open previous environmental studies on the US 281 corridor.
Previous studies conducted in 1984, 2000, 2004 and 2005 will be re-assessed
and combined with any new data collected into a single environmental
document for this corridor, from Loop 1604 to Borgfeld Road. TxDOT has
secured a consultant to re-evaluate the corridor. The consultant contract
for this additional work is approximately $800,000.

If no significant environmental findings emerge as part of the study and the
design of the project remains the same, the project will be re-bid. If this
scenario occurs, bids could again be received summer of 2007 with work
beginning again in the fall of 2007. Actual construction duration is
projected to last 36 months. The project would be complete in 2010 instead
of 2008 as previously planned. (Note: They don’t mention the original project funded in 2003 and 2004 that should be completed already!) We anticipate the cost of the project will
increase approximately $8 million over the original contract assuming a
conservative 5% construction inflation factor. (Note: They don’t mention the original project funded in 2003 and 2004 that cost only $48 million which THEY turned into a toll plan at a cost of $83 million…TxDOT is responsible for this cost overrun!) If the results of the
environmental study include recommended design changes, the start date of
construction would be further adjusted.

If significant environmental findings emerge, resulting in the need to
prepare an Environmental Impact Statement, it could be 2 ½ to 5 years before
a decision on the project will be made. (Note: TxDOT should have immediately begun a full environmental impact statement (EIS) as soon as the FHA pulled their clearance and saved us this unnecessary delay). If at that time, the studies result
in a different design than was previously approved there would be additional
time required to acquire any additional rights of way as well as re-design
the project. It is projected that this re-design and right of way
acquisition work would take 2 to 4 years after the environmental decision is
made. (Note: There is no need for a re-design, just install the original design at $48 million)

If this scenario occurs, work on corridor could re-commence again in
approximately 4 ½ to 9 years. Construction on the Loop 1604 to Stone Oak
Parkway section would be complete sometime between 2014 and 2019. The
preparation of an Environmental Impact Statement is estimated to cost an
additional $2 million.

As part of the environmental study, the no-build (or do nothing) option will
be considered. If the decision is made through the additional studies that
the no-build option is preferred by the region, no work will be performed on
the corridor until another project is identified and appropriately studied
in the future. No estimate is available on a timeline should this scenario
occur.

“Based upon the possible timeline scenarios and the associated uncertainty
that currently exists, it is deemed to be in the public’s best financial
interest to cancel the existing project and re-bid at a later date rather
than pay a contractor stand-by time” said Frank Holzmann, P.E., San Antonio
Mobility Office Engineer.

Two identical Public Meetings to discuss the environmental re-assessments
will be held on March 29 at Reagan High School and March 30 at Bush Middle
School. Both meetings will begin with an Open House starting at 6:00 pm
followed by a presentation beginning at 7:00 pm.

An additional $21 million project to construct an underpass at US 281 and
Borgfeld Road was scheduled to be bid for contract in January 2006. This
project has also been delayed pending completion of the environmental study,
as it is within the limits subject to the lawsuit. The timeline scenarios
for this project are similar to the project from Loop 1604 to Stone Oak
Parkway.

Traffic on US 281 just north of Loop 1604 has increased from 8600 vehicles
per day in 1980 to approximately 91,000 vehicles per day in 2004. Between
1998 and 2001, there were crashes which resulted in 9 fatalities and over
700 injuries on US 281 between Loop 1604 and the Comal County line.

“We regret the inconvenience to the driving public and urge safe driving
habits as we work to resolve this matter,” added Holzmann.

Toll road contract canceled for studies
Web Posted: 03/25/2006 12:00 AM CST
San Antonio Express-News

The Texas Department of Transportation has canceled an $84 million contract with Zachry Construction Corp. for the construction of toll lanes on U.S 281 north of Loop 1604, pending the outcome of additional environmental studies.

The agency said Friday that if no significant environmental findings emerge from the new study and the project’s design does not change, it will be re-bid by the summer of 2007, with construction beginning that fall.

It would be completed in 2010 instead of 2008 as previously planned, at an additional cost of $8 million.

If the study determines that a full Environmental Impact Statement needs to be conducted, it could take up to five years to make a final decision on the project, delaying completion on the Loop 1604 to Stone Oak Parkway section from 2014 to 2019, TxDOT said in a statement.

“Based upon the possible timeline scenarios and the associated uncertainty that currently exists, it is deemed to be in the public’s best financial interest to cancel the existing project and re-bid at a later date rather than pay a contractor stand-by time,” said TxDOT project engineer Frank Holzmann.

TxDOT was forced to reopen previous environmental studies in response to a lawsuit filed by two groups opposed to the project, which was scheduled to begin in January.

The past findings will be combined with any new data in a single environmental document for the corridor, from Loop 1604 to Borgfeld Road.

The agency has hired a consultant for the new study, which will cost about $800,000 and take at least a year to complete.

Public meetings to discuss the environmental reassessments will be held Wednesday at Reagan High School and Thursday at Bush Middle School.

Both meetings will begin with an open house at 6 p.m. followed by a presentation at 7 p.m.

Yesterday, the City Council officially jumped on the pro-toll bandwagon by allocating yet more money to the San Antonio Mobility Coalition (SAMCo). Read the WOAI radio report here or see story at the bottom.

My comments on the outrageous claim that funding the tolling authority does not equal an endorsement of toll roads is below:

Money is tantamount to support. NO politician is courageous enough to say they’re FOR toll roads. Instead they resort to these inane statements like “we have no other choice” or try to deceive the public by denying that giving $49,000 to SAMCo (a group of 70 private companies who stand to profit off of toll roads and/or the highway slush fund it’ll bring in) isn’t an endorsement of tolls. SAMCo’s own web site explicitly states “the Regional Mobility Authority will build, operate, and maintain newly created toll projects within a designated area.” That ought to settle it in the minds of residents, your City Council just endorsed toll roads and they have yet to deal with the illegal $500,000 loan they gave to the Alamo Regional Mobility Authority last year (the tolling authority is set-up by the State with board members appointed by the county commissioners). (Read article here.). Does Mr. Perez and the City Council take us for fools? In America, the land of the free, home of the brave, the beacon of light and liberty to the world, it’s an insult to democracy to suggest we can’t come up with ANY choices other than to toll every highway in town!

SA Taxpayers Already Paying Cost of Toll Roads
Council allocates $49k to toll road construction group, says it does not ‘represent an endorsement of toll roads.’
By Jim Forsyth
Friday, March 24, 2006

Not a single mile of toll roads have been built in Bexar County, the concept is still very controversial and is being challenged in court, but San Antonio taxpayers are already paying for a group that helps plan toll roads, whether they like it or not.

San Antonio city council last night allocated $49,000 of your tax money to the San Antonio Mobility Coalition, which ‘advocates for transportation solutions for the San Antonio area,’ including the construction of toll roads.

Councilman Richard Perez, who heads the the Metropolitan Planning Organization, denies that the contribution represents city council’s ‘support’ for toll roads.

“This is just another way that we support the need for additional transportation dollars for the city of San Antonio,” Perez said, adding that the RMA has ‘several other transportation functions.’

But on it’s own web site, in response to a ‘frequently asked question’ about ‘what is a Regional Mobility Authority’, the San Antonio Mobility Coalition responds, “the Regional Mobility Authority will build, operate, and maintain newly created toll projects within a designated area.” It says nothing about ‘other transportation functions.’ A spokesman for the San Antonio Regional Mobility Authority says the web site is ‘outdated’ and ‘should have been upgraded.’

Local transportation groups have come under fire from toll road opponents for rushing toll road construction, and trying to begin work on toll lanes of US 281 between Loop 1604 and Stone Oak Parkway without undergoing the essential environmental impact studies.

1200 WOAI news reported this week that some business groups supporting toll road construction have decided not to call them ‘toll lanes’ any more, opting instead for the expression ‘express lanes.’

The San Antonio Mobility Coalition has also advocated for improved rail and other transportation efforts.

SAMCo Members and Partners:

Supporters of toll express lanes will have an opportunity to provide supportive comments at two public meetings on the US 281 project to be hosted by TxDOT the evenings of March 29 and March 30. Times and locations are provided in the meeting notice that follows.

