"I am skeptical that the deal makes financial sense."
Harris County commissioners will weigh leasing system to operator
By BILL MURPHY
In 1999, the Spanish toll company Cintra paid $3 .1 billion Canadian for the right to operate a 42-mile toll road in Toronto.
In January, the Cintra-Macquarie Consortium ponied up $1.83 billion to lease operating rights to the eight-mile Chicago Skyway for 99 years.
Astute financiers worldwide have begun viewing busy toll roads that draw hundreds of thousands of drivers daily as long-term investment opportunities, and the Harris County Toll Road Authority is among the systems attracting interest.
Investment banks and private toll -road operators have put out feelers to the county, saying it might be able to lease the 83-mile system for $2 billion to $7 billion.
Such numbers got the attention of county officials. Harris County Judge Robert Eckels is among those who say road bond referendums could become a thing of the past if such a windfall were received and the interest was used to pay for street construction, repairs and other transportation needs, such as commuter rail lines.
But a local watchdog group remains skeptical. Its members wonder whether the toll -road system, which they say has been prone to secrecy for decades, would be less transparent than ever under a private operator.
"Many, many members of our organization are concerned the accountability will be less if the toll roads are run by a private company," said Robin Holzer, chair of the Citizens Transportation Coalition.
Commissioners Court is expected today to give the go-ahead to a comprehensive study that will determine whether it is in the public's and the county's interest to fully or partially privatize the toll road. The plan calls for the county to ask selected investment banks to submit proposals about the toll road's future.
The court also will consider whether it should create a working group that will help review proposals about the toll road's future.
The study will consider which of the following options is best for the toll road users, the county and its long-term financial stability.
The county could:
Keep the toll -road authority as is.
Sell parts or all of the system to a private firm or to a partnership between a private firm, the county and a newly created regional mobility organization. Such a sale might net $2.7 billion to $4.4 billion, concluded First Southwest Co., the county's financial adviser.
Or it could lease the right to operate the system for 50 to 75 years to a private firm or to a partnership between a private firm, county and the regional group. Such a deal could net the county $2 billion to $7 billion, according to investment banks.
Under a public-private partnership, the county could hold no more than a 49 percent interest. A private firm and a regional mobility organization would control the remaining 51 percent.
The organization, Eckels said, would include members appointed by Harris County, surrounding counties and Gov. Rick Perry.
Commissioner Sylvia Garcia said, "The study will explore our options and look at what the future of the toll -road authority ought to be. We would be remiss in our responsibility not to look at this."
The county considered leasing toll -road operator rights in 1999, but the idea died. But Eckels and other influential county figures, such as Dick Raycraft, who oversees the county's budget and long-term financial planning, now want the court to seriously examine privatization.
Some court members already know where they stand. In the past weeks, Commissioner Steve Radack has said he will not oppose the privatization study. But he said he will oppose privatizing the toll road in any way.
Holzer said private firms want to operate the toll road because they know that they can make money on top of whatever was required to be paid to the county. She wondered why the county just doesn't make the money itself rather than give a private firm a cut of its take.
"I am skeptical that the deal makes financial sense. Some people will be tempted by the thought, `Hey, we can have money now instead of later,' " she said.
© 2005 Houston Chronicle: