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State audit critical of Trans-Texas Corridor proposal
By David Tanner
Landline Magazine February 28, 2007
Texas Gov. Rick Perry continually states that the Trans-Texas Corridor will be a cost-effective project for Texans with the private sector paying the bulk of the bills. But last week, the Texas State Auditor’s Office pulled no punches in shooting down that claim and others made by the Texas Department of Transportation.
In an audit released Friday, Feb. 23, State Auditor John Keel said the taxpayer burden could be nearly $14 billion.
Keel and his team want Perry, lawmakers and TXDOT to be accountable for every dime and be honest about how much of the bill taxpayers could be footing.
The leg of the multi-modal toll system of commuter lanes, truck-only toll lanes, railways and utility lines known as the TTC-35 only makes up 14 percent of the proposed 4,000-mile network, yet it takes up 57 percent of the early cost estimates.
During promotional efforts for the corridor, TXDOT officials have claimed the network would cost about $184 billion. The state auditor pointed out that the proposed 600-mile TTC-35 alone – which makes up less than one-seventh of the entire TTC project – would cost $105 billion.
The proposed TTC-35 would run from the Mexican border at Laredo, TX, north and east to the Oklahoma border, parallel to and possibly including parts of Interstate 35.
Auditors said the project runs the risk of costing billions in taxpayer dollars for the proposed railway lines – up to $14 billion – and other development costs for the corridor.
“There is a lack of reliable information regarding projected toll road construction costs, operating expenses, revenue, and developer income,” auditors stated, adding that it’s “not possible to accurately estimate profits due to many unforeseen variables.”
The audit called for more public information, oversight mechanisms and demanded third-party estimates for toll revenue and operator profits.
State transportation officials were mostly agreeable to the findings, but did refute a finding about taxpayer dollars potentially being used to subsidize a 12 percent anticipated profit margin for the builder and operator, Cintra-Zachry.
“TXDOT will never be required to make payments so that Cintra-Zachry gets a 12-percent return,” transportation officials wrote in their response, adding that TXDOT is not responsible for compensating the developer if profit expectations are not met.
The 73-page document is available for review in its entirety, including the TXDOT response, on the State Auditor’s Office Web site.Visit http://www.sao.state.tx.us/Reports/report.cfm/report/07-015 to read the auditor’s summary of the findings and for a link to the actual audit report.