Harris County toll roads: "Not for sale. Not for lease."
June 20, 2006
By BILL MURPHY
Rejecting the temptation of a multibillion windfall, Harris County Commissioners Court voted unanimously today to continue running the county's lucrative toll road system rather than selling or leasing it to a private entity.
"Now we can erect a sign on the toll roads: 'Not for sale, not for lease,'" said Commissioner Steve Radack, who had never been enthusiastic about the idea, even as the county conducted studies of the leasing and selling options.
The action means the system, which comprises the Hardy, Sam Houston and Westpark toll roads, will continue to be operated by the Harris County Toll Road Authority.
The county could have gotten as much as $20 billion if it sold the system and ceded all control over tolls, reported JP Morgan and Popular Securities, which studied that option for the county.
Goldman Sachs and Loop Capital, which studied the leasing prospects, concluded that a lease, depending on its length, could bring in $7.5 billion to $13 billion.
The third consulting group, Citigroup and Siebert Brandford Shank & Co., recommended that the county keep the system but study ways to better leverage its finances for other future expansion.
The toll road system had $373 million in revenues in fiscal year 2006.
The county's Office of Management Services and its financial consultant, First Southwest, oversaw the studies.
Private firms and investment banks have taken over a number of toll roads worldwide. The Spanish toll company Cintra paid $3.1 billion Canadian in 1999 to operate a 42-mile Toronto toll road. The Cintra-Macquarie Consortium last year paid $1.83 billion to lease operating rights to the eight-mile Chicago Skyway for 99 years.
A consortium led by Cintra is negotiating to develop a segment of the Trans-Texas Corridor, a proposed statewide system of toll roads, pipelines and railroads.
© 2006 Houston Chronicle: