Friday, January 28, 2005

"People feel threatened, and they want the government to do something about it."

Tollway funding is question of control


January 25, 2005

By Gordon Dickson Staff Writer
Fort Worth Star-Telegram
Copyright 2005

Some in Ontario say Cintra, which controls the 407 Express Toll Route north of Toronto, aggressively collects tolls and provides poor customer service.

A company selected to build a toll road from Dallas-Fort Worth to San Antonio has a reputation for aggressively collecting money from motorists, treating customers poorly and frequently raising tolls without public input.

Those are among the complaints lodged against Cintra -- selected in December to build the first leg of the Trans-Texas Corridor -- by motorists on the company's toll roads in Toronto and Chicago.

Across North America, private companies such as Cintra are spending billions of dollars to build roads in exchange for the right to collect tolls for 50 to 100 years -- relieving taxpayers of the financial burden.

But critics warn that some agencies may be giving up too much authority, blinded by the instant gratification of traffic relief.

"In some cases, because people were hungry to see something done to get a road built, they gave away the farm," said Alan Pisarski, a researcher and author of Commuting in America.

Some toll-road companies can raise tolls without a government hearing, or send collection agencies after drivers with past-due accounts.

Some even negotiate noncompete clauses into contracts so that governments cannot expand other freeways that might take business away from toll roads.

Just how much power Cintra will have is being negotiated behind closed doors in Austin. State officials say that within weeks they expect to sign a contract, known as a comprehensive development agreement, identifying Madrid, Spain-based Cintra as the lead agency, along with San Antonio's Zachry Construction Corp. and other minority partners.

Cintra has offered to build the 316-mile road for $6 billion -- all privately funded -- and pledged $1.2 billion more for the Texas Department of Transportation to use on state highways along the corridor. In exchange, Cintra gets to keep all tolls for 50 years.

With that much money at stake, a Cintra spokesman said, it's important for private toll-road operators to be able to set the agenda on their roads -- even if it means having unlimited authority to raise rates and go after deadbeats.

"The complaints about us represent one-3,000th of 1 percent of our total trips," said Dale Albers, a spokesman for Cintra's Toronto toll road. "We're not infallible, but it's nowhere near the complaints people have about car insurance."

In Canada, about 700 people have complained about aggressive collection tactics and rude or cold customer service at 407 Express Toll Route, Cintra's 67-mile toll road north of Toronto, said Mike Colle, a state parliament member. Colle has started an investigation into the complaints.

The road was built by Ontario's provincial government. In 1999, a group of private companies led by Cintra leased it for 99 years in exchange for a payment equivalent to $2.5 billion U.S.

Relatives of the late Mike Michenko thought it was a bureaucratic mistake when they received a bill months after his death showing he owed money for using the road.

According to the bill, which charged the equivalent of $11, someone had driven Michenko's vehicle on the road days after his death. The family disputed the charges, saying Michenko's car had not been out during that time, but Cintra insisted that his license number was recorded by a camera.

"His death wasn't enough for them," said Michenko's son, Brian. His father's account ballooned to $91 including late fees. "Now they want the money from my mother."

In recent years, about 300 full-time employees have been hired primarily to deal with complaints, Albers said.

"We take customer service seriously," he said. "We like to think we can respond quicker than government can."

But the Ontario parliament receives similar complaints by the dozen, Colle said.

"They're harassing people who are dead, people who have never driven on the highway or people who have been double-billed," Colle said. "If anything, they've gotten worse. Tolls have gone up 200 percent. People feel threatened, and they want the government to do something about it."

Ontario has filed several lawsuits attempting to gain some decision-making powers, including the right to veto toll increases, but courts generally have sided with Cintra, citing a 1999 contract signed by both parties.

In fact, Cintra is pushing for additional authority. The company has asked Ontario not to renew vehicle registrations for motorists who are behind on their toll payments, a request the government has declined.

In Chicago, Cintra took over the Chicago Skyway, a 7-mile bridge, late last year. The city, which built the bridge in the 1950s, was paid $1.8 billion for 99 years.

Before the documents were signed, Cintra and its partners, doing business as Skyway Concession, announced that the $2 toll would increase to $2.50 for cars and up to $11.80 for trucks.

"Everybody agrees the tollway needs money for repairs ... but to increase it by that much is shocking," said Bob Stranczek, president of Chicago-area Cresco Lines, which specializes in hauling steel. "Most of us operate under 1 to 3 percent profit margins. We don't have the money to pay these fees."

Other firms have also drawn the ire of motorists.

In California, a private company was placed in charge of SR 91 Express Lanes -- high-speed toll lanes running down a highway median from Anaheim to Riverside -- in the mid-1990s.

Later, the state wanted to expand the adjacent freeway, but the owner of the express lanes, California Private Transportation Co., objected on the grounds that faster freeway lanes would hurt toll-lane revenues. The company cited a noncompete clause in its contract.

So in 2003, the Orange County Transportation Authority paid $207 million to buy the express lanes from the company.

In Texas, privately funded roads are not new. The Plano-based North Texas Tollway Authority, a quasi-government agency, owns and operates several area toll roads, including the President George Bush Turnpike. The tollway authority can turn over delinquent accounts to either a collection agency or the Texas Department of Public Safety but usually doesn't take action until someone has ignored multiple requests for payment.

Texas officials said they can write language into their contract with Cintra that limits the company's power, although they declined to discuss specifics until the first document is finalized in coming weeks.

One concern is that the state will protect the toll roads, ensuring that private companies make a profit, while ignoring the needs of the rest of the state highway system.

"That's not the case," said Phillip Russell, director of the Texas Turnpike Authority Division, an arm of the Texas Department of Transportation. "It's still going to be a part of the state highway system."

Gov. Rick Perry has said he believes Texas will embrace privately funded toll roads and eventually consider them a bargain.

"I'm confident that the Texas Department of Transportation and the commissioners that are there have the professionalism, have the intellect and the ability to make sure that Texas has the best transportation system in the world, and at the most reasonable price," Perry said in a recent interview.

But from his parliamentary office in Toronto, Colle said: "My advice is to make sure motorists in Texas are protected against extraordinary tolling, and at least have input. I hope you don't follow our lead."


Trans-Texas Corridor

• The Texas Transportation Commission is expected to form a Trans-Texas Corridor advisory committee Thursday to oversee and provide input into the state's decisions regarding toll roads and high-speed rail lines.

• For more information, call toll-free (877) 872-6789.

• In December, a consortium headed by Cintra Concesiones de Infraestructuras de Transporte was selected to build the first portion of the corridor. The toll road will begin roughly in Denison, stretch around the east side of Dallas and run roughly parallel to I-35 near Waco, Austin and San Antonio.

• Madrid, Spain-based Cintra has an 85 percent stake in the toll road, and San Antonio-based Zachry Construction Corp. has a 15 percent stake. Sixteen other companies will help with matters including design work and legal advice.

The Fort Worth Star-Telegram: