Link to article here.

This statement sums up his column and why politicians like Perry, Hutchison (despite her ad that indicates she’s against foreign-owned toll roads like the Trans Texas Corridor, her transportation plan states she FOR road privatization), Cornyn, Nichols, and others continue to push the privatization of our public roads:

It’s not about doing the right thing for Texas; it’s about selling out Texans for Wall Street’s fun and profits.

Toll Roads: By the Numbers

Posted Friday, Jan. 08, 2010

Special to the Star-Telegram

“I’m not real fond of raising [gas] taxes when there’s a recession going on.” — Texas Governor Rick Perry, quoted at www.rickperry.org

Our governor keeps shifting his excuse for opposing the gasoline taxes that would bring all Texans highways equal to the sharply increased traffic demand. Gov. Perry’s position, quoted above, rings false for several reasons:

1. He was against raising the gasoline tax in the best of financial times. You’ll find out why in a moment.

2. The proposed tax that Perry was rejecting to get our highway construction in gear to accommodate past and future growth was one thin dime per gallon.

3. Of all the things government does with tax dollars that give huge immediate returns to the national or state GDP, infrastructure investment tops a very short list. Some have suggested that every dollar invested in new roads adds $6 to the economy as it is spread around. That’s an overstatement, but easily $1.50 or more returns to the economy for every new highway dollar spent.

4. Highway funds go to hire people to build roads and supply the construction material: Therefore, road construction quickly lessens any recession’s effect.

Step Over a Dime: Expensive PR

Years ago I wrote that, having had the same gasoline tax for nearly 20 years, Texas easily could add a dime to the price of gas and get the roads built that we desperately need. That dime could come close to fully funding new construction to lower the congestion caused by our massive growth. This was the legitimate use for such funds; after all, government is supposed to invest for our economic future.

Looking at Department of Energy data on gasoline use in Texas, over the past decade that dime per gallon could have added close to $12 billion to our highway fund.

Keep in mind that 11 years ago gas was selling for 99 cents, so a dime per gallon would not have been missed. Come to think of it, drivers would have missed that amount even less when gasoline was $4 a gallon. But therein lies the hypocrisy: Elected officials, both state and federal, refused to raise taxes to fund new highways claiming “no new taxes” — but said not a word when speculators took oil from under $12 a barrel in 1999 to $147 in the summer of 2008. A dime for needed highways, very bad; but untold hundreds of billions of dollars for oil speculators is OK?

Nobody likes higher taxes, but that’s because the average person doesn’t perceive any extra benefit from paying more. But public roads benefit everybody — and everyone can identify this smart use of public funds. And now? Allowing private corporations to build toll roads that everybody will have to use is just “new taxes” under a different name.

“Value-Priced” Motoring

When toll operators find their ventures insufficiently profitable they simply raise their tolls — again and again. Doubt that? Just look at the recent toll increases on the NTTA projects over in Dallas and Collin counties.

Maybe it’s time someone explained what it really costs you to drive on a toll road, as opposed to that extra dime a gallon to buy roads for everyone. You need to know this, because apparently Dallas Fort Worth will soon become America’s new Toll Road Capital.

Gordon Dickson published the most recent information on new toll roads in the Star-Telegram on December 27, 2009. His story contained this news: “Tolls could go as high as 75 cents per mile when congestion is at its worst. That could be more than five times higher than the average 14.5 cents per mile that motorists currently pay on Dallas-area toll roads. It’s a concept called ‘value pricing.’”

Up to 75 cents a mile, and it’s called value pricing?

That’s as Orwellian as doublespeak like “war is peace” and “freedom is slavery.”

Let’s Do the 4th-Grade Math

Building a toll road that you have to use has the exact same effect as paying a higher tax on gasoline to use that highway. Remember, whether the road is free or toll you still pay 38.4 cents in federal and state gasoline taxes; that’s the baseline for this calculation.

We will assume that your vehicle averages 20 miles per gallon: If you drive that vehicle 20 miles on a toll road charging the maximum 75 cents per mile, you pay your 38.4 cents in current taxes plus another $15 in tolls. Therefore tolls and taxes to drive on that road total $15.38 per gallon of gasoline. And to think you were complaining when gas was four bucks.

Even if you use the NTTA system and pay “only” 14.5 cents toll per mile, the net additional cost for each gallon of gas you burn on those toll roads means that you’re out the same as $3.28 per gallon for the luxury of driving on their private highway. And for $3.28 per gallon all you get is one road.

Money Distracts; Big Money Blinds

It’s not just Texas that is refusing to deal with crumbling, outdated or inadequate highway systems and instead turning the task over to private hands. But Texas is abdicating its sovereign duty to protect its citizens from the financial pressures of the highway privateers, not to mention its responsibility to build infrastructure for economic growth.

So how did politicians get the idea that privatizing roads across America was an acceptable future?

Two words: Goldman Sachs.

Yes, large Wall Street investment banks, led by Goldman, started advising states across the nation on how to raise fast money by diverting the most necessary publicly owned assets — roads — into private ownership. You have to admit, it’s brilliant, because it’s a forced and guaranteed market: Americans can’t get out of driving.

As Daniel Schulman and James Ridgeway wrote in their scathing article, “The Highwaymen,” in January of 2007, “Many similar deals are now on the horizon, and MIG and Cintra are often part of them. So is Goldman Sachs, the huge Wall Street firm that has played a remarkable role advising states on how to structure privatization deals — even while positioning itself to invest in the toll road market.

“Goldman Sachs’ role has not been lost on skeptics, who accuse the firm of playing both sides of the fence. ‘In essence, they’re double-dipping,’ says Todd Spencer, executive vice president of the Owner-Operator Independent Drivers Association, a truckers’ group that opposes toll road privatization. ’They’re basically in the middle, playing one side against the other, and it’s really, really lucrative.’”

How does “really, really lucrative” for Wall Street translate into “value pricing” for us? It doesn’t. But it’s easy to see how getting 75 cents per mile for permission to drive on a single highway could be an extremely valuable price — for whoever owns that stretch of road.

Oh, and one other thing. These highway privateers can fully deduct the highway’s depreciation for the first 15 years of the lease. So they shelter their income from their highways and then some. That’s one reason why the non-partisan GAO released a study last summer, which concedes that there could be some upside to the concept, also warned that more studies need to be done now on “how best to identify and protect national public interests in future highway public-private partnerships.”

When Will This End?

In many states and before it’s over likely in Texas, roads already bought and paid for by taxpayers either have been or will be sold off to the highway privateers. Now that’s the ultimate insult: Citizens bought the road and maintained it, but the fact that so many drivers use them makes it financially attractive for the state to resell them to private concerns for hard cash. (Notice that no one is considering privatizing Texas’ Farm to Market Roads. There’s just not enough traffic for the expense.) Then those buyers recoup their investment by charging everyone new tolls — under contracts that often extend up to 99 years.

Worse, there’s more evidence of how Wall Street’s quiet PR campaign distorted this issue with the public. Just a few years ago Goldman Sachs put $3 billion into an account for investments into infrastructure, including highways. Goldman also gave $10,000 to Hillco Partners, who lobbied for the 2001 Texas ballot measure to allow for privately operated roads. According to public information, between 2002 and 2005 Goldman paid Hillco lobbyist J. McCartt $95,000 to continue this effort of privatizing our highways. And J. McCartt is a former aide to —you guessed it — Texas governor Rick Perry. No wonder Governor Perry refuses to release the minutes of his meetings on the privatization of our highways.

So, have you been sold on the idea that privatizing roads is a necessity, because our state has no money for new roads and, citing its “no new taxes” policy, steadfastly refuses to raise the gasoline tax by even a dime to build them? Think again. We’ve been set up.

The people selling this “innovative” concept are the same people who deregulated our utilities, leaving Texans paying the nation’s highest electricity rates. It’s not about doing the right thing for Texas; it’s about selling out Texans for Wall Street’s fun and profits.

© 2009 Ed Wallace

Ed Wallace has received the Gerald R. Loeb Award for business journalism, given by the Anderson School of Business at UCLA, and is a member of the American Historical Association. He reviews new cars every Friday morning at 7:15 on Fox Four’s Good Day, frequently contributes articles to BusinessWeek Online and hosts the top-rated talk show, Wheels, 8:00 to 1:00 Saturdays on 570 KLIF. E-mail: wheels570@sbcglobal.net, and access all of Ed’s work at his Web site, www.insideautomotive.com.

Link to article here.

NTTA leaders fear Dallas area’s toll road push moving too fast
Monday, December 28, 2009
By MICHAEL A. LINDENBERGER / The Dallas Morning News

As the Dallas area rushes forward in pursuit of more toll roads, warnings that it may be doing so at its own peril have been emanating from an unexpected corner: the top leaders of the North Texas Tollway Authority.

Even as the NTTA enters the final weeks of negotiations that all sides expect will conclude by Feb. 28 with a multibillion-dollar deal to build two new giant toll projects in Dallas and Tarrant counties, the agency’s two top board members have been warning that the region may be moving too fast on toll roads.

“People are going to realize that every new road in the metroplex is going to be a toll road,” NTTA vice chairman Victor Vandergriff said at a recent meeting of the NTTA board.

He was only exaggerating a little.

The Regional Transportation Council approves a 25-year plan for area transportation projects every five years – and the current plan has included a map with precious few free roads. Roads paid for with taxes have emerged as something of a luxury, one that the RTC no longer sees as affordable, given the rising needs and insufficient funds from Austin and Washington.

A new plan is in the works now, and officials say it could shift away from tolls.

But for now, tolls are fast becoming the dominant way local officials hope to move Dallas area residents from one place to another.

The NTTA already manages three major toll roads – the Sam Rayburn Tollway, the Bush Turnpike, and its oldest and still most lucrative, the Dallas North Tollway – and is collecting tolls on the first stages of a fourth, State Highway 161 in Dallas County.

Over the next six weeks or so, NTTA is expected to reach an agreement with the state Department of Transportation to complete Highway 161 and build the Southwest Parkway and Chisholm Trail toll roads in Tarrant County. A major expansion of the Bush Turnpike is under way now, and officials in Dallas continue to hope that NTTA will build the Trinity Parkway near downtown. State officials have said they want to add new tolled lanes to Interstate 35 between Dallas to Denton, as a means to pay for the expansion of that highway.

In addition, two major private toll roads, the region’s first, are expected to begin construction during the next 18 months. The Spanish toll road developer Cintra has teamed with other investors to rebuild LBJ Freeway in Dallas and Interstate 820 and State Highway 183 in Tarrant County, and will add what will probably be the costliest toll lanes in Texas on each.

Both toll projects are expected to be completed by 2016 or sooner.

“Even our free roads will soon have a toll component,” Vandergriff said.

Both Vandergriff and NTTA chairman Paul Wageman, who has also voiced reservations about the extent of tolling in Dallas, say toll roads are essential as Texas tries to keep traffic moving in the fifth-largest metropolitan area in the U.S.

But they worry that adding too many tolls, too quickly, could erode the one thing that makes them such a valuable tool in the first place: the willingness of drivers to pay their tolls.

“I do have concerns … that the public will only tolerate a certain amount of tolling,” Wageman told reporters at a news briefing in Arlington earlier this month. “We understand that to get the roads built, there is going to be a tolling component [to help pay for them]. But we are concerned because ultimately we must have public receptivity to tolling. We do not want to be in a position where that receptivity goes away, as that ultimately affects the business we are in.”

Toll roads remain a daily trade-off for hundreds of thousands of NTTA customers, who pay to save valuable time getting to work or the airport or to a meeting after school.

But will they remain popular, in the face of rising rates and as they spread to every corner of the region?

Vandergriff and Wageman voiced their worries separately this month as negotiations over Southwest Parkway and Highway 161 accelerated and brought into focus the debt required to build those roads, on top of the $7 billion NTTA already owes.

All that debt will be paid for by tolls – and if the tolls don’t produce enough revenue to satisfy bondholders, the rates would probably have to jump, just as they did earlier this year when NTTA increased rates by about 23 percent.

But raising rates will only work if enough drivers are willing to pay the higher rates to offset those who abandon the toll roads.

Already, some drivers have begun shunning the turnpikes.

Nathan Maxfield, a 35-year-old Web designer, used the Dallas North Tollway when he lived in Frisco and worked in Addison. But he began cutting back even before he moved to Plano.

In September, he started a Facebook group called People Against the NTTA.

Only about 60 others have joined his group, but Maxfield said frustration with NTTA’s rates is a common theme among his friends and colleagues.

“It was just the rising costs, and toll roads were just spreading everywhere you looked,” Maxfield said, explaining why he created the group. “It seemed like pretty soon, we wouldn’t be able to get anywhere without paying a toll.”

The North Central Texas Council of Governments is seeking input on how to shape the region’s transportation network over the next 25 years and will literally redraw the map that for the past five years has shown nearly every new road as a toll road.

If the map for the so-called 2035 Plan is to look any different from the 2030 Plan, it will likely require a mix of new taxes, new approaches, and more rail.

Michael Morris, transportation director for the council of governments, just completed a series of public hearings, and written suggestions are encouraged. Send them to mobilityplan@nctcog.org.

Toll prices in Tarrant will vary based on traffic conditions

Posted Sunday, Dec. 27, 2009

By GORDON DICKSON

gdickson@star-telegram.com

Toll lanes are coming back to the Fort Worth area after more than a three-decade absence, with a few new and expensive wrinkles.

Tarrant County hasn’t had a toll road, unless you count the Dallas/Fort Worth Airport entrance, since the Dallas-Fort Worth Turnpike was converted into a freeway (now Interstate 30) in 1977.

But more toll lanes are on the way in the western Metroplex within four years. Examples include the high-occupancy vehicle lanes under construction on I-30 in Arlington, Loop 820 in north Fort Worth, Haltom City and North Richland Hills and Texas 114/121 in Grapevine.

Tolls could go as high as 75 cents per mile when congestion is at its worst. That would be more than five times higher than the average 14.5 cents per mile that motorists currently pay on Dallas-area toll roads. It’s a concept called value pricing, a way to limit traffic on the toll lanes and squeeze more revenue from motorists to pay for roads.

Supporters of value pricing, which also drops the price of tolls when traffic is light, say motorists will have a choice — stay on the crowded main lanes, or pay their way out.

“While there will be dynamic pricing, there will still be the general-purpose lanes, and in most places we’re adding frontage roads,” said Amanda Wilson, spokeswoman for the North Central Texas Council of Governments.

