Friday, August 25, 2006

"Strayhorn has found an issue that unites rural farmers and ranchers with anti-toll activists and environmentalists."

Strayhorn releases transportation plan, blasts TTC


by Christine DeLoma

The Lone Star Report
Volume 11, Issue 4
Copyright 2006

How to fund Texas highways is rapidly becoming one of the most controversial questions in Texas politics.

Gov. Rick Perry’s private-public partnership to build the Trans Texas Corridor (TTC) would rely on a significant portion of toll revenue to pay for new roads. Independent gubernatorial candidate Carole Keeton Strayhorn pledged to break the state’s contract with Cintra/Zachry and use all available resources to build free roadways.

Are toll roads the future of Texas?

Strayhorn’s pledge might be hard to keep. Last year, Congress made it easier for states like Texas to build new toll roads by providing the flexibility to enter into public-private partnerships. Congress’s actions represented a fundamental shift in the way state and federal highways are typically financed.

States can now issue up to $15 billion in tax-exempt private activity bonds (PAB) to privately finance toll roads and railroad projects. PABs allow state and local governments to issue bonds that will be repaid by a private entity.

Anticipating Congress’ action, state lawmakers passed HB 2702 by Sen. Todd Staples (R-Palestine) in the 79th Regular Session, allowing the state to issue private activity bonds for highway facilities in accordance with federal law.

The federal government also expanded the use of transportation development credits (toll credits), allowing states that use federal money to build toll roads to accrue toll credits on a pro rata basis. Expanding the use of toll credits effectively frees up state matching dollars for other transportation programs.

States are now allowed to combine the design and construction of a toll road project into one contract. Most states currently use the traditional “Design-Bid-Build” method that requires separate contracts for each phase of a construction project, a procedure that state officials say is often costly and time consuming.

The bill removes federal restrictions on state procurement procedures for Design-Build contracts, allowing the work of property acquisition, design and construction to be undertaken simultaneously.

Texas is one of only 15 states experimenting with the Design-Build method in procuring highway contracts. Texas’ first public-private partnership, under a comprehensive development agreement (CDA) is the 90-mile State Highway 130 toll project.

Despite the toll road controversy, the Legislature paved the way for more tolls in Texas. Last year’s omnibus transportation bill, HB 2702 authored by Rep. Mike Krusee (R-Round Rock) and sponsored by Sen. Todd Staples (R-Palestine), makes it easier for the Texas Department of Transportation (TxDOT) and counties to acquire financing to build toll roads.

The Legislature raised from $800 million to $2 billion the ceiling on TxDOT expenditures for “toll equity” grants, which are funds from gasoline taxes used to pay for toll roads.

The legislation also allows particular counties to issue bonds to construct, maintain, and operate toll or non-toll roads or facilities. Counties that choose to take on a toll road project can leverage revenue bonds to potential toll revenue.

The bill codified the state’s authority to enter into CDAs with private companies to build and operate both tolled and non-tolled projects. The CDA can include the setting and collection of tolls and penalties. TxDOT must approve the methodology for the determination of toll rates. The length of the contract cannot exceed 50 years.

Freeways or tollways?

Strayhorn, in getting aboard the anti-toll road bandwagon, has found an issue that unites rural farmers and ranchers with anti-toll activists and environmentalists. She has railed against the Trans Texas Corridor, citing concerns about toll roads, property rights and contracting by foreign companies.

She has crisscrossed the state to attend more than a dozen public hearings held by the TxDOT on the proposed path of the 600 mile long portion of the Trans Texas Corridor (TTC-35) that will parallel I-35 from Mexico to North Dallas.

Over 10,000 concerned citizens have attended the TxDOT hearings throughout the state. In appealing to the hundreds of concerned property owners who may be affected by the proposed corridor, Strayhorn repeats her mantra that Perry’s plan is “the largest land grab in Texas history.”

“Texas property belongs to Texans, not foreign companies,” Strayhorn said. “To meet our transportation needs, we need freeways not tollways, and we must use existing rights of way and increase efficiency of existing roadways and ports. We must not destroy our precious farmland.”

Perry spokesman Robert Black said Strayhorn was sending mixed messages. Pointing to her January 2001 report, “Paving the Way,” Black said that the Comptroller recommended tolling existing roads, speeding up construction time with toll financing, and using taxpayer dollars to fund construction of toll roads. Strayhorn’s campaign says that she only listed tolls in the report as an option among many other methods of financing new construction.

As TxDOT wrapped up its public comment period on TTC Aug. 21, Strayhorn submitted her plan to address transportation problems - without tolls. “This agency is not listening to the people,” Strayhorn said. “At 56 hearings over 21 days, TxDOT ignored the overwhelming majority of people who testified against the Trans Texas Catastrophe. They even went so far as to tell Texans that they could not stop this boondoggle - even if they elected a new governor. Well, they’re dead wrong. I will blast this corridor off the bureaucratic books and replace it with a common-sense plan to address our transportation needs.”

Using the recommendations from TxDOT’s 1999 IH-35 Trade Corridor Study, Strayhorn has proposed adding lanes to IH-35 using existing rights-of-way and building double decking where possible. Other initiatives include:

* Improving and increasing capacity on Texas railways

* Encouraging telecommuting and staggered work schedules for state employees

* Appointing an independent inspector general at TxDOT to investigate waste and abuse and an ombudsman to listen to Texans’ concerns.

* Implementing the Ports to Plains initiative that would convert existing state roads to highways.

The Perry campaign called Strayhorn’s plan unrealistic, saying it provides no new money to pay for transportation projects. “Carole Strayhorn has been all over the map when it comes to transportation and her latest proposal amounts to unfunded promises that will leave Texans stuck in traffic for decades,” Black said.

Strayhorn has suggested using $4 billion in Texas Mobility Bonds and $3 billion in revenue bonds to pay for her plan. That money, Black said, was already designated for other projects.

Hillsboro Mayor Will Lowrance, who support’s Strayhorn transportation plan, spoke out against the Trans Texas Corridor at TxDOT’s public hearing in Hillsboro. Citizens are concerned that TxDOT will take their land, divide their farmland, and harm the environment, he said. Part of the problem for most people is the unknown. “Until they open the contracts with Cintra/Zachry to let us see what they’ve done, how do we know [what’s going on]?” asked Lowrance. Portions of the contract between the state and Cintra/Zachry has not been disclosed to the public. Last year, after the Attorney General issued an opinion saying the contract was subject to public disclosure law, Cintra and TxDOT filed a lawsuit to keep the documents private.

Toll roads and the use of eminent domain to acquire land for TTC have become such hot topics that the issue has also spilled over into the sleepy U.S. Senate race. This week Senator Kay Bailey Hutchison and her Democratic opponent Barbara Radnofsky both criticized portions the Trans Texas Corridor.

Hutchison told reporters last week she was “very concerned” about the Trans Texas Corridor and the taking of private property and didn’t see the need for a toll way between South Texas and San Antonio.

Radnofsky, using Strayhorn’s terminology to describe the plan, testified Aug. 17 at a Rockwall public hearing, calling the “boondoggle” plan the “biggest land grab” in history.

The anti-toll organization CorridorWatch recently filed a complaint with the Federal Highway Administration (FHWA) charging that TxDOT has suppressed public disclosure of environmental impact information that is necessary to comply with the federal National Environmental Policy Act. The group requested FHWA deny TxDOT’s Tier One Draft Environmental Impact Statement. It remains to be seen if their plea will carry any weight.

