Category: General

Guerra: TxDOT didn’t coordinate with Aquifer Authority on 281 toll road

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Link to article here. What’s so damaging about this revelation is that the feds gave a “Finding of No Significant Impact” on this project over the Edwards Aquifer (extremely environmentally sensitive area and the sole source of drinking water for nearly 2 million people)when TxDOT didn’t even solicit comment from or coordinate this massive project with the Edwards Aquifer Authority!

The email correspondence showing that the management of TxDOT pre-determined the outcome of “no significant impact” along with the fact that they didn’t bother to coordinate with the AQUIFER AUTHORITY on potential impacts to the aquifer (when they state in their study that they had) proves a fraudulent study was submitted to the feds. TxDOT just can’t seem to play by the rules. They have to deceive and rig the results in order to railroad their agenda. Well, the light of day is now shining on these ill-conceived toll plans, and the citizens are seeking justice.

NOTE: AGUA and People for Efficient Transportation (PET, Inc.) filed the lawsuit in 2005. TURF and AGUA filed the current lawsuit in February this year.

TxDOT documents not reassuring about toll-road concerns
By Carlos Guerra
Express-News Columnist
August 9, 2008

Long faulted for its arrogance, the Texas Department of Transportation also is under fire for embracing toll roads.

They are forced to because gas taxes can’t meet growing highway needs, TxDOT officials say. So they will finance a lot of new highway lanes by tolling new and existing roads, and by handing some publicly owned right-of-way to private toll-road builders and operators in exchange for letting them collect tolls for decades.

TxDOT and the Alamo Regional Mobility Authority plan to pay for a huge expansion project by tolling 70 miles of U.S. 281, Loop 1604 and other area highways.

“It’s a massive, multibillion-dollar project over the most sensitive parts of the (Edwards Aquifer) recharge zone,” says Bill Bunch, an attorney who, along with Andrew Hawkins, represents Aquifer Guardians in Urban Areas and Texans Uniting for Reform and Freedom.

Construction on the 281-1604 project — which will be 19 lanes wide in parts — started in late 2005, and within weeks, a contractor ruptured a sewer main, spilling raw sewage for three weeks before it was fixed.

The two groups sued TxDOT and the regional mobility authority over their environmental assessment — required by the National Environmental Policy Act to get federal funds — which the groups say is flawed and grossly insufficient.

And they sued the Federal Highway Administration (FHWA) for approving TxDOT’s environmental assessment and demanded a more extensive environmental impact statement (EIS) before irreparable harm is done to the aquifer.

The massive highways will traverse numerous recharge features and a lot of the Edwards’ contributing zone. That notwithstanding, TxDOT’s environmental assessment included a “finding of no significant impact,” which in bureaucratize is written: “FONSI.”

Bunch and Hawkins pressed their case, and just before it went to court, TxDOT and the RMA raised the white flag and the federal agency “disapproved” TxDOT’s environmental assessment, forcing the state agency and the RMA to conduct the much more extensive EIS.

In the conduct of legal discovery, the attorneys recently uncovered some apparently damning documents.

In TxDOT’s environmental assessment, the agency asserts that it “coordinated with” and “solicited comments and input regarding the proposed action and potential issues that should be considered during the development of the environmental assessment” from a number of agencies, one of which was the Edward Aquifer Authority.

“Hogwash,” says Hawkins. “We scoured everything in (TxDOT’s) administrative record and found no letter asking for comment or coordination.”

In fact, all they found was a “Record of Conversation” of a 25-minute phone call made by a TxDOT contractor to an aquifer authority staffer asking for technical info. That isn’t exactly “comment and coordination.”

But to be on the safe side, the attorneys checked with the aquifer authority for any correspondence whatsoever from TxDOT from December 2005 to the present concerning the planned toll roads on U.S. 281 and Loop 1604. “And they wrote us back saying we have nothing, no e-mail, no correspondence. Nothing,” Bunch says.

The lawyers did find two e-mails from a TxDOT geologist and a biologist that raise questions about the impartiality of their science.

In one to the U.S. Fish and Wildlife Service, the biologist wrote: “At the moment we are trying to get a FONSI from the FHWA by September.”

And the geologist wrote a colleague at TxDOT saying that he was “unclear on … the extent to which we need to study (the) 1604 corridor,” before adding, “plus I know mgmt want to get (the) FONSI on 1604 right after 281 so we really need to get working on both.”

Tolling Authority did inadequate toll study for 281, no study of impact of high gas prices

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Link to article here. See the letter the State Auditor sent to the Alamo Regional Mobility Authority (ARMA) warning them of their inadequate toll viability study that failed to take into account high gas prices. High gas prices have been responsible for declines in driving and toll road use. Yet the ARMA continues to stick its head in the sand and ignore the economic signs that the 281 and other toll projects are in jeopardy due to high gas prices. And who will pay for such malfeasance? The taxpayers left to bailout the bonds when the toll roads default.

U.S. 281 toll-road planners didn’t figure on costly gas
By Patrick Driscoll
Express-News
August 8, 2008
Gas prices shot through the roof this year and a debate drags on over what the future holds, but none of that was reflected in recent traffic and revenue projections for the planned U.S. 281 toll road.

As a result, the estimates got a thumbs-down last month from State Auditor John Keel, who meted out his case in a single page of bean-counter lingo.

“Explicit consideration for the possible effects of higher motor fuel prices on the usage of the toll facility and, therefore, on revenues would seem warranted,” he concluded in a letter to the Alamo Regional Mobility Authority.

The state auditor doesn’t actually sign off on traffic and revenue reports from toll agencies. According to a 2007 tolling law, the auditor just reviews and comments on them.

Alamo Regional Mobility Authority Director Terry Brechtel noted that in a letter responding to Keel, saying the audit’s over.

However, she said the local agency agrees with his criticism and already had asked the consultant, URS Corp., to do a gas-price impact analysis.

“We will nevertheless forward to you a copy of the fuel sensitivity analysis once it is completed,” she said.

Such an analysis was a no-brainer to toll-road critics as long as two years ago.

Activists had tried to get the Metropolitan Planning Organization, which approved 70 miles of tollways in San Antonio, to study rising gas prices and the impacts to toll bonds that can stretch over several decades. The MPO board refused.

“It doesn’t make sense,” said Terri Hall of Texans Uniting for Reform and Freedom. “We’re glad the state auditor has the same concerns that we do. Will this road even be viable in 10 years with the trends we’re seeing in gas prices?”

Wary motorists have been scaling back in the face of gas prices soaring to a record U.S. average of $4.11 a gallon last month, according to AAA.

Americans drove 2.4 percent fewer miles through May compared to the same time last year and rush-hour congestion eased in many U.S. cities from March through May, federal data show.

San Antonio drivers spent 4.7 percent less time stuck in traffic, though officials say new lanes opening on Interstate 10 and new ramps at two Loop 410 interchanges helped.

Americans also have started avoiding some toll roads, with Houston reporting a 3 percent drop in traffic from March through June, and Dallas seeing a 2.3 percent slip in June on its President George Bush Turnpike. Growth on the Dallas North Tollway was flat.

Dallas’ North Texas Tollway Authority asked its consultant to take another look at traffic projections for planned toll lanes on Texas 161.

“But they’re not anticipating any change,” Dallas toll spokeswoman Sherita Coffelt said.

Unlike San Antonio’s toll-road consultant, Moody’s Investors Service took rising gas prices seriously Thursday when it issued a stable but cautious report on U.S. government toll roads through 2009. The long-term outlook was more uncertain.

“Gas prices at around $4 per gallon for a prolonged period could have a dampening effect on traffic and revenue and, if declines are not offset by rate increases, it could cause Moody’s to change our stable outlook,” Moody’s Senior Vice President Maria Matesanz said in a statement.

Federal forecasters say gas prices will spike even higher next year, but where they go from there is wrapped in a muddy debate on when global oil production will peak and begin to slide. Some say it’s happening now; others say there’s a four-decade cushion for technologies to come to the rescue.

San Antonio toll officials, getting ready to sell 40-year bonds later this year to help fund toll lanes on eight miles of U.S. 281 north of Loop 1604, are undeterred. They point to the success of Austin’s 65 miles of toll roads, which began opening in late 2006 and are raking in more money than expected.

“If we get higher fuel efficiencies in our vehicles, that could have an impact,” Alamo Regional Mobility Authority spokesman Leroy Alloway said. “People are still going to be driving, we’re still a very auto-centric country.”

Still, many toll critics aren’t sold on the car-dominated vision.

“It’s time for us to shift to sustainability, by moving to mass transit, or pay the price,” Bexar County Commissioner Tommy Adkisson said. “All the warning signals are there.”

Moody's warns gas prices may lead to toll increases

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Link to article here.

Moody’s: Gas Prices May Lead to Toll Increases
Bond Buyer
Thursday, August 7, 2008

WASHINGTON – Gasoline prices at $4.00 or more per gallon for a prolonged period could depress toll road traffic and revenue, and compel governments to increase tolls to prevent credit rating downgrades, Moody’s Investors Service warned in a report issued today.

Despite the warning, Moody’s gave the government-owned toll road sector a cautiously stable outlook for the next year to 18 months, pointing to steady traffic in commuter-heavy metropolitan areas as a stabilizing factor. However, greater leveraging of toll road assets could put downward pressure on the sector’s A1 median rating.

“We expect continued steady debt issuance, particularly as service area economies grow and toll facilities are tapped to undertake projects that local governments would rather not fund with taxes,” the report said.

Traffic and revenue growth are likely to decelerate in some regions because of deteriorating economic conditions, Moody’s said. But most toll roads rated by Moody’s – especially those in major metropolitan areas – should see steady, if slower, gains in traffic and toll payments.

All but four of 45 government-owned toll roads that Moody’s rates are stable, and its two ratings changes this year so far have been upgrades.

“The sector’s credit strength reflects favorable historical economic conditions and traffic growth in the U.S., the low elasticity of demand experienced by many toll roads, and financial strength and stability of the sector,” Moody’s said in its sector overview.

Other factors keeping the sector stable are solid liquidity levels, the ability to independently increase toll rates, and the “relatively resilient underlying service area economies” for many major metropolitan areas that are served by toll roads.

Moody’s gave examples of why some ratings were downgraded last year.

The North Texas Tollway Authority’s revenue bond rating was downgraded by Moody’s in November due to increased debt issuance and “steady toll increases” to support the additional debt, Moody’s noted. Nevertheless, the traffic growth rate has remained steady. As of May, traffic was up 6% over 2007.

The Santa Rosa Bay Bridge Authority’s rating was downgraded because traffic and revenue failed to meet expectations. The authority had to tap its debt service reserve fund to pay on its bonds. Lower-rated toll roads tended to be new, single-asset facilities that underperform because of local economic slowdown or “overly optimistic” predictions, the report said.

Moody’s analysts said older, established toll roads linking residential centers with employment centers in both urban and rural areas are not likely to suffer from sustained drops in traffic. In fact, they said, established toll roads may be the exception to a national trend.

The U.S. Department of Transportation announced last week that drivers traveled almost 10 billion fewer miles in May than in that same month last year. It was the third-largest monthly drop in U.S. vehicle miles traveled ever recorded. All three of the largest monthly mileage drops were this year.

But “the numbers cited there are on all U.S. highways, not just on toll roads,” explained Maria Matesanz, a Moody’s senior vice president who authored the toll road sector outlook. Matesanz said the rate of traffic growth on toll roads “may have slowed a bit, but the usage isn’t declining.”

Analysts emphasized that a clear-cut trend has not yet emerged that shows toll road traffic and revenues are in trouble. If tolling does see a decline because of a prolonged period of high gasoline prices, toll increases may be necessary, the report indicated.

The report did not speculate on a breaking point at which drivers might stop using toll roads because of higher toll costs.

“There’s always that point, and that potential, that you could be compounding the problem, so it is a balancing act,” said Tom Paolicelli, Moody’s vice president and senior analyst. “Some roads are more inelastic than others.”

It remains unclear, the analysts said, whether the economy, gas prices, or a combination of both is causing the decline in traffic growth rates.

Slowing regional economies combined with high fuel prices have, however, already affected some toll roads more than others, the analysts said.

The report said the government-owned toll road outlook is “more uncertain” for 2009.

“Given the reluctance to increase federal and state taxes to the levels needed to close the funding gap for road and bridge infrastructure, Moody’s expects the increased use of tolling to help pay for new transportation projects, leading to greater toll revenue-backed debt issuance,” the analysts wrote. In addition, more leveraging of existing toll road systems “may have a negative impact on some credit ratings.”

Moody’s cited examples of trends that may bolster the sector’s credit health.

Increasing use of electronic toll collection and open road tolling – or cashless tolling – and congestion pricing could bring in more toll revenues, the rating agency said. But the analysts recommended against sharp bumps in toll prices, suggesting instead that “gradual, smaller” toll increases may be more acceptable to drivers and lawmakers. Cashless tolling could speed the flow of traffic and cut operating and capital costs of government-owned toll road facilities, the report said.

“Also, as tolling becomes more electronic,” Matesanz added, drivers may pay less attention to toll rates. “So they’re a little bit more insulated from the toll rate increases.”

TxDOT caught in deception, hid docs from the feds that prove violation of the law

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Link to article here. This violation of federal law is much more than a “snag,” it blows a hole right through the 281 toll project. TxDOT was caught in willful deception, so this story is the understatement of the year!

Planned U.S. 281 tollway hits another bump
By Pat Driscoll
San Antonio Express-News
August 7, 2008
A federal lawsuit blasted as frivolous has dug up some documents that throw yet another curve at San Antonio’s planned U.S. 281 tollway.

The documents were uncovered in a discovery process for the lawsuit, which challenges the thoroughness of the tollway project’s environmental study.

The Texas Department of Transportation, which did the study, won’t say what the documents are but is handing them over to the Federal Highway Administration, which approved the study last year.

“We wanted to take the cautious advice of the attorneys and give the FHWA another opportunity to review this project,” TxDOT Director Amadeo Saenz said in a statement.

TxDOT asked the court’s judge to delay the lawsuit for two months to give federal officials time to review the documents and decide whether to amend the environmental study or reconsider approval. Pulling the clearance would delay the toll project even more.

Widening eight miles of U.S. 281 north of Loop 1604 has been on hold for years, first as TxDOT waited to build it as a freeway and then converted to a tollway plan, and then after activists filed a 2005 lawsuit to force a redo of the environmental study.

The more recent lawsuit, filed in February by Texans Uniting for Reform and Freedom and Aquifer Guardians in Urban Areas, is similar to the 2005 suit in that it calls for a closer look at impacts to motorists, water and wildlife.

One of the documents missing from the latest environmental study is a report on how the 10- to 20-lane tollway could affect the Edwards Aquifer, which supplies most of San Antonio’s drinking water, said TURF founder Terri Hall.

“They have withheld information from the Federal Highway Administration that could blow a hole in the middle of the 281 project,” she said.

The Alamo Regional Mobility Authority, which took over the $472 million toll project from TxDOT, hoped to sell bonds in October and planned to start opening new lanes in three years, now must push its schedule back at least two months.

BREAKING NEWS: TxDOT caught withholding 281 docs from the feds

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CAUGHT IN DECEPTION!
TxDOT asks court for 60 day delay on 281 case

In what amounts to a total victory for the grassroots, TxDOT has to ask the court for a 60 day delay in the 281 lawsuit so they can beg the Federal Highway Administration (FHWA) NOT to yank their environmental clearance for the 281 toll project. Through the discovery process of our lawsuit, the Judge required TxDOT to hand over the complete administrative record for 281, including all the financials and the stuff from when the improvements were funded with gas taxes that would keep 281 a FREEway. It’s been discovered that TxDOT withheld key documents not only from the public and our attorneys, but also the feds!

There are a heap of emails that show TxDOT tried to “fix” the environmental work for 281 to pre-determine a “Finding of No Significant Impact” (or FONSI) BEFORE the study even began. They rigged it! That is a DIRECT VIOLATION OF FEDERAL LAW! TxDOT then hired a company, HNTB, to do the so-called “independent” environmental study even though HNTB has a MAJOR conflict of interest, in that, the tolling authority (ARMA) also hired HNTB to do the preliminary engineering for all their toll projects! So HNTB had a vested interest in a “Finding of No Significant Impact” (or FONSI).

Then, it’s also been discovered that TxDOT purposely withheld a key study from a geologist they hired that stated the potential harmful effects of the toll road on the Edwards Aquifer. Such a study didn’t conclude what TxDOT wanted it to in order to get clearance from the feds, so they intentionally hid the report and failed to submit it to the FHWA who uses that crucial information in their decision on whether or not to give federal approval for the project.

TxDOT, thanks to our lawsuit, now has to submit these documents to the feds who will completely re-consider their previous approval of the 281 toll road. It’s likely the feds will yank their environmental clearance for the toll road in light of this deception by TxDOT. If they don’t, the court is likely to do it for them. So TxDOT is in total damage control mode and released a statement about their motion for a 60 stay in our lawsuit that tries to minimize what the documents reveal and, of course, blames us for the delay instead of their own incompetence and deception. As usual, they seem to think they can wiggle out of their corruption without consequences simply by supplementing the record. They were FORCED to come clean through a lawsuit brought by concerned citizens, not by them being forthcoming. The tactics at TxDOT never cease to amaze.

So stay tuned, we’ll see how the Judge rules and what other damaging information these “other” documents reveal.

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Official TxDOT propaganda on the request…

The Texas Department of Transportation (TxDOT) has asked a federal district court judge to issue a stay of the litigation regarding the expansion of U.S. Highway 281 in San Antonio.  We recently located documents which they feel may need to be reviewed by federal officials as part of the environmental evaluation of the transportation project.

In the process of responding to discovery requests for the lawsuit, staff identified documents that had not previously been submitted to the Federal Highway Administration (FHWA).  TxDOT will submit these documents to FHWA for their review.  FHWA will then determine whether the administrative record for the U.S. 281 project should be amended and whether the project’s prior environmental clearance would need to be reconsidered.  In order to provide FHWA time to review the documents, TxDOT requested that the ongoing litigation be delayed up to 60 days.