Where the tolls will be

Several years ago, the Regional Transportation Council set a ceiling of 75 cents per mile on variably priced toll lanes.

The lanes would operate electronically, without toll booths. Users could prepay with a TollTag, a windshield-mounted device that sensors read as a car travels on the road. Or, for cars without a TollTag, a camera system would take a picture of the license plate and mail the registered owner a bill.

Examples of projects:

In Arlington, high-occupancy vehicle lanes on Interstate 30 could be converted to toll-managed lanes by 2011. Toll rates haven’t been set.

In 2004, the Federal Highway Administration selected I-30 as a “value pricing pilot project,” which allowed it to get around a federal law banning new tolls on interstates. The transportation council was awarded $472,000 in federal funds to plan and design the lanes from Arlington to Dallas. Single-occupant cars would pay the full toll, while carpoolers, motorcyclists and buses could use the lanes free or at a discount.

The lanes currently end at Baird Farm Road/Legends Way in Arlington but eventually would be extended to Oakland Boulevard in east Fort Worth.

In Northeast Tarrant County, a development team led by Spain-based Cintra plans to rebuild Loop 820 and Airport Freeway beginning next year. The work on the North Tarrant Express project is expected to take four years.

Existing lanes would remain free, but tolls on two managed lanes in each direction would range from $1.20 to $6.50 each way for a 13-mile trip — 9 to 50 cents per mile.

In Grapevine, developer NorthGate Constructors plans to rebuild seven highways collectively known as the DFW Connector — including two managed lanes in each direction on Texas 114/121. Exact rates haven’t been disclosed, but drivers can expect to pay an average of 64 cents for a four-mile trip beginning in 2014, and 96 cents by 2029.

Southwest Parkway

In Fort Worth, the North Texas Tollway Authority is developing Southwest Parkway, a 28-mile toll road from downtown to Cleburne. The first eight miles, from I-30 to Dirks Road, are scheduled to be under construction next year.

Although Southwest Parkway won’t be a variable-price road, it is expected that the toll rate will be 20 cents per mile by 2013, compared with the 16 cents motorists are expected to be charged on Dallas-area tollways. The tollway authority approved toll rates this year that will gradually increase through 2018, with Southwest Parkway always 4 cents higher than the standard rate.

Fort Worth officials agreed several years ago to the higher rate on Southwest Parkway to offset the cost of additional bridge work and landscaping, as well as an expected loss of revenue from keeping the speed limit no higher than 50 mph in central Fort Worth.

Elsewhere

Value-priced toll roads are increasingly being used by metro areas to limit traffic on toll roads and to generate new revenue sources for roads.

In Houston, local officials recently approved new tiers of pricing on the Katy Freeway toll lanes — $1 each way during light traffic, and $2 to $4 during peak periods.

In Southern California, the 91 Express Lanes project has been around since 1995, allowing travelers on the Riverside Freeway to pay their way around traffic — up to $9.90 for a 10-mile trip during the busiest hour of the week, 4 p.m. Thursdays.

The road has become such a part of the L.A. streetscape that gift cards are even sold on the official Web site, www.91expresslanes.com.

Can it be long before cards like that are stocking stuffers in Fort Worth?

Link to Dallas Morning News article here.

Dallas area may be first to see state’s new plan to fund toll roads
Monday, November 23, 2009
By MICHAEL A. LINDENBERGER / The Dallas Morning News
AUSTIN – Lawmakers might have left the Capitol earlier this year without getting much done when it comes to transportation. But they were clear on one point: They wanted the Texas Department of Transportation out of the business of building privately financed toll roads.

The Texas Legislature beat back attempts to extend the authority for so-called comprehensive development agreements – 50-year contracts with private companies that agree to build roads in return for toll revenue – and the department’s ability to enter into the contracts expired Aug. 31.

But less than six months later, state highway bosses may have found a loophole. And the Dallas area, already home to more toll roads than anywhere in Texas, probably is the place where they will try it first.

Last week in Austin, Texas Transportation Commission members told staff to submit plans by January for how to fast-track a roughly $4 billion expansion of Interstate 35E between Dallas and Denton. Officials say the project is a prime candidate for a new kind of financing that they concede looks a lot like the private toll deals ruled out by the Legislature.

“We’ve got to use all of these innovative ways of building highways or we won’t be building,” said commission member Ted Houghton of El Paso in an interview Friday. “It’s a fact of life. If you want us to build roads, then we are going to move forward using these kinds of tools.”

The tool in question is called pass-through toll financing, and is different, though not very, from the private toll deals lawmakers have put on ice.

Here’s how it works: A private company, usually backed by a group of banks and other investors, agrees to use its own money to build a state road, usually with the help of at least some tax dollars. In return for the new road, Texas promises to make payments to the firm based on the level of traffic it attracts. The more vehicles that “pass through,” the bigger the payment the private company will receive.

Officials say such deals involving big toll roads could last 30 years or more. So far, though, pass-through financing has only been a way for Texas to pay for a handful of smaller free roads. The per-vehicle payments simply pay back the investment by the private company, or in some cases a local government, and are not passed on to drivers in the form of tolls.

But that’s set to change, as highway officials eye using pass-through financing to deliver big toll projects in North Texas and elsewhere. Doing so will require some changes in the department’s rules, but is entirely within the department’s authority, said John Barton, assistant executive director of the Department of Transportation.

First up? Most likely the expansion of I-35E into a mixed road with both tolled lanes and free lanes, much like the LBJ Freeway will be once the Spanish firm Cintra rebuilds it over the next five or six years.

The department had planned to rebuild I-35E as a privately financed toll road using a comprehensive development agreement until the Legislature failed to extend the law that made that possible. Now it sees its choices as either delaying the work for a decade or more, or using the pass-through financing to get construction started in as soon as two to three years.

Though the deals are structured differently – in a pass-through deal, private firms take on less risk, and state payments are subject to a cap set by contract – they will come across as very similar to drivers, and to many others who opposed the deals known as comprehensive development agreements, or CDAs.

“These deals look very much like a CDA, and I want to make sure you understand that,” executive director Amadeo Saenz of the Transportation Department told a Senate hearing in El Paso this month. “We’re getting a lot of push from Denton and Dallas County [to complete more projects there]. I want to be forthright and maybe say, ‘Be careful what you are asking for.’ If you look at a private pass-through model project, it is very similar to a CDA. You are using a private firm to bring equity to the project.”

Sen. John Carona, R-Dallas, took that in stride, conceding that the agency had been woefully underfunded by the Legislature in recent years, and had to explore all of its options. But he lashed out at Houghton when he said the department also would be willing to shop a major Tarrant County toll project to private investors, if only the North Texas Tollway Authority first would relinquish its rights to the road.

“The community is not at all excited about you coming in and building toll roads,” Carona said. “NTTA builds our toll roads. … We don’t want you running toll operations in North Texas. The Legislature has been very clear.”

Houghton said Friday, “That’s fine. That’s a choice they can make.” The trouble, he said, is that NTTA doesn’t have the money to build the $1.8 billion toll project, known as the Southwest Parkway/Chisholm Trail project.

NTTA has confirmed it could need $1 billion in tax dollars or other help to keep its promise to build that road.

If that’s the case, Houghton said, why not let the state take it on, and see what kind of deal it could strike with a private firm that would compete for the opportunity?

“Competition does amazing things,” Houghton said. “It really causes the people across the table to sharpen their pencils.”

Instead, Carona wants TxDOT to guarantee NTTA’s loans to help it lower its costs, something the department has already offered to do on another area toll road, State Highway 161.

“I get the impression that you don’t want to work with NTTA,” Carona told Houghton in El Paso.

Houghton replied that his agency wants NTTA to flourish, but that guaranteeing both loans could cost the state as much as $40 million a year for many years to come.

On Friday, he said the department will not backstop the loans on both projects.

“NTTA has some decisions to make,” he said. If it wants the credit enhancement on Southwest Parkway, then it can’t have it on State Highway 161, he said. In the end, if NTTA can’t afford to do Southwest Parkway, then it should let it go, he said.

Transportation Commissioner Bill Meadows of Fort Worth, a powerful advocate for the Southwest Parkway project, said Friday that negotiations over how to structure the credit enhancement have resumed in earnest, and could be headed for a breakthrough.

If the negotiations fall through and NTTA can’t build the Southwest Parkway, then TxDOT will consider using pass-through financing to find a private partner who can, but only with NTTA’s permission, he said. “We’ll have to put every option on the table. This isn’t easy. It’s a billion-dollar hole they are trying to fill.”

No matter what happens with the long-running talks with NTTA, Saenz said his agency is determined to seek new solutions for Interstate 35E. And he is meeting with lawmakers to give advance warning that the department is proceeding with a new way of building privately financed toll roads

“I brought this up in El Paso and said it last month in Fort Worth. I don’t want to get beat up on this, but I am getting a lot of pressure … to move this project forward,” Saenz said. “I am a problem solver, and we do have a way to get these projects done.”

Under a comprehensive development agreement:

•A private firm enters into an agreement with the state to use its money, possibly with some public involvement, to build a road.•In exchange, the firm gains the right to collect tolls on that road for as long as 50 years.

•Deals can involve large upfront payments to the state for the right to collect tolls.

•The company shoulders the risk of profit or loss based on the accuracy of traffic projections, construction-cost estimates and other factors.

Under a pass-through financing deal:

•A private firm enters into an agreement with the state to use its money, possibly with some public involvement, to build a road.•Deals typically are for shorter periods of time than CDAs – 20 to 30 years as opposed to 50.

•The state agrees to pay the private firm for each vehicle that uses the road, within a maximum and minimum range.

•The state receives toll revenues, which are used to make pass-through payments.

•The state retains most of the risk.

•The deal can be used for free or toll roads.