A former Perry aide, now lobbyist for Cintra/Zachry, Dan Shelley, came under fire this week making plans to take a few state lawmakers on an all-expenses-paid trip to Toronto, Canada, to visit a Cintra-operated toll road. After the Dallas Morning News broke the story, the trip was called off. The law does not prohibit former gubernatorial staffers from lobbying, and junkets are perfectly legal in Texas provided the costs are publicly reported to the Texas Ethics Commission. However, the projected trip provided ample fodder for Perry’s opponents. O

© 2005 The Lone Star Report:


The Return of the Conquistadors

Spanish firm to build and run new PFI toll road in Texas

August 25 , 2006

ICON (International Consruction Review)
Copyright 2006

Grupo Ferrovial, Spain’s construction, infrastructure and services giant, had a busy summer acquiring airports in the UK and Peru. Now it has a concession to build and operate a Texas superhighway.

Construction of the new toll road project, designed to develop an alternative route to Interstate 35 as part of the planned Trans-Texas Corridor is due to start early next year.

This is has been agreed by the Texas Department of Transport under a comprehensive development deal with the Spanish company Cintra - Concesiones de Infrastructuras de Transporte, a member of the Ferrovial group.

Cintra’s partner for the five-year road building programme is the San Antonio-based contractor Zachry Construction Corp, but Ferrovial’s construction company Agroman is getting a share in the business.

Zachry joined with Cintra in a scheme to provide private investment worth $6 billion. The assignment is to design, build and operate a four-lane toll road covering the 500 km distance between Dallas and San Antonio, bypassing the State capital at Austin.

For this concession Cintra is paying the State of Texas $1.2 billion. It gives them the right to build and operate this initial segment of the intended Trans-Texas Corridor.

This would be part of the ‘super-highway’ spanning the United States from the Mexican border at Laredo, making its way through Texas, Kansas and Oklahoma and connecting with the Canadian highway system north of Duluth, Minnesota.

Because it would provide a connection all the way between Canada and Mexico, the project is also described as the North American Free Trade Area (NAFTA) super highway.

The project as conceived by Cintra and its partners and endorsed by the Texas transport department is certainly ambitious. They have talked about developing a corridor providing two lanes for high speed trucks and three for passenger vehicles in each direction, plus high speed and freight railway lines, possibly also telecommunication cables and oil, gas and water pipelines in an adjacent utilities corridor.

But a corridor of this overall width – maybe as much as 360 m - has alarmed people who stand forced to surrender property in land and buildings to the project. This concern has been sharpened by the disclosure that, citing a recent U.S. Supreme Court ruling, the developers intend to exercise the principle of ‘eminent domain’ in land acquisition proceedings on the grounds that they are acting as agents of a public authority.

The developers apparently believe that such rights, once established in Texas, could then be applied across the entire 6,500 km length of the NAFTA highway. Whether that proves to be so depends on the outcome of any challenge that might be launched against such a claim.

The Cintra-Zachry partnership is however in a strong position because they have already secured an agreement granting them the right to develop the new highway in Texas. They have also put money down for the privilege.

The first concession within the Trans-Texas Corridor has already been awarded to Cintra. According to a statement by parent company Ferrovial, construction is expected to start early in 2007 once environmental and other permits have been obtained.

These initial contracts, to build two segments of the new toll road 64 km between Austin and Seguin will be performed 50 per cent each by Ferrovial’s construction subsidiary Agroman and Zachry, which has won around $180 million worth of road contracts already this year from the Texas Department of Transport.

Total construction investment in the new contracts is said to be $1.3 billion.

“The new highway”, the statement explained, “will offer an alternative to I-35 between San Antonio and north Austin, making it possible to avoid the highly congested area of central Austin on medium and long-distance journeys.

“The new high capacity road will absorb growth in long-distance truck traffic expected as a result of trade agreements between the United States, Mexico and Canada.”

Cintra has also recently taken over management of the Indiana Toll Road (ITR) after paying $3.8 billion to the State’s finance authority for the transfer of the asset. In a 50:50 consortium with the Australian bank Macquarie, Cintra now has charge of this 250 km highway which links Chicago with the eastern seaboard of the United States.

The concession will run over 75 years.

The company commented: “The project reinforces Cintra’s presence in the U.S., a strategic market for the company: it has a 99-year concession to operate the Chicago Skyway ($1.83 billion) which links with the Indiana Toll Road, and it is a strategic partner of the State of Texas for 50 years to develop the Trans-Texas Corridor, one of the most ambitious infrastructure projects ever undertaken in the United States.”

© 2006 CIOB:


"We think this right of way must be acquired as soon as possible."

Commission supports D-FW loop

Aug. 24, 2006

Fort Worth Star-Tesegram
Copyright 2006

AUSTIN — A proposed toll road that would encircle Dallas-Fort Worth has a new nickname: the Doughnut.

Texas Transportation Commission members passed out Krispy Kreme doughnuts Thursday to symbolize their support for the outer loop, which would be built in segments from 2011 to 2030 as part of the Trans-Texas Corridor.

They also celebrated the commission’s approval Thursday of a new road-building partnership among Metroplex cities and counties, the North Texas Tollway Authority and the state. The partnership would also work with any companies wishing to build private toll roads in the area.

“We are committed to the Doughnut,” commission Chairman Ric Williamson declared, raising a pastry to about 30 visiting North Texans.

Dozens of boxes of doughnuts were brought into the meeting and passed to speakers and the audience. They were courtesy of Gov. Rick Perry, Williamson said.

Perry came out in support of the Metroplex’s outer loop plan earlier this month. Several people referred to its doughnut shape, and the nickname stuck like wet sugar.

Metroplex leaders asked that Trans-Texas be built close to existing Metroplex roads, forming a loop around the cities rather than going east of Dallas and bypassing the metro area.

Part of the loop would fit snugly around Tarrant County, following Johnson County’s Farm Road 917 to the south and the Parker County line to the west.

The federal environmental review on the proposed route is expected to be completed in the next few years.

North Texas’ support for Trans-Texas stood out during 54 hearings statewide this summer. Most of the nearly 3,000 Texans who spoke or submitted comments about the project were against it.

Planning for the 210-mile loop must start now, said Michael Morris, transportation director for the North Central Texas Council of Governments. “We think this right of way must be acquired as soon as possible,” Morris said, adding that the longer the wait, the more expensive and developed the land will be.

To show support for local control of roads, commissioners stepped down from their dais and held Thursday’s meeting at a conference table, sitting with Regional Transportation Council members.

Commissioners approved a plan that allows Metroplex leaders to solve road problems with a consensus of agencies — including the RTC, the tollway authority and state officials.

As part of the new power-sharing deal, the Plano-based tollway authority has agreed to build several projects, including Southwest Parkway in Fort Worth, and an extension of Texas 121 to Cleburne.

Meanwhile, the Texas Department of Transportation has agreed to seek private-sector development agreements on projects such as Grapevine Funnel toll lanes, Texas 161 in Grand Prairie and Texas 121 in Collin County.

Future work will be decided by the RTC, whose members include the Transportation Department and the tollway authority.

One interesting example may be Texas 121 south of Fort Worth, which state officials say could generate $625 million for future road projects if built as a private toll road.

Gordon Dickson, 817-685-3816

© 2006 Fort Worth Star-Telegram:


TxDOT prepares its 'Wish List' for the 80th Texas Legislature

Texas Transportation Commission Proposed Issues for the 80th Texas Legislature


Version: 8/24/2006


Administration of MTP- Make it clear that the role of TxDOT in the Medical Transportation Program is limited to the actual delivery of a public transportation service for clients of eligible programs administered by the health and human services agencies and the Texas Workforce Commission, when the program recipient is in need of a public transportation service. Also clarify that TxDOT has no role or responsibility, including any financial responsibility, in performing social services.

Aviation Division Authority – TxDOT can serve as the agent for cities and counties in the design and construction of improvements to general aviation airports, but does not have this authority with other state agencies or special districts. Amend the transportation code to define local government as including any agency or political subdivision of the state.

Comprehensive Review of Land/Building Issues – Exempt TxDOT Property from General Land Office Real Property Reviews. Deposit the proceeds of surplus property sales to the State Highway Fund.

MPO Membership – Federal law requires that MPO policy boards should be made up of local elected officials, officials of public agencies that administer or operate major modes of transportation, and appropriate state officials. State law does not provide for the creation of MPOs, or describe their powers, responsibilities, or membership. Amend transportation code to allow for the creation of MPOs, describe their functions, and authorize the commission to delegate responsibilities to MPOs.

Outdoor Advertising Relocation – Cities that have strict ordinances on outdoor advertising sometimes do not allow TxDOT to relocate a billboard to accomodate a highway project. TxDOT must then buy the structure, which can be very expensive. The proposal provides that outdoor advertising rules superseded locally- imposed ordinances. Allow a city to pay the fair market value of the billboard if it wants to enforce its more restrictive ordinance.

Surety Retainage Bond – The recent Federal highway Administration audit of the TxDOT Disadvantaged Business Enterprise Program revealed noncompliance with a federal regulation regarding the prompt payment of retainage subcontractors. Current state law requires TxDOT to whithhold 5% of a whole contract amount until completion of the entire project and acceptance by TxDOT. The new federal law says TxDOT can either: not withhold retainage, or must make incremental payments in whole as work is accepted. The Transportation Code should be revised to comply with this federal regulation.


Amount Retained by Motor Fuels Distributors - Motor fuels distributors in Texas continue to retain 2% of their gross receipts in what they collect from the motor fuels tax. This amount is set in law and continues even though distributors have reduced administrative requirements as a result of the movement of the point of collection of the tax. Although distributors should continue to receive some compensation for the processing of the state's motor fuels tax, their costs of undertaking this is minor compared to what they retain. Therefore the 2% fee should be revisited and reduced.

Motor Fuel Tax Allocation - State law provides that the Comptroller allocates motor fuel taxes to the State Highway Fund and the Available School Fund on or before the fifth workday after the end of the month. The Comptroller, of course, always makes this transfer on the last day possible so that the maximum amount of interest accrues to General Revenue—not the State Highway Fund. It may be more appropriate to provide for a daily transfer of funds instead of a monthly allocation.

Motor Carrier Fees - The revenue generated by oversize/overweight transportation userfees and motor carrier registration fees is not adequately reinvested in the transportation system and is not used to compensate the system for the disproportionate damage caused by heavier loads. These motor carrier permit and registration fees couid be updated and solely dedicated to the Texas Mobility Fund where they can be used to maximize our limited transportation dollars.


Various Modifications to the Vehicle Title and Registration Laws -
Because of multiple changes to portions of the statute and the recodification of the specialty license plate provisions, numerous confiicts exist in current law. Changes are needed to address conflicts in law, provide clarification, allow the department to settle a disabled parking placard case without Attorney General involvement, and to reconcile certain fees.

Temporary Meter Vehicle Dealer Tags - Currently, there is no accounting for how many temporary cardboard tags a dealer issues and no provision to compel printers to identify to whom they deliver the temporary tags. The tags are not secure, are easily duplicated and counterfeited, and provides for wide-spread abuse of the tags. This results in millions of dollars in lost government revenue, contributes to a lack of safety for law enforcement, facilitates criminal activity and promotes uninsured motorists. Current law could be amended to allow the department to issue or contract to issue secure, electronic temporary buyer's, dealer, and converter tags and remove the requirement that the tags be made of cardboard.

Dealer License Term Increases - Because of increasing legislative requirements over the years to process dealer applications, and inadequate staffing levels, a backlog exists in processing dealer applications. This backlog is likely to increase unless extreme measures are taken. Amend the statute to extend the term length to two years so TxDOT can catch up with the backlog.

Lemon Law Eligibility - Since the law was changed in 1999, military personnel, long-term "transient" residents and newcomers to Texas do not have access to the Texas Lemon Law program. The definition of "owner" in the Occupations Code should be changed to mean a person whose new vehicle is registered in Texas, in addition to a person who purchased a new vehicle from a licensed dealer. Add a provision to expand Lemon Law coverage to vehicles that belong to active duty non-resident members of the armed forces in Texas.

Motor Carrier Authority - TxDOT currently has authority to investigate and assess penalties for motor carrier registration violations. However, it has no authority to revoke registrations to collect the penalties assessed for motor carrerier Registration or permitting violations. This limited authority undermines TxDOT's ability to enforce motor carrier statutes and rules and to deter motor carriers from future violations. It also compromises TxDOT's ability to ensure the safety of the traveling public, to protect the value of our transportation infrastructure, and collect revenue for reinvestment into our transportation system.


Advanced Acquisition of Rights of Way - TxDOT cannot generally acquire ROW parcels until after completion of the environmental work. Advanced acquisition of parcels that are likely needed for a transportation project would avoid inflationary impacts and prevent development of the property. Authorize TxDOT to acquire property from willing sellers when their property is identified for possible use in a transportation facility.

Concurrent Jurisdiction of Courts in Eminent Domain Proceedings Condemnation petitions must be filed with county courts at law (in counties that have them) thus precluding district courts from processing such cases. Eminent domain cases could be processed more efficiently if petitions could be filed in any court with jurisdiction.

County Planning Authority for Transportation Corridors - Currently cities and some counties with larger populations (37of the 254 Texas counties) have the authority to set aside land for a known transportation corridor that will be built sometime in the future. The remaining 217 counties do not have this authority. If property is developed, unsuspecting residents and business owners are forced to relocate in order to make way for the transportation project. Legislation could be enacted to authorize the department and counties to enter into an agreement for the purpose of identifying future transportation corridors within the county. Also, each purchase contract or lease made between a subdivider and a purchaser or lessee of land in the subdivision should contain a statement that the land is within a future transportation corridor.

Delegation of Environmental Approval Processes - Federal legislation authorized a pilot program in which TxDOT is allowed to assume the responsibility of environmental approvals. The USDOT will adopt rules for this delegation of authority, but it is necessary for a change in state laws to take place before TxDOT can participate in this pilot program.

Quality Based. Best Value Engineering - All governmental entities are required to follow the qualifications-based selection procedures of the Professional Services Procurement Act. In the initial selection, value considerations are prohibited under law. Instead, a firm or provider is selected based solely on its qualifications, and then the price of a contract is negotiated with that firm to perform whatever professional architectural, engineering or surveying services may be required- if the provider does not agree to a price deemed fair and reasonable, price is negotiated with the second most qualified proposal. This process is not only lengthy, but may not always provide the best value to taxpayers. The Professional Services Procurement Act could be amended to provide an alternative method of procuring engineering, architectural aand surveying services. While qualifications-based selection should not be eliminated, a market-based alternative that incorporates value in addition to qualifications couid also be permissible.

Right of Entry - Property owners sometimes don’t alIow TxDOT or its agents on property to conduct surveys and appraisals when developing certain transportation projects. TxDOT has a right of entry for toll roads but not for other state highway projects. The department could use this authority for state highway projects.


Capitalize the Rail Relocation and Improvement Fund
- This fund is already established in the Constitution and needs to be capitalized by the Legislature. Rail relocation and improvements have substantial public benefits. However the high cost of capital improvements mean that the private rail companies do not make many needed rail improvements. The Rail Relocation and Improvement Fund was created and approved by voters to help offset this high cost on projects where there is a public benefit. A revenue source should be identified to fund the Rail Relocation and improvement Fund in statute. The state can choose to reallocate and existing general revenue source or create a new tax/fee. Five possibilities for taxes/fees that might capitalize the rail fund are currently being researched. They include: a diesel fuel tax on trains, a raming/deramping fee charged at rail intermodal facilities, a per-ton mile charge on rail operators traveling within Texas with an extra charge for HAZMAT, an origin/destination charge per Texas trip on rail facilities (extra HAZMAT charge), and a sales tax on the shipping cost of moving of goods by rail.

