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:


"State officials -- as well as the news media -- need to do a far better job of educating the public" about the Corridor

Rollin', rollin', rollin' ...

JACK Z. SMITH, Staff Writer
Fort Worth Star-Telegram
Copyright 2005

There's been recent talk about some potentially very pricey driving on the Trans -Texas Corridor .

That includes media speculation that an approximately 400-mile round trip from the Fort Worth-Dallas area to Austin might cost you $80 in tolls.

If you're not familiar with the corridor , or TTC for short, it's the proposed $175 billion, 4,000-mile network of high-speed toll roads that might one day serve as the state's solution for a mushrooming population and increasingly choked freeways.

In December, the Texas Transportation Commission selected a Spanish firm, Madrid-based Cintra, to build and operate a 316-mile leg of the TTC that would bypass Interstate 35. The new route, dubbed TTC-35, would run from north of the Metroplex to San Antonio.

Cintra would pay for the $6 billion road in exchange for the right to collect tolls from it for 50 years.

The next step is for Cintra and the state to reach agreement on a master development plan outlining when it would build various sections of the road and many other particulars.

In a Dec. 17 news story, the Star-Telegram cited comments by Cintra officials who said tolls on TTC-35 probably would be similar to current rates on such roads as Dallas' President George Bush Turnpike.

The article made this observation: "At 20 cents per mile, a trip from Fort Worth to Austin would cost about $40 each way, but the toll would be higher for trucks and other vehicles with more than two axles."

That could mean an $80 round-trip toll for passenger vehicles and potentially much higher rates for big freight trucks.

By comparison, you could travel 296 miles round-trip on the New Jersey Turnpike for $12.90.

The new TTC-35 presumably would be much less congested than I-35 and might permit a speed limit of 85 mph, offering a quicker trip with less stress.

But would that be worth paying $80? Certainly not for me or most other Texans.

Texas Transportation Commissioner Ric Williamson told me Wednesday that he's confident the tolls would be much lower than the $80 level.

"I don't see that it would be that high, because no one would pay it," he said.

"If I were guessing, it might be in the range of $15 one-way and $25 round trip," he said.

A $25 toll is still more than I would be willing to pay, particularly since there initially might not be a TTC-35 segment on the west side of the Metroplex.

Williamson speculated that Cintra, when previously suggesting per-mile tolls similar to those on the Bush turnpike, probably was thinking of motorists who would drive only short stretches of the corridor before getting off.

He speculated that truckers might be levied tolls two to three times higher than passenger vehicles. I wouldn't be surprised if some truckers found such tolls too steep.

Williamson foresees TTC-35 as an innovative experiment in which big companies such as Wal-Mart might negotiate with Cintra so that the giant retailer's truck fleet could use the corridor at a discounted flat rate.

Under a concept of "congestion pricing," individual motorists also might enjoy sharply reduced rates if they drove the corridor during "off-peak" hours when traffic was minimal. For example, someone who drove TTC-35 from the Metroplex to Austin late at night might pay only a $5 toll, Williamson speculated.

But would you want your college-age offspring driving an 85 mph road at 11 p.m.? And why not just take I-35, which also would be less congested late at night?

Williamson said Cintra would have to levy market-driven tolls that are sufficiently moderate to attract substantial traffic to TTC-35, because motorists still would have the alternative of taking I-35.

As now envisioned, the entire Trans -Texas Corridor would be built over several decades, although portions paralleling I-35 (notably from Austin to San Antonio) might be completed within several years.

Portions of the corridor eventually might be 1,200 feet wide and include segments for passenger vehicles, freight trucks, high-speed passenger rail and transmission of water, oil, natural gas, electricity and telecommunications cables.

I still have more questions than answers about the corridor . It could prove to be the biggest transportation success story in Texas history and serve as a revolutionary role model for other states -- or it could become a colossal boondoggle that takes away huge swaths of land without sufficient offsetting benefits.

I know one thing for sure, though.

State officials -- as well as the news media -- need to do a far better job of educating the public as to what the corridor is all about and the basic philosophy behind its creation.

Jack Z. Smith is a Star-Telegram editorial writer. (817) 390-7724

Copyright 2005 Star-Telegram, Inc.

The Fort Worth Star-Telegram:


TxDOT to create "Citizens Advisory Committee" to buffer Corridor criticism

Toll-road critics are invited to serve on advisory committee

Fort Worth Star-Telegram
Copyright 2005

HOUSTON--A state-sanctioned watchdog group will keep an eye on the construction of toll roads across Texas , and state leaders promise that those who are most critical of the idea will have a voice.

The Texas Transportation Commission voted unanimously Thursday to create an advisory committee for the Trans -Texas Corridor . The committee's first duty will be to oversee the design and construction of a toll road running roughly parallel to Interstate 35 from North Texas to San Antonio.

Commission members said they are inviting toll road opponents to join the advisory committee, which will answer directly to Mike Behrens, director of the Texas Department of Transportation.

The number of committee members and frequency of meetings will be decided by March. Members could be appointed as early as April, said Richard Monroe, the commission's legal counsel.

Critics are encouraged to submit ideas for how the committee should work, commission Chairman Ric Williamson of Weatherford said.

"We will be taking suggestions from government officials ... and anyone else who wants to take part," he said.