As toll opposition groups are targeting this event for a large negative turnout, I want to encourage our members and partners to help deliver a more positive and accurate message on the benefits (in other words – the benefits of taking money from our wallets to line theirs!) of the US 281 toll project. Please consider taking the following specific actions:

1) Forward this email to members of your boards, committees, government relations councils, and other potentially interested individuals and groups.
2) Encourage anyone in support to attend either of the two meetings. Numbers and turnout will be a major factor in this!
3) Encourage them to provide brief supportive comments – either orally or in writing.
4) Even just a brief sentence or two will do. What is important is that they hear from what we believe is a large – and up to this point – silent majority on this.
5) Attached for your reference are two recent documents on US 281 (TxDOT) and on the overall need for toll express lanes (AlamoRMA).
6) Key points you may want to mention in your comments, keeping in mind this is an environmental public meeting:
a. The project is in response to growth that is already occurring. Most land along this corridor has already been platted for development. Several major employers (i.e. Mutual Savings, PGA Resort, etc.) have already announced plans for expansion in the general area of this project.
b. Economic and population growth is occurring at a rapid and sustained pace in northern Bexar County.
c. Traffic along this corridor is increasing about 15 percent annually.
d. Air quality will be enhanced as more cars will be freed from congestion – rather than idling at long traffic lights.
7) Please call or email me at the numbers that follow if you plan to provide testimony! During the next few days, I will be working with several task forces to refine our comments. I will be glad to share this information with any of you.
8) The official TxDOT information follows. Thanks in advance to all of you for your assistance with this!

NOTICE OF PUBLIC MEETINGS

The Texas Department of Transportation (TxDOT) will conduct two (2) Open Houses/Public Meetings relating to the preparation of an Environmental Assessment (EA) for the portion of the proposed U.S. Highway (US) 281 project which runs from approximately Loop 1604 to Borgfeld Road in San Antonio, Texas. The proposed project covers approximately 7.5 miles.

The meetings will begin with an Open House from 6 p.m. to 7 p.m., followed by a formal presentation and comment period beginning at 7 p.m. Information presented will be the same for both Public Meetings.

The purpose of these Open Houses/Public Meetings is to discuss ongoing environmental studies currently being conducted along US 281 from approximately Loop 1604 to Borgfeld Road. The environmental studies would identify and explain potential changes to the natural, social and economic environment that could occur as a result of construction of the US 281 project.

All interested citizens are invited to attend these Open Houses/Public Meetings and provide verbal or written comments on this project. Citizens will also be afforded an opportunity to view project exhibits and ask questions at the Open Houses and Public Meetings. Written comments not provided at one of the Public Meetings should be submitted to the following address: HNTB Corporation, Attn: Lena Camarillo, 85 NE Loop 410, Suite 304, San Antonio, Texas 78216. Fax: (210) 349-2101 or e-mail: US281@hntb.com. All comments must be postmarked or received by Monday, April 10, 2006, to be included in the public record.

Persons interested in attending these Public Meetings who have special communication or accommodation needs should contact Lena Camarillo at (210) 349-2277, at least two (2) working days prior to the first meeting so that appropriate arrangements can be made. Because the Public Meetings will be conducted in English, any request for language interpreters or other special communication needs should also be made at least two (2) working days prior to the first meeting. Every reasonable effort to accommodate these needs will be made.

Victor M. Boyer
Executive Director
San Antonio Mobility Coalition, Inc.
602 E Commerce Street
San Antonio, TX 78205-2620
(210) 229-2125; Fax (210) 229-1600
vboyer@samobilitycoalition.org
www.samobilitycoalition.org

WOAI report here.

More proof that tollers take the public for fools! They have to resort to deception and tricks to push their agenda down the taxpayers’ throats while we continue to expose the TRUTH!

New Name for Toll Roads
Supporters have decided to use new language to refer to proposed pay highway lanes.
By Jim Forsyth
WOAI Radio.com
Tuesday, March 21, 2006

When is a toll road not a toll road? When it’s an ‘express lane.’

Internal documents sent by toll road supporters and obtained by 1200 WOAI news show advocates of toll lanes on Highway 281 and Loop 1604 across the city’s north side are recommending that supporters use the phrase ‘express lanes’ when referring to the controversial project.

The change in syntax comes on the eve of two extremely important hearings next week at Reagan High School and Bush Middle School, at which the Texas Department of Transportation will get input from both sides on the toll road plan. The memos indicate businesses which support toll roads, some of whom stand to profit from their construction, are encouraging employees to attend the hearings to give the appearance of a huge groundswell of support for toll lanes.

Construction which was to begin on toll lanes on Highway 281 between Loop 1604 and Stone Oak Parkway hit a snag when environmental groups got the Federal Highway Administration to freeze the project until an environmental impact statement is completed. Two separate lawsuits also seek to derail the toll road concept in Texas.

Supporters of toll roads argue it is the only way to quickly increase the capacity of highways to deal with huge increases in traffic volume expected in far north Bexar County in coming years. Opponents, including Commissioner Lyle Larson, argue that much more sensible and lower cost alternatives are available, including building overpasses on Highway 281 to bypass four east west cross streets where red lights currently cause much of the congestion. Some toll road opponents also claim having some lanes free and others tolled would create a ‘two tiered society,’ where the wealthy could glide along on open roads, while the poor would be stuck in endless highway congestion.

When asked about the new ‘express lane’ name for toll roads, one toll road opponent told 1200 WOAI news, “we don’t care what they call it. It’s still garbage and we’ll defeat it.”

Much of what I read on your site rings true here in So. California. With no toll roads within living memory, Orange County fat cats have constructed 51 miles of under-used toll roads here. We’ve had 10 years to see the results. And the roads have failed by all relevant standards.

The Non-Compete Agreements have effectively let the Transportation Corridor Authority hi-jack ALL transportation planning in the county. The roads dump extra traffic onto our freeways at peak hours because the majority of drivers can’t justify paying the high tolls. As a result the toll ways are busy only at peak times– and are often jammed just like the freeways.

These roads don’t carry their own weight, financially or traffic-wise.

Whose idea was it to abandon the concept of public highways? Politicians who can make money on the side.

Your site provides many good ideas for our own “toll party” efforts.

Please let me know if there’s anything we can do to aid your cause.

‘gards,

Pete V.

Innovation Briefs
News Analysis
March 20, 2006

We have received numerous requests for periodic updates to our “Tipping Point” brief documenting new developments in highway tolling. Here is a roundup of news since the late January. Its highlights are the final passage of the Indiana Toll Road concession bill (signed by Governor Mitch Daniels on March 15) and the March 10 announcement by the private equity fund, The Carlyle Group, that it will start investing in transportation infrastructure. These brief overviews are not meant to replace the excellent in-depth reporting by my colleague, Peter Samuel, in his web-based TollRoadNews.com (which we recommend highly to anyone wishing to follow toll road developments in depth.) Our succinct announcements are merely offered in further evidence of the growing role of highway tolling and private sector involvement in developing and financing highway infrastructure.

January 24, 2006: Ohio Secretary of State Ken Blackwell, a candidate for Governor, proposes to lease the Ohio Turnpike to private investors. The proposed concession should generate $4-6 billion according to Blackwell. Unlike Indiana whose concession payment will be devoted fully to expanding and modernizing the state’s transportation network, Blackwell would invest the funds in economic development projects across Ohio, a move that has already stirred up criticism.

February 19: Federal Highway Administration approves a Colorado DOT study that recommends a $385 million plan to add toll lanes on C-470 between I-25 and South Kipling Parkway, a 12.5 mile road that handles up to 100,000 vehicles a day. With Colorado’s highway budget extremely tight, tolling, it seems, has emerged as a preferred way of paying for highway expansion.

February 22: A proposal championed by State Senate president and former Gov. Richard Codey would lease or sell the New Jersey Turnpike or the Garden State Parkway, a deal that Codey advisers say could raise more than $12 billion to replenish the nearly bankrupt state Transportation Trust Fund. For the time being, Gov. Corzine has taken a wait-and-see attitude, and is leaning in favor of refinancing the fund’s debt of approximately $7.3 billion, according to press reports. Corzine is the former head of Goldman Sachs, the Wall Street firm that has figured prominently as financial advisors to Governor Mitch Daniels in the Indiana Toll Road negotiations. Some of our sources speculate whether his former colleagues might not eventually change the Governor’s mind.

February 28: Future sections of Interstate 540 and the Triangle Parkway through Research Triangle Park are being considered as toll roads. Building the roads now and paying for them later with tolls could speed up road construction, according to Perry Safrant, head of the North Carolina Turnpike Authority. The first toll road is expected to be under construction in the Research Triangle area within a year.

February 28: The House Select Committee on Toll Roads of the Pennsylvania State legislature releases a study recommending approval of legislation that would enable the state to enter into public-private partnerships and use toll-generated revenue to fund construction of new roads (“Study of Innovations in the Funding and Delivery of Transportation Infrastructure Using Tolls” by John T. Durbin, former executive director of the Pennsylvania Turnpike Commisssion). “The bottom line is that existing public funding is insufficient to meet the growing needs of Pennsylvania’s transportation infrastructure…We’re just not going to be able to raise any more revenue at the pump,” said Richard Geist, chairman of the House Transportation Committee. The most likely first candidate for a tolling concession is the proposed MonFayette Expressway/Southern Beltway south of Pittsburgh.

March 1: A bill (SB 80) authorizing Utah’s DOT to enter into public-private partnerships to build new toll roads passed the state legislature. According to press reports, the first likely target will be the planned Mountain View Corridor stretching from the Salt Lake City International Airport to Pleasant Grove.

March 10: Texas DOT issues a Notice of Intent to issue Requests for Proposals to “develop, design, construct, finance, maintain and operate” a series of toll projects. Among them are two segments of the Trans Texas Corridor (I-35 and I-69), two Managed Lane projects (IH-635 and IH-820/SH-183) and seven other toll-related procurements. The projects will be developed under “Comprehensive Development Agreements” with private road builders.

March 10: The Carlyle Group, one of the largest and most respected private equity firms, announces creation of an Infrastructure Investment Team “to conduct investments in the infrastructure sector, including investments in transportation facilities…” The team will engage in public-private partnerships with governments at all levels as well as purchase projects outright or through long-term concessions, the announcement said. The eight-member team will be co-headed by Robert W. Dove, former Executive Vice President of Bechtel Enterprises Barry Gold, former Managing Director at Citigroup/Salomon Smith Barney. “The U.S. is finally starting to realize what the rest of of the world has learned, that private dollars can help to alleviate persistent infrastructure challenges,” said David Rubenstein Carlyle’s CEO in announcing the initiative.

In our January/February Brief, “Private Toll Road Financing: Will the US Transportation Community Rise to the Challenge?” we asked rhetorically “What would it take to persuade private equity funds to participate in toll road financing?” Our thanks to the Carlyle Group for providing the answer.

March 15: New York State holds a conference in Albany New York to address innovative approaches to the funding of transportation infrastructure. Participating in the conference were Thomas Madison, Commissioner of New York State DOT, Michael Fleisher, Executive Director of the NYS Thruway Authority and members and staff of the New York State legislature. The 300 attendees included a Who’s Who of the financial and construction world, including the Wall Street firms JP Morgan, Lehman Brothers, UBS, Merrill Lynch and Macquarie Securities; and construction/engineering giants, Bechtel, DMJM+Harris, Fluor, HNTB Corporation, Kiewit, Parsons Brinckerhof and URS Corporation. Discussion centered around two types of initiatives – public-private financing of new transportation projects and concessions of existing toll facilities as a means of raising capital for new construction. The conference was organized by the Region 2 University Transportation Research Center, Robert Paaswell, Director.

March 15: Governor Mitch Daniels signs a landmark bill authorizing a concession of the 157-mile Indiana Toll Road to the Macquarie-Cintra consortium for 75 years. In exchange, the state will receive an upfront payment of $3.8 billion with which the Governor intends to finance a program of highway improvements across Indiana, called “Major Moves. As one of our colleagues remarked, “For those of us who are used to waiting decades for the funding needed for projects to advance, this transaction is mind numbing. Suddenly, the State’s entire 10-year plan is funded.”

Some media dispatches chose to focus on the fact that the bill “squeaked by” in the House by a mere three votes. Undoubtedly, the measure suffered in the final weeks from adverse publicity generated by the Dubai port deal and the nativist sentiments that it aroused. But the anti-foreign opposition, we suspect, will be short lived, as the public learns of improvements in the toll road’s operation by its new “owners” and as the U.S. investment community becomes more involved in concession-type deals (see the Carlyle Group announcement above).

C. Kenneth Orski
Editor/Publisher
Innovation Briefs
10200 Riverwood Drive
Potomac, MD 20854
tel: 301.299.1996
fax: 301.299.4425
www.innobriefs.com