Rural Rail Transportation Districts (RRTDs)/RailLoans: Currently, RRTDs provide a valuable resource to the state: They help recover abandoned rail lines. However, TxDOT does not have any oversight over these entities, despite the fact that it is the agency in charge of the state's rail system. This could be remedied in statute. In addition, TxDOT should have the authority to provide low-interest loans to these and other rail entities in the state.

Rail Safety Inspection Program: This program was set up to fund rail inspections in Texas- However; there is no mechanism in place to asses a penalty on rail companies who do not pay the annual fee required to fund this program. This could be remedied in statute.

Use of available funds for Rail Projects: Currently TxDOT cannot use Texas Funds on rail projects without waiting for a line-item appropriation from the legislature. Additionally, the department cannot use surplus tolls or concession fees on rail projects. These matters could be remedied in statute.

Planning/Constructing non-TxDOT rail facilities: The Federal Railroad Administration requires Texas to provide a statewide rail plan on all rail facilities. However, statute does not expressly give TxDOT the authority to plan and study for non-TxDOT rail facilities. This should be remedied in statute. In addition, TxDOT should also have the flexibility to finance, construct, maintain, and operate non-TxDOT rail facilities in addition to state-owned facilities.


Exclusive Truck Lanes
- The Transportation Code is not clear on the designation of exclusive truck lanes for the Trans-Texas Corridor, unlike the designation of lanes outlined in alternate sections of the Transportation Code. Amend the statute to allow the Commission to designate, on or off the TTC, exclusive truck lanes without a requirement for adjacent lanes for passenger vehicles.

Sobriety Checkpoints – Half of all Texas traffic fatalities are alcohol-related. Sobriety checkpoints have been authorized by Congress, requiring enabling legislation from the state. Sobriety checkpoints been proven to lower the instances of drunk driving in states that have passed enabling legislation. Amend the statute to allow for implementation of sobriety checkpoints by local jurisdictions and Texas DPS.

Automated Camera Enforcement - In the event the AG finds use of automated enforcement illegal in Texas, such legislation would allow law enforcement entities with already stretched resources to target problem areas remotely. Modify the statute to allow local jurisdictions and Texas DPS to utilize automated enforcement technology for traffic offenses. Variable Speed Limits - Allow for use of dynamic message signs to regulate speed limits according to roadway conditions (inclement weather, traffic crashes, and work zones). Allow the TxDOT Executive Director or designee to set variable speed limits based on current conditions.


CDA Enhancements - There are opportunities to enhance the value and the ability of the department to enter into Comprehensive Deveiopment Agreements. There are a few proposed remedies: 1) Repeal or extend the CDA sunset date, currently August 31, 2011. 2) Allow TxDOT to assume the debt of a developer and issue bonds in order to terminate a CDA. 3) Allow CDAs on non-tolled projects. 4) Remove the cap on concession terms- 5) Remove the funding cap on CDAs, currently 40% of federal obligation authority. 6) Deposit concession and surplus toll revenue to the Mobility Fund. 7) Provide an alternative dispute resolution process for CDA disputes. 8) Authorize TxDOT to set up a trust account in Fund 6 or in a private bank for the deposit of concession fees, with interest to go back to the account.

CDA Entity - Establish the institutional capability for a public to participate in the CDA procurement process as a project proponent, it is in the public interest to establish a fair and competetive process among private sector project proponents, local toll authorities, and a TxDOT entity such that the best value proposition moves forward. In any evaluation of a project proposal, TsDOT management has no preference between a project proponent that is a private company, a local toll authority, or a TxDOT entity. The sole consideration in evaluation is the best value.

Various Regional Issues - There are opportunities to coordinate state and regional efforts to improve mobility in Texas by explicitly authorizing certain transactions among the Texas Department of Transportation (TxDOT ), other toll road entities and their private sector partners.

Regional Tollway Authorities and Regional Mobility Authorities - There is no legal mechanism by which a Regional Tollway Authority (RTA) can dissolve, by which a county can withdraw from an RTA, or authorizin an RTA to become or take on the powers of a Regional Mobility authority (RMA) .

State Acquisition of Toll Roads - To ensure that state and regional toil roads are run as efficiently as possible on behalf of the motorists in Texas, state law should ensure that the entity most capable of operating and improving toll roads has the authority to acquire existing systems.

Leasing Highways - State law may not be sufficient to authorize TxDOT to lease or license state highway right of way to an RMA so that the RMA can construct a toll project on that property. Additionally, state law does not currently authorize TxDOT to lease an existing state toll project to a private entity so that entity can operate the project and retain all or a portion of the toil revenue in exchange for lease payments to TxDOT.

Toll Operations and Enforcement - There are opportunities to improve the Texas Department of Transportation's toli operations system through enhancements to current administrative and enforcement activities.

(1) Authorize a driver license suspension for individuals who are convicted of toll violation offenses and fail to pay the outstanding tolls and corresponding administrative fees.

(2) Authorize denial of renewal of vehicle registration for individuals who fail to pay outstanding tolls and corresponding administrative fees. The potential for driver license suspension and/or denial of vehicle registration may not only encourage payment of outstanding tolls and administrative fees, but may serve as deterrent against future violations.

(3) Authorize the department to enter into agreements with local governments or other political subdivisions to allow TxTag® customers to pay for airport parking using their transponders.

(4) Clarify that developers who enter into comprehensive development agreements have the same powers and duties as the department with regard to toll violation enforcement activities. Clarifying the language related to toll violation enforcement procedures will alleviatte the developers concerns regarding their ability to pursue violators to the fullest extent of the law.

(5) Clarify and make more explicit the department's authority to pursue post-billed video tolling. Authorizing video tolling creates an additional tolling tolling method for the department and potential developers and could be a more convenient method of toll payment for some drivers.

© 2006 Texas Department of Transportation:


Thursday, August 24, 2006

"Inland Port of Dallas: Linchpin of a new NAFTA corridor."

America for Sale

9/24, 2006

William Norman Grigg
The New American
Copyright 2006

As our government careens toward bankruptcy, Americans are being dispossessed by the outsourcing of industrial jobs and the buyout of our infrastructure by foreign interests.

We begin with a parable: Driven to the streets after a run of relentless misfortune, a man took up station on a street corner holding a hand-lettered sign stating: "Will work for food."

Most pedestrians and motorists passed the desperate man without so much as a second's worth of thought. One exception was a well-dressed businessman, who read the sign while waiting for the street light to change. But burdened by thoughts of his own concerns, the businessman gave in to a moment of imprudent sarcasm.

"You 'work for food'? I work for Visa!" he exclaimed to the sign-bearing man. "I'm working for food I ate years ago!" After getting the green light, the businessman launched one last unworthy gibe: "You're not broke — you're even!"

The homeless man eventually found a steady job paying just enough for him to get by and save a little money. His employer, a large and amoral conglomerate paying most of its employees subsistence wages, used its workers' savings (which the conglomerate controls) to make loans to spendthrifts like the heavily leveraged businessman — people who continued to live well beyond their means by stretching their credit lines well past the breaking point. At the same time, the conglomerate quietly used its expanding financial holdings to buy up practically everything in sight.

Eventually, the loans were called in, the debtors were unable to pay, and the businessman found himself — along with many of his fellow spendthrifts — working for that same predatory conglomerate. His earnings and standard of living were "harmonized downward" to those of the homeless man whose plight he had once mocked.

Adapted from a stand-up routine broadcast on Comedy Central about a decade ago, this parable is not intended to inspire mockery of the homeless or other unfortunate people. It's intended to encourage a realistic appraisal of our national economic condition. Think of the homeless man as symbolizing the poor but industrious Chinese population, willing and eager to work for a fraction of what Americans earn, and the businessman as a stand-in for an American population whose prosperity is largely a debt-enhanced illusion.

The conglomerate, of course, is the entity upon which our nation and our government have become increasingly dependent to underwrite that pseudo-prosperity: the Communist Chinese regime, which is rapidly acquiring the means quite literally to buy our country out from underneath us.

Indeed, the process of selling off public assets to foreign interests is already underway.

In June, for example, a Spanish-Australian conglomerate paid $3.8 billion to lease the Indiana Toll Road. Transfer of electronic tolling equipment began in August, and by fall it is expected that the new foreign owners will be collecting tolls once paid by Indiana residents to their own state government. And similar deals are being struck by states and municipalities across the country.

"Roads and bridges built by U.S. taxpayers are starting to be sold off, and so far foreign-owned companies are doing the buying," reported the Associated Press on July 15. At present the main foreign players in these deals are companies based in Australia and Spain. But as China accumulates ever-increasing quantities of depreciating dollars, it will start looking for tangible goods in which to invest those dollars. And as we will see, some analysts in this country are suggesting that we should welcome Chinese "direct investment" in our country as a way of closing our imponderably huge "fiscal gap."

Beijing Buyout

"Without Chinese support, the dollar would have already collapsed, bond yields would have soared, and the U.S. economy would already be in a recession, if not a depression," observe Bill Bonner and Addison Wiggin in their study Empire of Debt: The Rise of an Epic Financial Crisis. "Where does the money come from? The Chinese get the dead presidents from selling products to live Americans, who seem ready to consume anything that comes their way. First, the dollars come rolling off U.S. printing presses, then they make their way into the hands of Chinese and other manufacturers, and finally, they are returned to their birthplace as loans. China is fast becoming America's 'company store,' to whom we owe our standard of living and maybe even our soul."

By accumulating hundreds of billions of dollars in their foreign-exchange holdings, the Chinese are acquiring the power to define our nation's economic destiny. At some point, perhaps very soon, Beijing will have the ability to decimate our currency by selling off its dollar- denominated bonds. But this would inflict severe damage on China's economy as well, making that option the economic equivalent of a suicide-bomb attack.

A better approach, from Beijing's perspective, would be to take its huge and expanding supply of depreciating dollars and invest them in tangible productive assets. In recent years, China has been following that approach in the Western Hemisphere. During his 2005 tour of Latin America, President Hu Jintao inked lucrative energy and resource deals with Brazil, Argentina, and Venezuela. In January, China completed a deal with Canada for joint development of Alberta's uranium mines and oil sands.

With Beijing using its dollar hoard to buy up assets in both South America and Canada, what's to stop it from buying up the U.S.A. — a debt-plagued country with vast natural resources, the world's best transportation system, and a huge (and increasingly idle) manufacturing base?

Horrifying as the prospect of a Beijing buyout would be to most Americans, the concept is being discussed, in principle, by some policymakers as a solution to our impending — and all but inevitable — national bankruptcy.

How Big Is the Deficit?

"The federal government keeps two sets of books," noted USA Today for August 3. "The set the government promotes to the public has a healthier bottom line: a $318 billion deficit in 2005." An "audited financial statement produced by the government's accountants following standard accounting rules" discloses that the actual deficit for 2005 was $760 billion," continues the paper. And if the costs of Social Security and Medicare were included in the total, as any honest accounting would require, "the federal deficit would have been $3.5 trillion."

That's the annual deficit — not the national debt. In what sense is a deficit of nearly one-third of a trillion dollars "healthy"? In roughly the same sense that congestive heart failure is "healthier" than a sucking chest wound: Both are lethal if untreated, but the latter will kill much more quickly.

"We're a bottom-line culture, and we've been hiding the bottom line from the American people," complains Rep. Jim Cooper (D-Tenn.), a former investment banker who offered a draft resolution — supported by congressmen on both sides of the aisle — to require the president to include audited spending and deficit numbers in his budget proposals. "It's not fair to [the people], and it's delusional on our part." That Washington has invested heavily in the preservation of that delusional system is illustrated by the fact that Rep. Cooper's proposal for honest accounting wasn't even considered by the Senate.

Official Washington remains determined to conceal the size of the "fiscal gap" — a figure that includes not only the existing national debt, but also future commitments, such as Medicare and Social Security. A 2005 report compiled for the National Bureau of Economic Research by economists Jagadeesh Gokhale and Kent Smetters concluded that the fiscal gap is $65.9 trillion, and growing.

The "fiscal gap," explains Professor Laurence J. Kotlikoff of Boston University, offers the most telling measure of a country's solvency. If the "fiscal burdens facing current and future generations ... exceed the resources of those generations, get close to doing so or simply get so high as to preclude their full collection, the country's policy will be unsustainable and can constitute or lead to national bankruptcy."

By any rational reckoning, the United States has already reached that point.

The estimated fiscal gap of $65.9 trillion "is more than five times U.S. GDP and almost twice the size of national wealth," Kotlikoff continues. "One way to wrap one's head around $69.5 trillion is to ask what fiscal adjustments are needed to eliminate this red hole. The answers are terrifying. One solution is an immediate and permanent doubling of personal and corporate income taxes. Another is an immediate and permanent two-thirds cut in Social Security and Medicare benefits. A third alternative, were it feasible, would be to immediately and permanently cut all federal discretionary spending by 143 percent."

Beijing as "Savior"?!

These details are offered by Dr. Kotlikoff in Is the United States Bankrupt?, a recently published paper commissioned by the Federal Reserve Bank of St. Louis. To begin closing the fiscal gap, Kotlikoff urges imposition of a national sales tax to replace existing income, payroll, and estate taxes; phasing out the existing Social Security Program in favor of a Personal Security System into which all workers would be required to give 7.15 percent of their wages into an investment fund managed by the Social Security Administration; and abolishing Medicare and Medicaid in favor of a "Medical Security System," under which Americans would receive "an individual-specific voucher to be used to purchase health insurance for the following calendar year."

Kotlikoff believes that these radical reforms would dramatically reduce the level of current federal spending — which is, at best, a debatable assumption. In any case, a fiscal gap still remains that can only be closed through additional revenues. How is it to be overcome?

Some relatively optimistic commentators insist that increased productivity — working smarter, rather than harder — will lead to consistent growth in the U.S. Gross Domestic Product. Kotlikoff, after crunching the numbers, doesn't buy into this assessment.

"Were productivity growth a certain cure for the nation's fiscal problems, the cure would already have occurred," Kotlikoff points out. "Assuming the United States could restrain the growth in its expenditures ... is there a reliable source of productivity improvement to be tapped? The answer is yes, and the answer lies with China."

"Not only is China supplying capital to the rest of the world, it's increasingly doing so via direct investment," he points out. "For example, China is investing large sums in Iran, Africa, and Eastern Europe." Given that China holds hundreds of billions of dollars in its foreign exchange reserve, the question for the United States "is whether China will tire of investing only indirectly in our country and begin to sell its dollar-denominated reserves. Doing so could have spectacularly bad implications for the value of the dollar and the level of U.S. interest rates."

Another possibility presents itself, however: China could use its dollar hoard to buy valuable assets within the United States. In other words, rather than dumping its dollars, China could use them to buy up the United States.

"Fear of Chinese investment in the United States seems terribly misplaced," Kotlikoff writes soothingly. "With a national saving rate running at only 2.1 percent — a postwar low — the United States desperately needs foreigners to invest in the country. And the country with the greatest potential for doing so going forward is China." In fact, China could emerge as "the world's saver and, thereby, the developed world's savior with respect to its long-run supply of capital."

The Buyout Begins

Unlikely as it may seem that foreign interests could buy our country out from beneath us, the process is already underway.

