TURF reaction to TxDOT awarding TTC-69 to ACS of Spain & Zachry

IMMEDIATE RELEASE

TURF statement on TxDOT selecting private partner to develop TTC-69

Austin, TX, June 26, 2008

After the overwhelming public feedback preferred the “no build” option and after the Legislature made it clear it wanted time to slow down this train of privatizing our public infrastructure, TxDOT’s selection, today, of a private partner to develop TTC-69 is a total slap in the face to the people of Texas.

This proposal awarded to ZAI/ACS (Zachry American Infrastructure and ACS, based in Spain) is chalk full of egregious taxpayer exploitation. For instance, it tolls loops around Riviera, Driscoll, Corpus Christi and other cities (7 loops total) to fund non-toll improvements to Hwy 77 in yet another Robin Hood scheme. The deal gives ZAI/ACS a guaranteed 12% rate of return on their investment, and it relies heavily on public funds, like federal taxpayer backed private activity bonds (PABs) and TIFIA loans to front the vast majority of the construction costs and then gives all the profit to Zachry & ACS!

They also plan to use taxable zero coupon fixed rate bonds issued by the Cameron County Regional Mobility Authority and controversial Transportation Reinvestment Zone (TMZ) funds, which will essentially heist property taxes. The deal also gives ZAI/ACS cherry-picking rights (or right of first refusal) on multiple segments for the TTC-69 without being subjected to a competitive bidding process. The sham of an announcement pandering to landowners promising to use existing highways for TTC-69 wasn’t a concession at all. The private “partners” informed them the new corridor route wasn’t toll viable so they reverted back to using existing freeways (which would have been the tollway’s biggest revenue “competitor”) so as to capture more toll revenue. It was Cintra and Zachry who determined the re-route, not TxDOT being responsive to an outraged public!

“If this isn’t a wake-up call to the Legislature that it’s business as usual at TxDOT until they forcibly restrain them via state law, we don’t know what is. This removes any requirement for competitive bidding, which on its face is an absolute failure of the State’s fiduciary duty to protect the taxpayers from monopolistic sweetheart deals and what’s certain to be inflated costs. We must make Legislators pay at the ballot box for their malfeasance in granting the authority for such no-bid contracts and for failing to rein-in TxDOT with a GENUINE moratorium last year BEFORE this next private sweetheart deal got signed. If they don’t completely clean house at TxDOT and end this public fleecing, there won’t be enough political cover for the consequences at the ballot box. Enough is enough. End this now!” notes Terri Hall, TURF Founder.

“At today’s Transportation Commission meeting, it was a lovefest between David Zachry and the South Texas politicos pushing this nonsense. TxDOT and their buddies at Zachry/ACS found a way to follow the bare minimum of the law to sign this CDA and continue to steamroll a plan the majority of Texans don’t want. It was also evident the Transportation Commission is desperate to come up with their own alternative reforms since they’re facing an angry public demanding TxDOT be scrapped, a discontented Legislature, and scathing Sunset Commission recommendations,” observed Hank Gilbert, TURF Board member and acting President of the Piney Woods Subregional Planning Commission who attended and testified at today’s meeting.

For more detailed analysis of how TxDOT can legally award a Comprehensive Development Agreement (CDA) outside the moratorium (SB 792), go to TURF’s web site here.

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Link to article here. Commission picks developer for I-69 project
Plan would build toll road loops around Corpus Christi, other cities
By JANET ELLIOTT
Houston Chronicle, Austin Bureau
June 26, 2008
AUSTIN — The Texas Transportation Commission on Thursday selected San Antonio’s Zachry Construction Corp. and a Spanish toll road developer to plan a superhighway from Texarkana to Brownsville.

The $5 million contract calls for Zachry American Infrastructure and ACS Infrastructure to create a financial plan for the Interstate 69 segment of the Trans-Texas Corridor.

“This team represents the best in the balance of local and global expertise necessary to complete a project of this scope,” said David Zachry, chief operating officer of Zachry Construction Corp.

The private developers’ plan calls for seven new loops around Corpus Christi and other cities to be constructed as toll roads. Revenue would pay for bringing existing stretches of U.S. 77 up to interstate standards. U.S. 77, however, would not be tolled.

They also propose 60 potential infrastructure projects, including commuter rail along U.S. 90 northeast of Houston, a bridge to Bolivar Peninsula, a container facility at Freeport and a desalinization plant in Brownsville. Transportation commissioners said, however, that there was no guarantee any of those projects will be built.

Houston route unknown

The final decision on the route for the corridor will be made by the Texas Department of Transportation through an ongoing environmental study. It is expected to roughly follow U.S. 59 through East Texas and south of Houston, and U.S. 77 south of Victoria.Earlier this month, TxDOT said it had abandoned plans to build part of the I-69 corridor through rural areas north and west of Houston. Instead, it said it would stick to major highways for most of the route.

The way through or around Houston has not been determined, although it could stay on U.S. 59 or go on Loop 610 or the planned Grand Parkway.

The developers’ financing ideas boosted their proposal over one submitted by a joint venture led by another Spanish company, Cintra, which is developing a master plan for the segment of the Trans-Texas Corridor slated to run from Oklahoma to Mexico, east of Interstate 35.

Zachry is a Cintra partner on the project paralleling I-35.

“We feel (this proposal) is the best value to the state,” said Mark Tomlinson, director of TxDOT’s turnpike division.

An anti-toll road group called the method of financing a “Robin Hood scheme.”

“TxDOT and their buddies at Zachry/ACS found a way to follow the bare minimum of the law to sign this (Comprehensive Development Agreement) and continue to steamroll a plan the majority of Texans don’t want,” said Hank Gilbert, a board member of Texans Uniting for Reform and Freedom.

Toll roads operate locally

South Texas political leaders applauded the decision to move toward a longstanding goal of having the Rio Grande Valley served by an interstate highway.”It’s like getting indoor plumbing. We’ve waited that long for it, and it’s really important,” said Bill Summers, president of the Rio Grande Valley Partnership, a chamber of commerce group.

The I-69/TTC corridor is part of Gov. Rick Perry’s vision for a network of broad corridors linking major cities, with toll roads for cars and trucks, rail tracks for freight and passenger trains, and space for pipelines and power lines.

The corridor plans have been met with controversy due to opposition to tolls and concern that family farmland would be lost to development.

Corridor supporters say the routes would make the highways safer and improve the flow of goods by directing commercial traffic to designated lanes. Revenue from the state’s gasoline tax is insufficient to fund improvements, they say.

The developers plan to work with local authorities to operate $1.5 billion worth of toll roads. TxDOT spokesman Chris Lippincott said that arrangement would meet the requirements of a law passed last year that forbids private companies to operate toll roads.

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