Despite threats from the feds, TxDOT forced to abandon Cintra bid for Hwy 121

Link to article here.

State Highway 121 was wrested from the grip of a foreign company, Cintra, and it’s now in the hands of the North Texas Toll Authority (NTTA), despite threats of sanctions from the Federal Highway Administration (FHWA). Talk about brazen! However, 16 miles of this 26 mile project are already built and PAID FOR WITH GAS TAXES (it’s INEXCUSABLE that it’s now converted to a toll road!). To make things worse, SB 792 allows even our public tolling entities to charge the HIGHEST POSSIBLE TOLLS! The FHWA’s behavior, repeated threat letters of withholding our federal highway revenue, then backing off thanks to Senator Kay Bailey Hutchison, then threats of sanctions, it’s clear the Bush Administration is a wholly-owned subsidiary of corporate hogs at the trough!

The FHWA is charged with protecting the public interest, and not only have they flouted that responsibility, they rabidly PROMOTED a foreign interest OVER the public’s, ON OUR DIME! James Ray at the FHWA let the cat out of the bag a few months ago, that the FHWA, Texas Transportation Commission, Perry, and Bush truly believe in state run capitalism (which is really fascism). This is beyond appalling…this has to be a criminal dereliction of duty!

Texas officials say they were forced to abort the Cintra concession
Toll Road News
August 23, 2007

Texas officials have revealed that in the past few days they discussed with the FHWA canceling the past approval of NTTA taking over SH121, together with canceling the Cintra concession. They got an assurance the cancelations would get Texas back in compliance with federal procurement law. They have sent us copies of two letters on the SH121 crisis both dated Tuesday Aug 21 TxDOT-FHWA, and FHWA-TxDOT.The first TxDOT-FHWA letter responds to Richard Capka’s blistering Aug 16 attack on Texas’ handling of the SH121 procurement which he cited as clear violations of federal law and regulations. See report to Janice Brown, FHWA rep in Austin TX the letter is signed by TxDOT deputy Amadeo Saenz and foreshadows actions taken today by the governing Texas Transportation Commission (TTC). It says they will consider canceling the Cintra procurement and canceling the decision (called a minute order) previously approving NTTA for SH121.

The letter then says: “We request FHWA concurrence that (these) actions…will be sufficient to bring TxDOT into compliance with federal law and not be subject to (sanctions)…”

The letter adds that further FHWA action on environmental clearance of SH121 is “critically needed” to move forward on SH121. See TxDOT-FHWA letter here.

The response from FHWA rep Brown to TxDOT’s Saenz says that the two proposed cancellations would indeed bring TxDOT into compliance with federal law and remove the basis for federal sanctions. It also says FHWA is working for “timely completion” of the environmental review. See FHWA’s Brown’s letter here.

TxDOT unpersuaded NTTA bid better but decision was local

Texas officials say it was their assessment Cintra provided the sounder proposal but that they had agreed to devolve responsibility to the Dallas-Ft Worth area council of governments’ Regional Transportation Council (RTC) which preferred the late proposal by the North Texas Tollway Authority (NTTA). Under Texas law SB792 they say they are required to defer to the RTC despite their doubts about the choice of NTTA’s proposal.

At the Texas Transportation Council meeting today the two cancellations were made:

Agenda item 8a passed as a new minute order notes that a RFQ for SH121 was issued March 2005 and after shortlisting a formal RFP was issued mid Aug 2006. Feb 28 the commission “conditionally awarded” the concession or comprehensive development agreement to Cintra.

However the instructions to proposers authorized TxDOT to suspend or terminate concession contract negotiations at any time – providing for cancellation of the procurement.

The resolution passed today says simply: “The commission has determined that it is in the best interest of the state to terminate the CDA negotiations with Cintra…” and “It is therefore ordered that the procurement… is canceled.” See text of 8a here.

Agenda item 8b outlines the origins of the NTTA move with the RTC asking on Mar 26 if NTTA wanted to top the Cintra bid. NTTA submitted a huge document (almost entirely fluff and puff – TRnews) May 18, but the RTC accepted it. June 28 the TTC set the RTC to negotiate some substance with NTTA giving them 60 days to produce a project agreement plus another 45 days for financial close. Text of 8b here.

Today’s minute order cancels those requirements giving the parties more time, saying environmental clearance is likely to take longer than the 60 days. The department has to come back to the commission with additional agreements to enable NTTA to take over SH121 for a period of up to 50 years.

Deal not done until the money arrives

Texas officials say the deal is far from done yet. One official said he has doubts that NTTA can come through with the financing promised the RTC. They think NTTA has stretched its borrowing power to, and perhaps beyond, prudent limits.

But caught between FHWA protests and the RTC-NTTA, and the requirements of SB792 they say they had no other alternative.

The officials say the RTC has taken a gamble with NTTA now that the Cintra procurement has been cancelled.

“If the NTTA doesn’t come through it is back to square one. We have to start a procurement all over again.”

The three bids back in February

We were given the bids by the three finalists in the procurement won by Cintra in February, socalled Form Ks. Cintra’s offer more than doubled the next from Skanska with Macquarie a bit further behind in third place. See table nearby.

Cintra says accept TTC decision

José Lopez, Cintra’s Austin-based director issued a statement after the Commission meeting:

“While we believe our proposal – with its guarantee of $7.3 billion in new and additional revenue to the Metroplex for SH121 and other transportation projects – was the better option for the state and Dallas-Fort Worth, we respect the commission’s decision.

“We want to thank the commissioners and the staff at TxDOT for the time and consideration they have devoted to this issue. We know they are working diligently to address the serious mobility challenges facing Texans, and we wish them, NTTA and the Regional Transportation Council only the best as they move forward with SH 121 for North Texas drivers.

“…we look forward to continuing our work in Texas, the U.S. and around the world assisting officials meet the increasing demands on infrastructure by improving roadways, relieving congestion and enhancing driver safety in the most cost-effective and efficient ways possible.”

Agreement reached NTTA, Regional Council and Dallas District TxDOT

NTTA, the regional council and Dallas District of TxDOT say they have finalized an interagency project agreement for SH121. Jorge Figueredo the new executive director of NTTA signed the draft agreement and submitted it to TxDOT. After it is signed by the executive director of TxDOT NTTA will have 45 days to financial close and delivery to TxDOT of over $3.3b – $2,500m plus $833m representing 49 future annual payments. In return they get a 50 year lease of SH121 and the rights to the toll proceeds in a kind of public sector concession.

Bill Hale of TxDOT Dallas office and Michael Morris of the RTC said in statements today that fuel tax funds are not doing the job of generating revenues needed. They see monetization of toll projects like SH121 as the only way to build needed new roads.

SH121 is 42km (26mi) long running northeast-southwest in the northern part of the greater Dallas area from US75 toward Dallas Ft Worth Airport. It crosses the Dallas North Tollway at about its midpoint and somewhat parallels the Pres Geo Bush Turnpike some miles to its north. It runs through Collin, Denton and Dallas counties.

SH121 is being built as a 12 lane highway with 2×3 toll lanes in the center as expressway and a pair of 3-lane one-way frontage roadways on either side which hit cross streets at signals. Slip lanes will connect the toll expressway roadways with the frontage roadways for access and egress from the tolled lanes in a common Texas configuration.

Tolling will be all-electronic at highway speed – no cash collection.

The vast passions and political energy invested in controlling SH121 should give it a place in tollroad history.