"On a single day in June," reported the AP on July 15, "an Australian-Spanish partnership paid $3.8 billion to lease the Indiana Toll Road. An Australian company bought a 99-year lease on Virginia's Pocahontas Parkway, and Texas officials decided to let a Spanish-American partnership build and run a toll road from Austin to Seguin for 50 years. Few people know that the tolls from the U.S. side of the tunnel between Detroit and Windsor, Canada, go to a subsidiary of an Australian company — which also owns a bridge in Alabama." These are just a few examples of how roads and bridges built with U.S. taxpayer dollars are starting to be sold off, and so far foreign-owned companies are doing the buying.

State and local governments are strapped for cash and relatively limited in the financial tools at their disposal. (While they can float bond issues, for instance, they cannot simply write blank checks that are covered by new money printed by the Federal Reserve.) Thus many of them, lured by the prospect of a quick influx amounting to billions of dollars, have put public assets — highways, airports, utilities, and even state-run lotteries — on the auction block.

While this approach offers a short-term remedy for state and local governments, it leaves the public facing the worst of both worlds: the prospect of increased taxes to cover rising local expenses, plus paying fees and tolls to foreign companies that are, in effect, absentee landlords over what had been locally controlled infrastructure. Referring to the sale of a 75-year lease over the Indiana Toll Road to an Australian-Spanish consortium, Democratic state Representative Patrick Bauer summarized the lose-lose proposition: "In five, maybe 10 years, all that money is gone, and the tolls keep rising and the money keeps flowing into the foreign coffers."

Last winter, much of the United States was figuratively up in arms over the prospect of an executive branch deal to permit Dubai, one of the United Arab Emirates (UAE), to operate U.S. port facilities. This was seen, with just reason, as a potentially disastrous breach of national security, since it would put our port security in the hands of a company owned by a government cozy with al-Qaeda. Yet less than six months later, Congress enacted a "free-trade" agreement with Oman — which borders Yemen, Saudi Arabia, and the UAE — that would permit government-controlled companies in that Arab nation to own and operate U.S. ports.

Not surprisingly, China — which now controls the most crucial port facilities in the hemisphere, the "anchor ports" to the Panama Canal — is looking to build on that advantage, and it has cash-hungry politicians across the country lining up to help.

In late July, three members of the Dallas City Council — Ed Oakley, Bill Blaydes, and Ron Natinsky — traveled to China to discuss a possible joint venture involving building and operating a shipping, storage, and distribution facility located inland for the purpose of relieving congestion at seaside entry ports, called the "Inland Port of Dallas," described by Traffic World as the "linchpin of a new NAFTA corridor." (The nascent Dallas port facility already has a working relationship with the Chinese-controlled Panama Canal Authority.) "Dallas hopes to become the place where East meets West — literally," notes the publication. "It seeks Asian imports in containers shipped from Los Angeles and Long Beach and intermodal freight moving north from Mexico on the proposed $180 billion Trans-Texas Corridor, or 'TTC.'"

This explains the pilgrimage of Dallas councilmen to Beijing to court China's favor. Houston's city government has also made a pitch to China. Both Houston and Corpus Christi are reportedly offering Beijing access to ports on the Gulf of Mexico, and China is reportedly in negotiations to lease Kelly Air Force Base, which was converted into an industrial park about five years ago.

But these developments in Texas are just "part of a larger battle that involves cities such as Kansas City, Missouri; St. Louis; Memphis, Tennessee; and even Indianapolis, all of which hope to use transportation and logistics assets to become the next big North American Gateway for Asian imports," concludes Traffic World.

Beijing, U.S.A.

But we're not just talking about importing inexpensive Chinese-made consumer goods. Remember the process described by Bonner and Wiggin in Empire of Debt: dollars are printed by the Federal Reserve, which are spent on Chinese-made goods, and end up being sent back to the United States as loans, which are used to buy more Chinese-made goods.

We've reached the point in this process where American politicians are literally begging Beijing to be taken on as business partners. And if Laurence Kotlikoff's recommendations prove attractive to policymakers, our government will come to embrace "direct investment" from China as the key to staving off utter insolvency.

What this could mean, in practical terms, is that the debt-wracked American middle class would suffer the fate of the businessman in our parable.

© 2006 American Opinion Publishing Incorporated:



"Both MIG and Transurban have also found it impracticable to operate independently in the U.S."

Two operators take different on-ramps to access US tollways

August 25, 2006

Rod Myer
The Age (Australia)
Copyright 2006

AUSTRALIA'S two major listed tollway operators, Macquarie Infrastructure Group and Transurban, have both adopted the US as their second home, a reflection of the lack of reasonably priced opportunities in Australia.

MIG pioneered the US market, bidding more than $US1 billion more than rivals to grab control of the Chicago Skyway in 2005.

Both MIG and Transurban have also found it impracticable to operate independently in the US and have taken different approaches to remedying that. Transurban will launch an unlisted fund in the US worth about $US1 billion. It plans to list it when its value reaches $US2 billion. MIG has teamed up with an unlisted, US-based Macquarie offshoot and the two will share a $US1.5 billion fund to begin with.

MIG shares have lost 22.5 per cent in the past year. Transurban is down 1.8 per cent.

The sector is unloved because investors fear higher interest rates will damage it. MIG has been seen as more vulnerable than Transurban. In the past year it has spent $1.8 billion on two US toll roads and a stake in the massive French APRR network. Transurban spent $800 million on US expansion, admittedly from a lower asset base.

The market seems to have favoured Transurban for two reasons: it borrows less aggressively and it pays no fees to a parent. Transurban funds distributions 43 per cent from borrowings. MIG does so at 60-70 per cent even in a year when no performance fees are paid. MIG's capital management reforms will have to yield results before the market sees it differently.

The reporter has Transurban shares.

© 2006 The Age:


The "Macquarie model" is one of underperformance

MIG driven to road self-off

August 25, 2006

Robert Clow
The Australian
Copyright 2006

MACQUARIE Bank's flagship infrastructure fund has been forced to sell stakes in its US toll roads to fund a share buyback and arrest a slide in its share price that would starve its parent of performance fees.

It is the second major step this year to appease investors in Macquarie Infrastructure Group, which has lagged the broader market by 35 per cent in the past 12 months.

Last month it spun off all but one of its Sydney toll roads to give investors a stock that was focused on generating income rather than capital growth after three years of highly leveraged acquisitions.

MIG's underperformance has cast a shadow over the so-called Macquarie model. It has raised questions about Macquarie's ability to continue to buy assets and package them into fee-paying vehicles that can be sold to investors.

MIG generated performance fees of $91.5 million for Macquarie Bank in 2004-05, but its underperformance in the past year means it will not generate any performance fees for Macquarie Bank in the year just passed.

Yesterday's announcements pushed MIG securities 10c higher to $3.

MIG chief executive Steve Allen said the toll road company's lacklustre price performance prompted several of the moves.

"Long term, we have outperformed (the market)," Mr Allen said. "But - no illusions - short term we have underperformed."

MIG's securities suffered from interest rate worries along with all of the other infrastructure stocks, and investors may also have worried about the impact of rising fuel prices on toll road traffic.

But the biggest worry for MIG shareholders appears to have been the high prices the company paid for its US assets such as the $US3.8 billion (about $4.97 billion) MIG and partner Cintra paid for the Indiana Toll Road. One underbidder said that it bid $US1 billion less for the road.

MIG will sell 50 per cent of its stakes in four US toll roads at values equivalent to the infrastructure company's net asset backing.

Macquarie's US wholesale fund, Macquarie Infrastructure Partnership, plans to buy the roads for $US762 million.

Mr Allen acknowledged that it might be easier to prove the roads' value by selling to a third party. "There's certainly going to be questions about selling them to a related party," he said.

But both sides would hire independent experts to assess the fairness of the sales.

MIG's partnership with US-based MIP is also designed to avoid US worries about infrastructure being sold to foreigners. The two funds have agreed to work together in buying US roads in the future.

Mr Allen has said nationalist worries were one of the biggest issues he faced when MIG and Cintra bought the ITR.