“Every day that this project is delayed is another day that Bexar County drivers are stuck in traffic,” said TxDOT Executive Director Amadeo Saenz.  “Nevertheless, we are committed to making sure that the 281 project complies with all federal and state requirements.  The extension we requested would allow FHWA to review these new documents and come to an independent decision about how to proceed.  We recognized that we should bring these documents to the attention of FHWA, and we want to make sure they have the time they need to review them.”

Saenz said that the documents will be submitted to the FHWA out of an abundance of caution.  “A new, more conservative view of TxDOT’s records related to the 281 project would require these materials to be forwarded to FHWA,” he said.  “We wanted to take the cautious advice of the attorneys and give the FHWA another opportunity to review this project.  On balance, this is a small addition to the 24,000-page administrative record, but it deserves scrutiny from FHWA.”

In its filing with the court, the department wrote that it has no intention of delaying the proceedings but wants to ensure that the FHWA has ample time to examine the recently identified information to determine whether the administrative record should be amended.

We recently adopted new policies on how to assist FHWA in the preparation of the administrative record showing the environmental review of a transportation project.  “Preparing the administrative record for a complex transportation project is an enormous task.  We will do our part to make sure the process is the best it can be,” said Saenz.

TTC-69 lobby group, Alliance for I-69, takes their show on the road

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Link to article here.

Alliance for I-69 is the biggest pro-TTC-69 lobby group in the state. Their chief lobbyist, Gary Bushell, is also the same lobbyist TxDOT illegally hired with our taxpayer money to lobby elected officials in the path of the TTC-69. Bushell is also a notable campaign contributor to MANY politicians, Bexar County Rep. Frank Corte among them. Today, Alliance for I-69 teamed up with Zachry, who along with Spanish company ACS won the development rights to TTC-69 in June, hit Victoria with their dog and pony show, and they’ve been in Austin hitting up lawmakers, too. Their logo on the material they left with lawmakers even has a Canadian, Mexican, and U.S flag morphed together, yet TxDOT denies the Trans Texas Corridor is about NAFTA, international trade, the movement of freight/goods, or the economic integration of the three countries.

I-69 partners make presentation
Victoria Advocate
August 05, 2008

The Alliance for I-69 Texas and U.S.-owned company Zachry American Infrastruture have partnered up and are traveling across the state giving presentations on I-69. On Tuesday, they stopped in Victoria.

During the short initial meeting, city leaders met with Gary Bushnell of the advocacy group and Gary Kuhn, senior project manager for Zachry, the firm awarded the contract for the superhighway.

The Interstate 69 corridor project is a proposed multi-use, statewide network of transportation routes in Texas that will incorporate existing and new highways, railways, utility right-of-ways and toll roads. Zachry was awarded the contract for the project in June by the Texas Transportation Commission.

The presentation focused on ways Victoria could use I-69 to their economic advantage and about the potential the corridor has in terms of new transportation technology.

According to Kuhn, Zachry is working on a master plan that takes into account local projects Texas communities want to do and how the company can help improve local economic development. Kuhn also discussed Zachry’s proposal for a freight shuttle that would go alongside the existing route of U.S. 77 in Victoria. According to Kuhn, the freight shuttle combines the best characteristics of the rail and truck transportation, but is more efficient, cheaper and causes less pollution. He added that it would run on electromagnetic pulses that create motion and a freight shuttle system across Texas could be up and running by as early as 2015.

“We’ve been working with the Alliance to visit all the communities involved in the I-69 Interstate. There is a lot of collaboration that needs to take place among these communities,” Kuhn said. “It’s a kind of one for all and all for one deal.”

The meeting included Mayor Will Armstrong, Dale Fowler of the Victoria Economic Development Corp. and Lee Swearingen of the Victoria County Navigation District.

ACS of Spain wins 50 year right to develop TTC-69, without competitive bidding!

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Link to ACS statement here.

TxDOT has repeatedly misled the public about the Trans Texas Corridor projects and has denied they’re part of any effort to economically merge (through trade and commerce) the U.S. with Canada and Mexico through key transportation corridors. Yet the release by ACS below clearly states the opposite. TxDOT also tried to misrepresent the breadth of the TTC-69 development contract awarded to ACS/Zachry in June leading even lawmakers to believe it only included upgrading Hwy 77 to interstate 69.

Yet as TURF warned (and the media has failed to report), the devil is in the details and the request for proposals by TxDOT clearly stated this contract was for the long-term development of the TTC. TxDOT also denies this grants ACS/Zachry the right of first refusal (preferential contracts without competitive bidding) for TTC-69 segments, but again, this statement by ACS tells its investors otherwise.

Read more about the egregious contract and taxpayer rip-off on the first segment of TTC-69 in the Rio Grande Valley here.

ACS to participate in the development of a great transportation infrastructure corridor in Texas

Iridium and the North American Zachry have been chosen by the State of Texas as strategic partners for 50 years to design, plan and develop a great infrastructure corridor of 1,000 kilometres in length.

The estimate project investments, involving the construction of road and railway infrastructures, exceed 30,000 million dollars, 5,000 million during the first seven years.

The I-69/TTC (Trans Texas Corridor) will connect the Mexican border with the Gulf of Mexico coastline, Houston and major industrial and logistics centres in Texas with the north of the country.

This is the second concessions project awarded to ACS in North America in seven days, after last week being awarded the A-30 highway in Canada.

Madrid, June 26, 2008. ACS Infrastructures Development, the North American branch of Iridium, the concession development company of ACS, and the Texan concessionaire Zachry American Infrastructure have become the successful bidders for the design, planning and development, as strategic partners of the Texas Department of Transportation (TxDOT), of the I-69/TTC infrastructure corridor for the next 50 years.

The I-69/TTC will be a great road and railway infrastructure corridor that will cross the State of Texas from north to south. Specifically, it will start in the Rio Grande valley to Houston offering new exits towards the centre of the Union from large industrial and logistics centres in the south of the State, including a branch towards the Gulf of Mexico and the port of Corpus Christie. The estimate investment for the entire project is around 30,000 million dollars, of which 5,000 million shall be invested during the first 7 years.

With the award of this project, ACS and Zachry, the largest construction group in the State of Texas, have become strategic partners of the Texas Department of Transportation and shall propose the development of specific projects and activities for which they will have a preferential negotiation option without public tender. In fact, the consortium is already considering the renewal of a first route whose concession will be negotiated with the Texas Department of Transportation, the US 77, which shall include the construction of a series of highways under concession regime connecting to it and which shall require an investment of 2,500 million dollars.

The I-69/TTC development project includes, in its initial design, the construction of a 1,000 kilometre network of highways and roads as well as railway lines. Based on this, ACS and Zachry will draft a Master Plan with the Texas Department of Transportation to establish the priority activities as well as the form and deadlines for their execution.

The winning consortium for the project, led by Iridium and Zachry, and which has UBS as its financial advisor and SDG as infrastructure planning consultant, also enjoys the involvement of Dragados, the parent company of the ACS construction area, and SICE, company belonging to its Industrial Services area and which has extended experience in the installation of traffic control systems, as well as other engineering and construction companies in the State of Texas.

The I-69/TTC is one of the high priority transportation infrastructure corridors identified by the State of Texas, the first of which has already been set in motion. In total, it entails an infrastructure network of around 3,000 kilometres and investments of 150,000 million euros to improve State communications with Mexico, centre and north of the country and Canada. Eight States of the Union, including Texas, which is the developer, are involved in the project.

Second concession in North America in one week

The awarding of the I-69/TTC represents the consolidation of the presence of the ACS Group in United States, where it already has considerable presence in civil works, and is the second concession won by Iridium in North America in seven days. Last week the ACS concessions developer was awarded by the State of Quebec, together with Acciona, the project to finance, build and operate for 35 years the A-30 highway in Canada, a project with an investment of 1,000 million euros, which shall require the execution of important civil works to connect the south of Montreal with the North American border. The A-30 is also the first concession awarded to Iridium in Canada.

This way, ACS continues its expansion process in North America, a market it has defined as strategic. Through Dragados, the parent company of its construction area, is already present in United States in its civil works activities since 2005, when it became the successful bidder for the first expansion of the New York Subway; a large engineering project connecting the Grand Central Station in Manhattan to Queens under the Hudson River, representing 400 million dollars. Later Dragados assumed new projects in the north east of the country to improve roads, dams and subways, and recently was awarded the construction of a dam in Puerto Rico and the first contract for the expansion of Miami airport. In December 2007, it acquired 100% of Schiavione; a company specialized in construction in the north east of the country.

Iridium, the ACS concessions company, has been for the last ten years the greatest private transportation infrastructure investor in the world, with promoted investments exceeding 22,000 million euros. The infrastructure and public equipment company participates in the management of more than 40 companies of these characteristics, encompassing the entire concessional business value chain.

Texas School Land Board votes to invest $100 million in toll roads

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Link to article here. Even more appalling than this investment handed to Goldman Sachs (for presumably a variety of toll road infrastructure projects), is the fact that the GLO has already given that amount to a single company, Australia-based Macquarie. This is the same company that bought dozens of Texas newspapers in the path of the Trans Texas Corridor to control the negative press it’s been getting, a bidder on many Texas toll projects, and proposing to takeover the Austin airport.

