Three business groups submitted proposals for TTC I-35 route.
Corporate groups want in on $180 billion effort to revise Texas network
September 29, 2003
TONY HARTZEL Transportation Writer
The Dallas Morning News
A plan to reshape Texas' transportation network is attracting big corporations and big dollar signs on the path toward reality.
As drawn, the $180 billion Trans Texas Corridor would encompass up to 4,000 miles of new tollways, truck lanes and rail lines statewide. And according to proposals submitted last week to the state, the project's first leg could run right beside Dallas-Fort Worth - creating a highway and rail route that would parallel Interstate 35 from the Red River to the Rio Grande.
Three business groups submitted proposals for the I-35 route, covering mostly the concept for building the project. The state will review the proposals and select finalists, who will be asked for more specifics on financing, construction schedules and general routes early next year.
"This is truly unique in the history of this country," said Texas Transportation Commission member Ric Williamson of Weatherford, Gov. Rick Perry's point man for the corridor plan. "This is true entrepreneurship."
Corporations that would finance the corridors are drawn to the multibillion-dollar possibility because of the revenue that tolls could produce. In theory, they believe, companies and even some inter-city travelers will pay a premium to avoid crowded urban areas served by highways such as I-35. Rail lines also could attract revenue from shippers, and the new corridors would feature room for gas, water and other utility lines that companies could lease, creating other revenue.
Details remain sketchy about how the proposals would convert a 1,200-foot-wide swath of Texas prairie into six lanes of toll roads, four truck lanes and up to six rail lines for freight and passenger service. Materials presented to the Texas Department of Transportation this week cover only the concept for the I-35 route.
I-35 the preferred route
Proposals could have been submitted for any of six high-priority routes through Texas. The companies gravitated toward I-35 because of its heavy North American Free Trade Agreement truck traffic and extensive passenger vehicle traffic.
"None of us really knows what this grandiose thing is going to do," said Tom Johnson, executive vice president of the Associated General Contractors of Texas. "This beautiful girl out there, she may be gorgeous, or she may have a mask on. We don't really know yet."
When a corridor is complete, the state will own the right of way and lease it to the companies.
Initially, opponents of the corridor concept worried that it might divert much of the state's highway money from the existing highway network. Associated General Contractors, a powerful lobbying group in Austin, has weighed in against the corridor plan in the past. Now, it has taken a more neutral stance because of bills approved in the Legislature this year.
The new laws cap the state's corridor contribution at 20 percent of the state's share of federal gas tax revenue, which equals $400 million a year. The addition of other revenue could lead to $800 million a year spent on the corridor plan, Mr. Johnson estimated. In comparison, the state has issued about $3.6 billion a year in highway contracts.
Spending money on the corridor is less of an issue because Texas has added several monetary sources for highway construction this year. Those include the Texas Mobility Fund, which will get money from fees paid by bad drivers to keep their licenses. Voters also approved $3 billion in bonds this month. The new funds will allow for spending on the corridor while keeping existing highway spending at constant levels, Mr. Johnson said.
"An agency can say, 'We want a corridor from the Red River to the Rio Grande,' and that's good," he said. "But we shouldn't sacrifice the entire system because they have stars in their eyes."
Supporters say that the corridor plan places most of the risk on the private sector, which would seek bonds based on toll revenues to finance most of the project. The state expects to contribute some funds, but the competition encourages the consortia to limit the amount of government involvement, Mr. Williamson said.
That differs from Texas' flirtation with high-speed rail a decade ago, when questions about the state backing the rail authority's bonds led to its defeat.
"The state doesn't really care what the private sector is going to risk," Mr. Williamson said. "This is different from high-speed rail in one significant way: The state of Texas is not on the hook for private sector debt."
If private corporations ultimately are responsible for the debt, they will pay higher interest rates than if the state backed the bonds. Therefore, the companies must strike a delicate balance between using state funds, charging tolls and using excess toll revenue to extend the corridor to rural areas.
The teams, made up of construction companies, architectural firms, engineering consultants and financing and legal experts, must decide which portions of a corridor to build first, be it rail, toll roads or utility lines.
They also will have to pick geographic areas of Texas that will create enough revenue to finance more construction.
"It's not an easy solution. It's a fairly complex solution because this is the initial project of this magnitude," said John LaRue, managing director of Trans Texas Express, a consortium of 10 companies created to bid on the corridor plans. "It's multiple mobility issues over time. Nothing out there compares with this."
One of the guiding principles for funding is to shift truck traffic away from urban areas and the highways used by commuters. In the downtown Dallas area, tractor-trailers made up 3 percent to 4 percent of morning and evening traffic on I-35E, according to a 1999 study. The numbers increased during nonpeak times, but congestion from commuters continues to increase outside traditional rush hours.
Outside big cities, truck traffic poses an even greater challenge. On rural interstate segments, tractor-trailers can make up 30 percent of the traffic, according to the state Transportation Department. In addition, state figures show that 16 percent of all truck traffic is related to NAFTA, and that 79 percent of all U.S.-Mexico truck traffic comes through Texas.
The country's economy and increasing reliance on just-in-time delivery of goods make the corridor proposal appealing, said Thomas Graham, spokesman for Fluor Enterprises, which submitted a proposal this week.
"Businesses tend to take the path of least resistance," he said. "If it's a better economic value, businesses will pay for that."
Other states might offer lessons on private road construction. In California, a company negotiated a clause with the state that prohibited further expansion of an adjacent state road until the toll lanes attracted set amounts of traffic. That led to motorist resentment and an eventual state buyout of the traffic clause so that nontoll lane widening could begin.
Companies might include similar requests for Texas to not widen competing interstates, Mr. Williamson said, but those offers must be considered against competitors' plans that may not include the same requirement.
'What's best' for Texas?
"We have to make a judgment as to what's the best thing for the state of Texas," said Mr. Williamson, who emphasized that Texas also would continue with its plans to widen I-35 to six lanes from Dallas to San Antonio. "That is no comparison to six lanes for vehicles, four truck lanes and commuter rail."
The state and companies expect the first segments to be under construction in years, not decades.
"The Trans Texas Corridor will leapfrog Texas into the forefront of transportation and infrastructure," Mr. Graham said. "I have no doubt it can be accomplished."
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