Mr Allen said that partnering with an unlisted US fund was preferable to selling into one of Macquarie's listed US funds because of the volatility of the markets and also because toll road valuations were not well understood in the US.

Mr Allen also stressed that the underlying road performance was strong, with toll revenue up 61 per cent from $486.6 million to $783.7 million; and earnings before interest, tax depreciation and amortisation (EBITDA) up by more than 57 per cent from $369.8 million to $581.8 million.

Much of that increase came from the acquisitions of the ITR and the Autoroutes Paris Rhin Rhone, but even on a pro-forma basis, ironing out the effects of the acquisitions, MIG's revenue grew by nearly 7 per cent and its EBITDA by over 9 per cent.

© 2006 The Australian:


Macquarie Infrastructure Group (MIG) tries to "Americanise" itself

Macquarie Infrastructure looks to US

August 25, 2006

Rod Myer
The Age (Australia)
Copyright 200

MACQUARIE Infrastructure Group is to change strategy in the US, forming a joint venture with New York-based Macquarie Infrastructure Partners to buy a bigger slice of that country's emerging toll road sector.

MIG chief executive Steve Allen said since the US administration blocked Dubai Ports' bid to buy into the US market, there had been significant resistance to foreign infrastructure buyers.

As a result MIG had decided to "Americanise" itself by selling a half share of its four US projects to the unlisted Macquarie Infrastructure Partners — which Mr Allen said is considered a US company despite its Australian heritage.

MIP is incorporated in New York but is a Macquarie offshoot that pays management and performance fees to its Australian parent company. Mr Allen said having a US-based partner would help MIG raise equity there. MIG will be paid $US762 million ($A1 billion) by MIP for half its US assets.

In the year to June MIG recorded a 61 per cent increase in revenue to $783.7 million and a 57 per cent jump in earnings before tax, interest and depreciation from its growing asset base. Net profit fell $348 million to $424.7 million as a result of a big drop in the level of asset revaluation, which MIG treats as income.

Rising interest rates and oil price spikes have made life harder for MIG, slowing the growth of US toll roads and making market less keen to boost infrastructure asset values, Mr Allen said. A new capital management strategy will result in MIG trying to wring more profit from existing assets.

A refinancing of the M6 motorway in England will yield MIG $972 million, $500 million of which will be spent on a share buyback. The market welcomed the buyback and MIG shares rose 10¢ to $3 yesterday. Atul Lele, of White Funds Management, said the buyback "is a positive from a shareholder perspective. It will increase returns per unit".

But MIG is well below its net-asset backing of $3.66 per security. As a result, it paid no performance fees to Macquarie last year and will pay none this year unless the market has a change of heart on the stock.


Full year ($m) 2005-06 2004-05
Revenue 1056 1381
Depreciation 90.4 85.9
Interest 330.5 295.9
Tax 141.36 (26.23)
Net profit 424.7 772.6
Final div ¢ (Aug 13) 11 13.75
Interim ¢ 10 63.75

© 2006 The Age Company :


"People tend to take big things off the table in the lead-up to an election."

MIG dons Uncle Sam mask for America

August 25, 2006

Scott Rochfort
The Sydney Morning Herald (Australia)
Copyright 2006

MACQUARIE Infrastructure Group has attempted to overcome concerns in the United States that large chunks of infrastructure are falling into foreign hands, by signing a deal to sell half its US toll-road assets to another Macquarie fund.

MIG said yesterday it had signed an "exclusivity arrangement" to sell half the assets to the unlisted Macquarie Infrastructure Partners (MIP), based in New York.

The move is also an attempt to boost MIG's flailing share price and answer market criticisms of the high prices it has paid for several US toll-road concessions.

MIG chief executive Stephen Allen said the $US762 million ($1 billion) sale to MIP of the group's stakes in the Indiana Toll Road, Chicago Skyway, Dulles Greenway near Washington and San Diego South Bay Expressway would "demonstrate [their] value".

The deal is subject to approval by security holders and follows a review of the company's portfolio. Mr Allen said the redomiciling of MIG to the US or UK had even been considered.

MIG shares rose 10c to $3. But they are still well short of the $3.66 the company is worth based on its valuation (net asset backing) of its toll roads.

The $US762 million sale of half of MIG's US toll road concessions will be valued at their net asset backing, which Mr Allen said would not only provide a new source of funding for expansion but also help "close the gap between the security price and net asset backing".

Following the emotional public debate in Indiana over the $US3.85 billion sale of the state's main toll road to an Australian-Spanish (MIG and Cintra) consortium, Mr Allen said the new MIG-MIP partnership would "address US domestic issues" with foreign ownership.

"We saw from Indiana that the foreign ownership thing is becoming a bigger and bigger issue," he said.

Mr Allen dismissed suggestions MIP would still be considered Australian, given it not only carried the Macquarie name but was still closely aligned with the Australian investment bank.

"Fundamentally MIP is a New York based entity, a constituted US company," he said. "It's true it's managed as a subsidiary of an Australian company but it sits in New York."

Under the deal, both companies would seek new investments in the US together, which could be plentiful if more states jump on the private toll-road bandwagon.

Mr Allen said MIG was still looking at opportunities in Oregon and Texas but he hoped several other states would follow once the upcoming US congressional mid-term elections are over.

Some state governors, such as New Jersey's, recently played down the prospect of any privatisations but Mr Allen said: "People tend to take big things off the table in the lead-up to an election." He said 36 out of 50 state governors would face election in November.

The deal comes as MIG said it had refinanced its M6 toll road in Britain. It also announced a full-year net profit of $424.7 million, down from $772.6 million. "Lower revaluation income" was blamed.

© 2006 The Sydney Morning Herald:


"In simplest terms, it's just too big for Rockwall County.”

TTC gets thumb's down at TxDOT hearing

August 24, 2006

By Emily Berman
Rockwall County News
Copyright 2006

Several Rockwall County residents attended the Texas Department of Transportation's hearing at the Utley Freshman Center Thursday, Aug. 17 to show their support or opposition to the Trans-Texas Corridor proposed to be built through Rockwall County.

Many political candidates attended, handing out flyers and speaking to residents on their opinions of the TTC-35. The hearing began with a video presentation on behalf of TxDOT introducing the corridor routes and the reasoning behind building them.

Following the video, Doug Booher, the environmental manager for the Turnpike Authority Division, presented a 20-minute PowerPoint show, explaining further in depth what TxDOT would oversee and all the options Texas residents have for voicing their opinions.

Following the presentations, TxDOT staff held a public testimony, giving everyone who wanted to speak, a chance to have their voices heard for three minute periods. Well-known politicians such as Carol Keeton Strayhorn, spoke as well as Rockwall county employees including Commissioner Scott Self.

“Rockwall County commissioners have been working with the city of Rockwall, the city of Royse City, the city of Fate, McLendon-Chisholm and the city of Heath,” Self said. “We have been working over the last couple of years to draw a corridor that goes through Rockwall Š after a lot of work and studying, we have identified this corridor that goes through that we think would have a minimum impact on the county of Rockwall. If we bring the Trans Texas Corridor through this area, we would like for you [TxDOT] to seriously consider that corridor that we have already fit that would have a minimum impact on existent cities.”

Although Self remained rather unbiased on whether this corridor is built, other testimonies proved to be rather passionate and defensive towards these potential plans.

“I'm proud to be standing shoulder to shoulder with Texans who are saying no to the largest land grab in Texas history and no to a secret foreign contract,” Strayhorn said. “I salute to you folks of Rockwall County and surrounding counties here this evening that are speaking up and speaking out. I am absolutely opposed to this massive toll plan. Rick Perry calls it Trans-Texas Corridor, I call it Trans-Texas Catastrophe and as governor I am going to blast it off the bureaucratic books.”

