Sunday, December 26, 2004

No high speed rail in the near future for Trans-Texas Corridor

Corridor project scales back rail hopes

Red River-San Antonio toll road may add trains after 2025

December 26, 2004

The Dallas Morning News
Copyright 2004

At first glance, the $6 billion Trans-Texas Corridor proposal unveiled this month appears to be little more than a Texas-size toll road.

Aside from a small rail relocation project around Austin, the plan for a privately operated toll road from the Red River to San Antonio made virtually no mention of potential rail and utility lines that have been prominent in discussions about the corridor.

Plans for high-speed or intercity rail, which set off furious opposition from Texas landowners and some business heavyweights a decade ago, will not be part of the winning bidder's plans anytime soon.

"We don't see at this time any high-speed trains happening," said José M. López, director of U.S. and Latin American operations for Cintra, the Spanish company hired to build the first leg of the corridor plan by 2013.

Rail lines may be part of a long-term master plan, which mentions rail projects after 2025. "Highways are much easier to plan and can come to fruition faster than railroads," Mr. López said.

Still, Gov. Rick Perry's ambitious Trans-Texas Corridor plan features echoes of the high-speed rail battle from the 1990s.

In both cases, a foreign consortium promised to build a major public works project with no public financing. The high-speed rail proposal faced fierce opposition from rural landowners, who are now worried about the corridor plans. Concerns about property rights led the state Republican Party and the Texas Farm Bureau to oppose the corridor.

"Taking private land for lease to a company that will use our land to generate a profit by charging us tolls and rent is offensive. It should be illegal," said David Stall, founder of Corridor Watch, based in Fayetteville, east of Austin.

One previous opponent to high-speed rail has no plans to enter the corridor discussions.

"We don't have a role in the current policy talks," said Linda Rutherford, a spokeswoman for Dallas-based Southwest Airlines, which opposed the rail plans in the 1990s. "It was not an issue of competing with high-speed rail as a mode of transportation, it was competing with it on the amount of subsidy it would have received."

This time around, some of the same players may eventually end up on different sides of the debate. Texas Transportation Commission Chairman Ric Williamson said he "fully expects" Southwest Airlines to eventually work with the state on building a rail network.

"Rick Perry is focused on commuter rail that the market will support," Mr. Williamson said. "I expect it [Southwest Airlines' participation] because I understand the economics of the oil and gas business. I don't think the price of fuel is going to go down. It's only going to go up."

Toll-rate debate

With no plans for high-speed rail and only marginal discussion of commuter rail, the debate over such a large public works project will focus on other issues this time, including the setting of toll rates and the use of private capital to build major roads.

Cintra's proposal calls for building several hundred miles of a four-lane toll road from North Texas to San Antonio, but other projects could follow, Mr. Williamson said last week.

The key to building connecting or related projects may lie in the state's plans for a proposed $1.2 billion payment from Cintra.

"It would be entirely logical and not surprising to take that $1.2 billion and leverage it into $3 billion or $4 billion to use for several purposes," Mr. Williamson said. "We will turn that $1.2 billion into a lot more and take care of a lot of problems up and down the corridor."

The state and Cintra have until mid-February to negotiate important details of the proposed $7.2 billion initial agreement or cancel the deal. The two sides then would have another year to iron out more specifics on what construction officials are calling the largest privately funded public works project in history.

Precise routes for the corridor are far from being chosen. The state could narrow down the possibilities to a single, 10-mile-wide swath by early spring. In North Texas, the study area includes the southeast corner of Dallas County and extends as far east as Wood County about 75 miles away. Area residents will be able to give their input on possible routes at public hearings in the spring. The toll road could open to San Antonio by 2014.

While no firm construction plans have been announced, Mr. Williamson said the state might be interested in extending the corridor to the Texas Valley, dredging the port of Corpus Christi to allow for bigger ships, and moving freight rail off a congested Austin-to-San Antonio line to make room for commuter trains.

Private-public model

Although relatively new to the United States, the private-public partnership model has been used successfully elsewhere. Cintra, which has been in business since 1968, recently went public on the Spanish stock exchange. It also has been around long enough to have a mixture of older and newer toll projects, including one road in the Basque area of Spain that it returned to the Spanish government after a 35-year lease.

"This is a business that is well-developed and mature in parts of the world," Mr. López said. "In the United States, for a number of reasons, it is not."

Still, officials in other parts of the world have raised questions about Cintra's practices. Toronto-area officials waged an unsuccessful legal battle to prevent Cintra from raising tolls on Highway 407. And in the Chicago area, the company has drawn attention for its plans to raise tolls on the Chicago Skyway, which it is in the process of acquiring.

In both cases, Mr. López said, the company negotiated a deal with local governments that included toll limits. The company would not have bid the same amount if it did not have the right to set tolls under established parameters.

"We expect to set tolls based on market demand," Mr. López said. "If not, we won't have cars. And if we don't have customers, we won't have cash."

With toll roads not generating much revenue for investors for at least eight to 10 years, Cintra will be in the toll road business for the long haul, Mr. López added. Cintra probably will have the rights to the corridor and its tolls for 50 years.

"This is a very specialized business," he said. "People who try to see this business as a quick way to make money will fail."

The state probably will retain the right to set tolls, and it may even attempt to enter into a toll revenue-sharing agreement with Cintra, Mr. Williamson said. The company's current Texas business proposal, if left unchanged, would keep tolls between 10 and 20 cents per mile.

So will Texans pay $30 or more to travel up to 85 mph on an unclogged traffic artery between North Texas and San Antonio?

"We believe it will work, as it has in many places worldwide," Mr. López said.


© 2004 The Dallas Morning News Co