Some private toll roads in Texas:

LBJ FREEWAY: It’s a free road now, but Spanish road firm Cintra will begin rebuilding it as a mix of free lanes and tolled lanes beginning mid-2011 or sooner. The $2.1 billion project will take five years, but once completed, drivers will have a choice: Sit in traffic on the free lanes or pay tolls that could reach $1 a mile to take the tolled lanes.

NORTH TARRANT EXPRESS: Another hybrid project, the state of Texas committed hundreds of millions of dollars toward this $2 billion effort. But the work will be done by a team led by Cintra, which will cover the rest of the costs, and collect tolls for 50 years. Construction begins next year and the highway will open by 2015.

INTERSTATE 35E: Not yet a toll project, but with the Transportation Department strapped, the only way this highway will be widened anytime soon will be if toll lanes are added. State officials say the only way it will be able to afford to build it anytime soon will be to partner with a private firm. Once funding is resolved, construction could begin within two to three years.

STATE HIGHWAY 130: In Austin, Cintra paid $25 million upfront as part of a deal struck in 2007 that gives it the right to build and operate a 40-mile stretch of the highway from Austin to Interstate 10 near San Antonio. The state gets a cut of the tolls and avoids costs estimated at well over $1.5 billion. Construction is under way and the road could open as soon as 2012.

Texas State Representative Carl Isett already introduced a bill, HB 1815, in the last legislative session to do this very thing – create a whole state agency that does nothing but write contracts that sell-off Texas roads to Wall Street in sweetheart deals. This is an abomination for taxpayers and anyone who cares about maintaining control of our public infrastructure. It’s obvious the big money wants to control our infrastructure through these toll road monopolies, and we have far too many politicians willing to sell-out Texans to give it to them.

Calls Come for ‘Programmatic’ P3 Approach
By Audrey Dutton
Bond Buyer
Tuesday, November 10, 2009
WASHINGTON — Market participants are pushing for states or the federal government to take a “programmatic” rather than a piecemeal or project-by-project approach to financing infrastructure through public-private partnerships.

But states may be better equipped than the federal government to assemble a P3 program, and the Georgia Department of Transportation’s newly launched multi-project P3 initiative could provide a case study, some said last week at The Bond Buyer’s 10th annual Transportation Finance/P3 conference in Dallas.

“Right now it’s too fractured” in the P3-financed infrastructure sector, Chee Mee Hu, managing director for Moody’s Investors Service, said during an interview last week, adding, “It’s almost opportunistic rather than programmatic” how P3s are evolving now in the U.S.

State departments of transportation currently have to do “a lot of footwork” to put together P3 deals and are essentially reinventing the wheel for each project-based partnership, she said.

“One thing we don’t have in a rational way are P3 proponents,” Hu said. “In Canada, they have provincial groups” that focus on P3 programs. The U.S. needs “some agency at the state or federal level” to act as a clearinghouse or design a centralized program for P3s, she said.

Read the rest of the story here.

IMMEDIATE RELEASE

(November 6, 2009) – In today’s Star-Telegram article, Texas Transportation Commissioner Ted Houghton reversed his position on the department’s involvement in toll roads. The article states Houghton “wants the North Texas Tollway Authority to withdraw as the lead partner in the Southwest Parkway project and let the state seek a private developer to build the toll road from Fort Worth to Cleburne.”

When Houghton was up for confirmation in the Texas Senate, he stunned the Chair of the Nominations Committee, Senator Mike Jackson, when the Commissioner said in the hearing on May 13, 2009, “I think TxDOT should be out of the toll business. That’s not our business. It’s the NTTA’s business, it’s the CTRMA’s business, it’s the El Paso RMA’s business.”

Jackson said he was surprised by Houghton’s comment and asked him “and is that a dramatic change in your position over the last few years?”

Houghton acknowledged that it was.

Jackson then asked him what changed his mind and Houghton replied, “We have RMAs that are created. We have people like NTTA and HCTRA that have a history behind them and know how to do it. That has changed my mind, that local RMAs should be the, and local toll road authorities…should be those agencies that build those projects…and again if we (the department) have the resources….enable these authorities to build those projects to give ’em that credit lift, or to participate….There’s a menu to be able to participate, but not to run these toll, no, these toll projects.”

Apparently, Houghton lied to the Nominations Committee to win confirmation and now that lawmakers have left Austin, it’s back to business as usual at TxDOT. The Perry-appointed Transportation Commission is again interfering with local decision-making and attempting to sell our Texas highways to private developers in its classic “it’s our way or no highway” form.

This development comes after more than 80% of Texas voters in Tuesday’s election voted to keep Texans’ land from being taken through eminent domain and given to private developers for profit. However, Proposition 11 doesn’t protect Texans’ private property from being taken in the name of public use for a state highway then sold to foreign entities for private gain.

“Houghton and TxDOT in their arrogance, fail to grasp (or care) that they are under Sunset review once again, and taxpayers and legislators alike are none too happy with them on ANY front. Houghton’s attempt to strip the NTTA of the Southwest Parkway project so the department can sell it off to the highest bidder on Wall Street is another example of why TxDOT has been in perpetual hot water.

“Houghton recently identified himself as the most arrogant commissioner of the most arrogant state agency in the state of Texas. Perhaps a new addition to his list is in order. Let’s add: the most untruthful commissioner,” suggests Terri Hall, Founder/Director of Texas TURF.

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Link to article here.

Official says tollway authority should bow out of Southwest Parkway
Thursday, Nov. 05, 2009
By GORDON DICKSON
Fort Worth Star-Telegram
A Texas Transportation Commission member wants the North Texas Tollway Authority to withdraw as the lead partner in the Southwest Parkway project and let the state seek a private developer to build the toll road from Fort Worth to Cleburne.

Commissioner Ted Houghton of El Paso discussed his recommendation about Southwest Parkway in an interview a day after the tollway authority said that the toll road is expected to cost $2 billion but that only $1 billion is available. The tollway authority said it would needs state aid to start construction next year.

Houghton wrote in an e-mail to Commissioner Bill Meadows of Fort Worth this week that his “recommendation on the project on the western end of the Metroplex is that NTTA turn that project back to us and we utilize the private pass-through tool that would bring in private equity.”

A third party would pay for Southwest Parkway upfront and be repaid over time with tolls from the road.

Pass-through financing has built smaller city- or county-funded projects in other cities and would not be covered by the Legislature’s ban on comprehensive development agreements between the Texas Department of Transportation and private developers, Houghton said.

Concession fee

Houghton, one of five state transportation commissioners, also said that the Plano-based tollway authority had requested a $200 million discount on another Dallas-Fort Worth toll project: Texas 161, which is under construction in Irving and Grand Prairie and is a gateway to Cowboys Stadium in Arlington.

Last year, after months of intense negotiations, the state Transportation Department and the tollway authority agreed that the market value of the Texas 161 toll road from Texas 183 to Interstate 20 was $458 million. That would be the “concession fee” the authority would have to pay the state to take over the project.

The authority hasn’t decided whether to take over Texas 161.

But Houghton and other state officials have balked at the authority’s requests for financial aid, including a request for the state to use its gas-tax-supported Fund 6 as a guarantee against certain authority debts, and a loan of $300 million to $500 million from the state infrastructure bank.

State law gives the authority primacy, or first dibs, on toll projects in Dallas-Fort Worth, and the Transportation Department can’t pursue private development of a toll project unless the authority declines it.

The first portion of Southwest Parkway, an eight-mile stretch from Interstate 30 in west Fort Worth to Dirks Road in an undeveloped part of the city’s southwest side, was expected to be under construction in 2010.

‘I’m all ears’

Tollway Authority Vice Chairman Victor Vandergriff of Arlington said Thursday that he was unaware that a pass-through tolling arrangement with a private developer could even be done.

“I’m all ears,” he said. “I would be pleased to understand that, and be supportive of that, if it will get the project done.”

But Vandergriff reiterated that the authority wants to build Southwest Parkway.

Negotiations between the authority and Transportation Department are reaching a crucial phase, and Vandergriff said he doesn’t want to “point a finger” of blame for the Southwest Parkway funding gap.

But he did say that part of the problem is that the Transportation Department withdrew about $211 million in gas-tax-supported funds from the project to make ends meet on other Tarrant County projects, including the proposed expansion of Northeast Loop 820 and Airport Freeway.

That funding loss is part of the reason the authority is seeking a state loan, Vandergriff said.

Earlier this year, Johnson County officials, who refer to the project as Chisholm Trail, warned that moving gas tax funding out of the project could delay it.

“We’ve got a very tough finance market and very financially challenged agency” in the Transportation Department, Vandergriff said. “It really doesn’t do any good for one side or the other to point fingers unduly. I think it’s premature to say the parties can’t work together to get it done.”

Link to article here.

Privately run infrastructure deals dry up

October 27, 209

That could leave taxpayers on the hook for more of the $200 billion a year needed to maintain the nation’s transportation system, according to federal estimates.

An era of privately operated infrastructure seemed near when Chicago leased its 7-mile Skyway for $1.8 billion in 2003 and Indiana leased a 157-mile toll road for $3.8 billion in 2006, deals that had other governments rushing to cash in, too.

States had proposed selling all kinds of things, from highways to lotteries, to raise $10 billion or more. In return, the private companies would operate the assets during long-term leases and bank the revenue.

The purchase of government assets has all but stopped as credit has dried up. Now, with tax collections falling, state and local governments are scrambling to finance projects.

The biggest casualty so far: a $2.5 billion agreement to sell Chicago’s Midway Airport fell apart in June when investors could not round up enough money.

“Investors are skeptical. These are difficult times,” says Peter Samuel, editor of Toll Road News, a trade publication. The buyers of the Chicago Skyway and Indiana Toll Road “have lost their shirts,” he says.