The Trans -Texas Corridor is the state's plan to build up to 4,000 miles of high-speed toll roads, rail lines and utility lines during the next half-century.

The first leg would bypass I-35, starting in Denison, running around east Dallas and continuing roughly parallel to I-35 near Waco, Austin and San Antonio. Madrid, Spain-based Cintra and San Antonio-based Zachry Construction have been selected to build and manage the $6 billion project.

Many critics worry that the toll road would hurt cities along I-35 that have built their economies around highway traffic, especially the constant flow of commercial trucks. Others want to make sure that farms are not divided and that toll road operators treat drivers fairly.

Serving on the advisory panel is critics' best chance to influence the toll road's route, Williamson said.

Transportation Department bylaws allow up to 24 members on a committee, but the corridor committee may be smaller, said Phillip Russell, director of the Texas Turnpike Authority Division. Committee members may include technical experts and representatives of city and county governments, neighborhoods, businesses, property owners and environmental groups.

The panel should have a balance of voices, including consumers and industry representatives, Russell said.

Where the committee will meet and how often are undecided.

The committee will attempt to reach local consensus on toll roads and high-speed rail projects, Russell said.


Be involved

* Residents interested in volunteering for the Trans -Texas Corridor advisory committee, or just keeping tabs on the project, may call the Texas Department of Transportation's main number in Austin, (512) 463-8585, or e-mail corridor

* Residents who want to comment on the advisory committee's governing rules should submit written comments to: Texas Turnpike Authority Division, 125 E. 11th St., Austin, TX 78701-2483. The deadline is March 14.

Gordon Dickson, (817) 685-3816

Copyright 2005 Star-Telegram, Inc.

Fort Worth Star-Telegram:


Thursday, January 27, 2005

Mexican cement needed to pave Texas

To prevent shortage, tariff on Mexican cement must end

January 27, 2005
David Hendricks
San Antonio Express-News Copyright 2005

Quarry companies are like the railroads these days. They both own a great deal of land. Both are critical to commerce and our quality of life. But no one likes to live near them.

As Texas grows, so will a dilemma involving the need for more limestone and other materials used to make cement, which in turn is needed for highways and building construction.

The clash between protecting property values and the need for more quarries is particularly acute in San Antonio and Central Texas because some of the best limestone in the world is along the Edwards escarpment.

So said Michael Stewart, president of the Austin-based Texas Aggregates and Concrete Association, in an address to the San Antonio Business & Economics Society at its monthly luncheon meeting Wednesday.

Quarry companies are finding themselves between a rock and a hard place, so to speak. As old quarries get mined out, the companies need to open new sites. Too many people, however, are living on or near limestone deposits between San Antonio-Seguin and Georgetown-Salado.

Quarries cannot be developed where there are houses, and Stewart said property owners - and their state representatives - are fighting proposed new quarries.

The big example now is in Burnet County, where state Sen. Troy Fraser, R-Horseshoe Bay, is siding with constituents who want to stop a quarry proposed by San Antonio-based Capitol Aggregates.

To Stewart, this is the wrong direction at a time when Burnet County is supplying the materials for the construction of Texas 130, which ultimately will provide a parallel route to crowded Interstate 35 between San Antonio and Austin-Georgetown.

When construction begins for the proposed Trans -Texas Corridor , a massive statewide highway system that will take generations to build, Texas will need to supply more limestone-based cement than ever.

Stewart predicted a cement shortage this summer due to heavy construction demand in Texas . The state usually imports about 15 percent of its cement needs, and in the past has relied on China. As China goes through its own construction boom now, it exports less cement.

Quarries further are being pinched by Union Pacific Railroad, which is cutting back by about half the number of cars being dedicated to limestone and cement-related products.

Union Pacific, which dominates the track routes used by the construction industry in this part of the state, is struggling to meet demand and has placed quarries low on its priority list for shipments, Stewart said.

That is turning quarry operators to rely increasingly on more expensive trucks to transport their products.

Ironically, there is a lower-costing source of foreign-made cement that could alleviate the coming shortage in Texas . Unfortunately, that cement is off-limits, thanks to a 15-year-old prohibitive tariff.

Mexico could be a competitive player in this market, but in 1990 the U.S. Commerce Department stuck a tariff, at times as high as 66 percent, on products from Monterrey, Mexico-based Cemex.

The Commerce Department took the action because of accusations that Cemex "dumped" its products in the United States to gain market share. Cemex no doubt sold its products at lower prices than U.S. producers did, but it is unlikely Cemex lost money by doing so.

Therefore, the anti-dumping charge has always been in doubt. Meanwhile, U.S. taxpayers have paid more than necessary for projects, especially highways, because the cost of cement has been artificially high.

In 1995, this column advocated ending the tariff because of changing market conditions, including the inability of U.S. producers to meet national cement demand even then.

Cemex has increased its U.S. production investments in the past decade and is even a member of the Texas Aggregates and Concrete Association now.

Because the association has members on both sides of the Mexico tariff issue, Stewart said, the association has no position. But he admitted that Cemex is unlikely to engage in dumping, no matter how it is defined, now that it has substantial U.S. operations.

Someone somewhere needs to bring political pressure to bear to end the U.S. tariff on Mexican cement. The case was political to begin with and always has been phony on its merits. To meet Texas ' growth projections, the cement market needs to be opened.