Texas Land Office commits $100 million to infrastructure fund
By Robert Elder
Austin American Statesman
August 5, 2008
The Texas School Land Board today voted to invest $100 million in an infrastructure fund run by Goldman Sachs. (To recap the hierarchy of these investments: The school land board approves investments for the General Land Office, which does real estate and land investing on behalf of the Texas Permanent School fund. Income from the PSF helps pay for public education. Got it?)

Rusty Martin, deputy commissioner for funds management, told the land board that the Goldman fund will top out at about $7.5 billion and invest primarily in transportation and utilities infrastructure.

The generally dismal state of global infrastructure has spurred great interest in infrastructure as an investing asset class. The need is obvious, from bridge collapses in the U.S. to China’s goal of adding the equivalent of the U.S. highway system in the next few years.

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The area has also drawn the attention of Texas lawmakers such as Sen. Steve Ogden (right), chairman of the Senate Finance Committee. The Bryan Republican has floated the idea of Texas public pension funds as a source of capital for infrastructure in the state. If the funds are investing — or contemplating investing — in infrastructure deals all over the world, Ogden reasons, why not put some of that money work in Texas?

To date, Texas public pensions have not committed large sums of money to infrastructure, although some funds hold stock in publicly traded infrastructure companies.

The Goldman Sachs investment is the General Land Office’s second infrastructure deal. The GLO in February committed $100 million to Macquarie Infrastructure Partners II. Macquarie Group Ltd. is an Australian investment bank.

Toll road traffic down due to high gas prices

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Link to article here. Once again, the price of gas is causing driving to go down, including on toll roads. There isn’t enough money in the family budget to pay for tolls on top of high gas prices. We’ve been sounding these warning bells for years, when will politicians and the pro-tollers listen? They’re foolishly putting generations into risky leveraged debt in order to build what they believe will be cash cow toll roads only to have them all fail due to high gas prices. We don’t need another mortgage crisis for the taxpayers to bail out in keeping with the “too big to fail” mantra of government. It’s time to rethink this toll proliferation.

Toll roads feeling the fuel-price pinch
Landline Magazine
August 1, 2008
Traffic is decreasing on some toll roads around the nation and officials say it’s because of high fuel prices.

It’s happening in Texas, where dozens of toll roads and tolled metro loops are being designed and built to handle a steep increase in population and traffic.

The North Texas Tollway Authority, which operates the 30-mile President George Bush Turnpike in the North Dallas area, saw traffic decrease by 1.4 percent in May and 2.3 percent in June compared to those same months in 2007.

“Historically, we have seen slight decreases in traffic when fuel prices spike and that traffic adjusts as prices decline,” NTTA spokeswoman Sherita Coffelt told Land Line.

Traffic on the Dallas North Tollway has increased, but by just 0.1 percent during the same timeframe. That’s much lower than the 3 percent growth seen from January to June of this year.

“Fuel prices may be one factor in the change,” Coffelt said.

It’s also happening in Maine where officials with the Maine Turnpike Authority publish a monthly vehicle count. The latest count shows the number of Maine Turnpike users decreased from 5.66 million to 5.34 million – 5.7 percent – in June 2008 compared to June 2007 traffic. Click here to view the chart.

“We believe it’s probably the increase in the cost of fuel,” spokesman Bruce Pelletier told Land Line. “Commercial vehicle traffic is down also, and that’s an indication that the economy is weakening or slower as well.”

Pelletier said traffic on weekdays remains steady, but weekend traffic that includes tourists is down.

He said overall traffic counts on the turnpike are down 1.8 percent year-to-date for 2008.

– By David Tanner, staff writer

Senate questions value of public-private toll roads

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Senate subcommittee questions value of public-private partnerships
Landline Magazine
July 31, 2008
Though public-private partnerships have been discussed at both the state and federal level for quite some time, there are still some areas of the controversial plans that have yet to be fully explored.

The Senate Finance Subcommittee on Energy, Natural Resources and Infrastructure examined some of those areas, including taxes and financing, at a hearing Thursday, July 24.

Subcommittee Chairman Jeff Bingaman, D-NM, started off the hearing by saying he has mixed feelings about public-private partnerships.

Bingaman said that, although he’s not necessarily opposed to the idea of private investment in U.S. highways, he’s also not convinced that it is the silver bullet that many of its proponents make it out to be.

“There’s no denying the seriousness of our surface transportation funding challenges, but the question is whether our federal response should be to encourage states to essentially sell off vital components of the Interstate Highway System,” Bingaman said.

“I am personally open to the role of the private sector, but I have real concerns about this rush into public-private partnerships and its adequacy to replace or supplement a strong and vital federal infrastructure program. Before we move away from our long-term state and federal highway partnership, we must better understand the consequences of doing so.”

Bingaman went on to say that he was concerned about the practice of selling longer and longer leases in order to take advantage of subsidies in the tax codes.

JayEtta Hecker, director of physical infrastructure issues for the Government Accountability Office, testified that, in addition to Bingaman’s concerns, there are other pitfalls of public-private partnerships to be on the lookout for. Not the least of which is the very real possibility of increased tolls for those who use the roads.

“There are, however, potential cost tradeoffs. It is a concern that there are views that this is somehow free money,” Hecker said. “The reality is that these techniques are going to result in higher tolls to the users because of the way they’ve been managed relative to a publicly owned toll road.”

Hecker went on to say that the way these deals are typically done in the U.S. is vastly different from the way they are done overseas – something the GAO would like to see change.

“In the deals that we looked at domestically, where this process is just beginning, a lot of the focus is on the contract terms. … it was just kind of a big numbers game and getting the terms right,” Hecker said.

“This contrasts very significantly with the experiences in the rest of the world. They have much more rigorous up-front analyses, varying multiple-staged reviews of public interest, multiple dimensions, they have public-sector comparisons – how it compares to what the public sector could do – and those are very distinct, very well developed and present an opportunity for a lesson learned in the U.S., and that was one of our main recommendations.”

Bingaman came back to Hecker’s criticism of the bidding process later in the hearing when he mentioned testimony from another witness at the hearing – David Enright of the New Jersey-based financial consulting firm Northwest Financial.

Enright testified that if state and local officials in the U.S. had done the kind of analysis that officials in Europe do, there probably wouldn’t have been approval for as many road and bridge lease deals in this country.

“Do you have any views on that?” Bingaman asked Hecker.

Hecker said she didn’t think such reviews would have necessarily meant that U.S. officials wouldn’t have gone along with the transactions, but she did qualify her statement.

“I think that the public management of much infrastructure has not been very efficient and there are opportunities to gain benefits and efficiencies,” Hecker testified.

“I don’t think the full costs were very transparent. I don’t think they were detailed. I don’t think potential impact of transfers from the interstate commerce that would fund this, and transferring that to lower stake roads, was really evaluated.”

The GAO’s Hecker also said that she thought that there were a host of issues that weren’t fully evaluated. She said she would “have to agree that the cost of borrowing for these was more expensive …”

“It’s more expensive for the private sector to borrow or to use equity than it is for the public sector to use municipal debt,” Hecker testified. “But it’s whether you get enough benefits in exchange. There are no deals in Europe or anywhere where they monetize the assets the same way we’ve seen here. We never saw that anywhere.”

Bingaman asked her to explain that statement further.

She explained that the focus of both the mayor and the governor in many of the other deals now is to say to the advisors, “Get me a deal that maximizes the cash that I can take out of this asset.” Hecker added that the bid process used in the U.S. has fallen short.

“They (state and local officials in the U.S.) take pride that their whole bidding was a piece of paper with a single number on it – their whole focus. In Australia, in Europe and other places, the bid (process) is competition for the lowest tolls,” she testified.

Bingaman asked Hecker to confirm that what she was saying was that the competition in other countries is about who can keep the tolls the lowest, rather than who can give the government the biggest up-front payment.

“Right,” Hecker testified.

Later on, Bingaman asked the New Jersey financial consultant, Enright, a question that cut right to the heart of the debate over public-private partnerships. Specifically, Bingaman wanted to know which would ultimately cost the public more money – a publicly run highway or a privately run highway?

“Mr. Enright, maybe I’m reading too much into your testimony, but my impression is that your conclusion that the public sector can finance road infrastructure more cheaply than the private sector can and therefore these so-called public-private partnerships end up costing people more in the long run than if the government just went ahead and maintained the roads,” Bingaman said.

“You’re correct,” Enright said. “The public sector is in a position to deliver a much lower cost of capital and therefore keep the user charges as low as possible.

“The private sector (has the incentive) to make a profit, that’s their job. We did separate analyses for both Chicago and Indiana – very extensive – and concluded in both cases that the public sector could have done just as well and held on to the asset and charged lower tolls and made the same amount of money. The problem in infrastructure in (this) country is not capital, the problem is the willingness to charge people for the infrastructure that they want to use.”

In the end, Bingaman promised to schedule more hearings to further examine who really benefits from public-private partnerships.

– By Terry Scruton, staff writer