Earlier this year, Macquarie Infrastructure Group said its toll road investments, which include the Chicago Skyway and Indiana Toll Road, had lost one-third of their value. The investments are made based on long-term, historic trends, company spokesman Alex Doughty says. “In any business, there’s likely to be peaks and troughs,” he says.

The high-priced deals were great for government, though. Indiana got paid in cash and is using the $3.8 billion to fund 400 road projects.

“We had great timing,” Indiana budget director Ryan Kitchell says. “We may never see those types of prices again.” Recent dead ends:

•South Carolina. The 16-mile Southern Connector, outside Greenville, announced it will default Jan. 1 on the $312 million borrowed to build the four-lane road. Traffic has been about half what was predicted.

•Pennsylvania. A Citigroup-led investor group withdrew a $12.8 billion offer to buy the 537-mile Pennsylvania Turnpike in September. Gov. Ed Rendell, a Democrat, had his proposal blocked in the Legislature.

•Florida. “Alligator Alley,” a 78-mile section of Interstate 75 that crosses the Everglades, received no bids when the state put it up for auction in May.

A few small deals are still alive. A Florida company has agreed to build and own a $100 million toll bridge in Chesapeake, Va., to replace a closed city-owned bridge. “Without private money, this bridge wouldn’t get built any time soon,” Chesapeake City Manager William Harrell says.

“These deals aren’t dead,” says John Schmidt, an adviser on infrastructure deals. “The economic logic makes too much sense.” The amount paid in cash may be lower, he says.

Link to article here.

Mississippi DOT stops Jackson Airport Parkway P3 – rating agencies No to investment grade
Posted on Wed, 2009-09-09 12:54
Mississippi DOT (MsDOT) have announced “suspension” of the procurement process for a private sector concession to build the state’s first tollroad in the modern era – Jackson Airport Parkway. The concession financing depended on federal TIFIA loan support which is only provided if the rating agencies provide an investment grade rating to senior debt.

Three shortlisted potential concessionaires told MsDOT they couldn’t get the needed investment grade ratings for their loan financing, an official told us, so they were not able to make proposals which were formally due next week – Sept 15.

A statement from MsDOT quotes Executive Director Larry L (Butch) Brown as “disappointed” but saying that the parkway “project, like many other greenfield toll road projects, is suffering from general economic weakness and tight credit markets which limit the amount of credit and capital available for new transportation projects.”

Private sector must show savings

Brown is quoted further: “The private sector needs to demonstrate that it can deliver meaningful savings versus a traditional MDOT financing and delivery plan.  For example, unless private sector bidders can genuinely deliver construction cost savings, operational savings, or financing savings, the numbers just don’t work.  In this economy, revenue projections are under pressure and investment grade ratings for the project’s senior debt are difficult to obtain.”

Shortlisted three

Three groups shortlisted to make proposals Sep 15 but unable to raise the capital were:

– Jackson Access Mobility Group (ACS and Dragados)

– Airport Parkway P3 Group (Cintra and Ferrovial)

– Global Via

They are Spain-based international groups active around the world in toll and other concessions.

Znachko

Brenda Znachko, chief financial officer at MsDOT says she gets the impression the rating agencies are generally negative about tollroads at present. She says she thinks the lack of any history of tolling in the state was also a handicap.

Znachko says they are not giving up on the project, but are considering alternatives. They will look at alternative ways of structuring the project as a concession, and also look at public financing using the credit of the state as backing.

She thinks the project is still viable as a tollroad, but it may need to be approached differently. MsDOT is supported by consultants Nossaman lawyers, JP Morgan finance, and URS engineers and traffic and revenue modelers.

MsDOT will take a new plan for advancing the parkway project to state commissioners later this year.

The project is designed to serve the most rapidly growing portion of the state, the eastern edge of the Jackson area. Although it would serve the Airport this by itself was not a major part of the projected traffic for the Parkway – which goes from the central business district east, then splits to make links to the north and south of the airport.

A URS traffic and revenue study produced for MsDOT shows toll revenues for the project at a toll of 18c/mile (11c/km) with a  Jan 2013 opening as 2015 $16m, 2020 $22m, 2025 $39m, 2030 $53m.

Project cost has been put at around $500m. The project consists of 20km, 12 miles of expressway standard road with at least four interchanges. Major structure needed is a bridge over the Pearl River immediately east of the central business district.

The project has alll its environmental permits.

Most of the engineering design is done.

80% of the right of way has been acquired.

There is strong support for the project from the key three cities, and virtually no public opposition.

Znachko has said they are flexible about the scope and staging of the project. They have already deferred a downtown end ‘pitchfork’ feeding three streets as something that can be added at a later date. To start with it would have just one downtown connection. The eastern ends have also been left flexible for staging also.

see http://www.theairportparkway.com/Home.aspx

summary of project:

http://www.tollroadsnews.com/sites/default/files/JAPflyer.pdf

TOLLROADSnews 2009-09-09