Other representatives such as Hank Gilbert spoke on behalf of the agriculture industry noting how devastating this corridor can be to anyone owning farmland which this corridor will go straight through, wiping out their way of living and rich farmland.

Thom Bouis, candidate for Rockwall County Judge, who it is said organized this “after the fact” hearing for Rockwall County as it was not originally planned in the Dallas area hearings, also greatly opposes this corridor.

“In simplest terms, it's just too big for Rockwall County,” he said.

Most of the others that spoke, including at least one Republican, opposed this corridor. This was the general consensus of the voices of the hearing.

© 2006 Rockwall County News:


"The Trans-Texas land grab must be stopped in its tracks."

Trans-Texas Corridor a bad avenue

August 24, 2006

Cedar Creek Pilot
Copyright 2006

Dear Editor:

The Trans-Texas land grab must be stopped in its tracks. The $184 billion project is slated to cut a path through our region. In its way are nearly 600,000 acres of family farms, ranches and backyards owned by hardworking Texans.

The Austin politicians want to take this land away from Texans and fork it over to a private, foreign-controlled company in the name of “progress” and “development” (via a long, long, long-term lease, never intended to expire).

The private foreign company receiving the land at taxpayer expense then gets to charge us a toll every time we use the new road (which goes into its private foreign pocket). Access on and off the road will be highly controlled, with gas and retail to be placed inside the toll area.

Which private foreign company gets the sales revenue from those? You guessed it.

Who makes up for the lost property tax revenue from the stolen land? You guessed it again — we do.

Wade Gent, Forney

© 2006 Cedar Creek Pilot:


'Shanghai Noon' for Chinese Toll Road Operator

Shanghai district chief probed in fund scandal

August 24, 2006

By Andrew Torchia
Copyright 2006

SHANGHAI (Reuters) - More than 100 investigators from Beijing have arrived in Shanghai to probe a corruption case involving government pension funds, the biggest scandal in the city for decades, Chinese state media said on Friday.

The governor of Shanghai's Baoshan district, Qin Yu, is being investigated for a severe breach of discipline, a spokeswoman for the city said, declining to provide details.

Qin, one of 19 district governors, is the second Shanghai official to be publicly linked to the scandal which the state-owned China Securities Journal described as the city's biggest since economic reforms began in the 1980s.

Chinese leaders have said the government faces self-destruction if it fails to curb graft and the state has launched a series of campaigns to crack down on corrupt officials.

The central government in Beijing has sent more than 100 personnel to Shanghai to investigate the affair on a long-term basis, the newspaper reported.

Beijing sometimes sends its own personnel to other regions during crackdowns on crime to ensure that officials cannot use their local influence to protect themselves.

Some analysts believe the Shanghai scandal is linked to national politics and could be a useful tool for President Hu Jintao, who took over as Communist Party leader in 2002, to further consolidate power by pressuring rivals with power bases in Shanghai.

"Central authorities will likely prevent direct incrimination of Shanghai's top leadership, but they will use the scandals to weaken local authorities enough to enable Hu to transfer them out of the city during next year's party congress," U.S.-based consultancy Eurasia Group wrote in a report.

Earlier this month, the Shanghai government confirmed that Zhu Junyi, director of the Shanghai Municipal Labor and Social Security Bureau, which supervises city pension funds, was being investigated. He has been stripped of his positions.

Zhu is suspected of impropriety involving a 3.2 billion yuan ($400 million) loan of city funds to toll road operator Fuxi Investment Holding Co., according to state media.

Fuxi's chairman, Zhang Rongkun, who has risen from obscurity to become one of China's richest men this decade and is still in his early 30s, has been detained for questioning.

Zhang was ranked China's 16th richest man by Forbes magazine last year with an estimated fortune of $605 million.

Zhang is also non-executive director of Hong Kong-listed Shanghai Electric Group, China's top power gear maker, in which he owns about 8 percent.

Former Shanghai Electric chairman Wang Chengming and executive director Han Guozhang have been detained in the scandal, the firm and city officials said.

The scandal has jolted China's short-term debt market because of concern about the ability of Fuxi, which saw its credit rating slashed this month, to redeem 1 billion yuan in one-year bills.

The country's largest bank, Industrial and Commercial Bank of China, sought to reassure the market this week by issuing a statement saying it had consulted the Shanghai city government on plans to redeem the bills.

Fuxi, one of the largest private investment firms in the city, and Shanghai Electric have said their businesses continue to operate normally.
($1 = 7.97 yuan)

(Additional reporting by Lucy Hornby and George Chen)

© 2006 Reuters :


Road Hazard

Fire chiefs: Indiana Toll Road's new barriers put victims at risk

Aug. 24, 2006

Associated Press
Copyright 2006

GRANGER, Ind. - Fire officials are questioning the safety of barriers recently placed along the Indiana Toll Road's emergency turnarounds by the highway's new private operator, warning that they could hamper their ability to reach crash victims.

Maintenance crews for the toll road's private operator, ITR Concession Co., recently placed barriers of sand-filled barrels along the 157-mile roadway's emergency turnarounds.

Matt Pierce, a spokesman for ITR Concession, said the barrels were placed along the turnarounds - located on the medians between eastbound and westbound lanes - to prevent unauthorized vehicles from using them and causing accidents.

But Liberty Township Fire Chief Bill Branham and other fire chiefs fear the barrels could threaten emergency responders' ability to reach crash victims, because the responders will lose precious minutes moving the barrels out of the way.

"Time is of the essence if someone is in a traffic accident with a car on fire or something like that," Branham said Wednesday.

He and other fire chiefs said they were not told about the barrels ahead of time, and only discovered them during the past week.

ITR Concession is a subsidiary of an Australian-Spanish consortium, Macquarie-Cintra, that won the bidding for the roadway's 75-year tolling rights with a $3.8 billion bid in January.

Branham said his department has had no direct contact with ITR Concession since it took over the toll road's operation at the end of June.

And Portage Fire Chief Bill Lundy said he only heard about the barrels "through the grapevine." He has since inspected those in his territory and said he only got the full story by calling Indiana State Police.

Pierce said the center barrels on the turnarounds are filled with only 100 pounds of sand and can be quickly moved by firefighters. But firefighters said it's not that simple.

For example, Hammond Assistant Chief Pat Moore said large fire trucks on the toll road travel in pairs, with the rear truck slowing traffic so the lead truck has room to swing out and make the turn into the emergency turnaround.

With the barrels in place, both trucks would have to stop, firefighters would have to get out, move the barrels, and get back on.

"It just isn't so simple or safe," Moore said.

Pierce said firefighters from St. Joseph, LaGrange and Elkhart counties were briefed Wednesday on the situation and the new barriers at toll road headquarters in Granger.

He said all of the barrels will be replaced by the end of September with flexible fiberglass poles with reflectors. Emergency responders will be instructed in how to drive over them.

The decision to place those poles was discussed at the Indiana Toll Road Oversight Board's Aug. 9 meeting, Pierce said. Three of board's seven members are top aides to Gov. Mitch Daniels.

The Aug. 9 meeting was only publicized by a notice posted on the door at toll road headquarters two days before. State officials have promised to better publicize future meetings.

© 2006 The Associated Press:


Wednesday, August 23, 2006

'Big Brother' technology begins its roll down a slippery slope

Toll Road 'Scofflaws' Won't Be Able To Renew Car Registration

Aug 23, 2006

Bob Dunn
Copyright 2006

People caught driving on Fort Bend County’s Parkway and Westpark Tollway without a state EZ Tag, or otherwise found to owe the county money for tolls could find themselves unable to renew their vehicle registration until they pay up.

An agreement approved Tuesday by Fort Bend County Commissioners Court members, with the Texas Department of Transportation, will allow the county to electronically “flag” a motorists registration records as a “scofflaw” if that motorists owes money for tolls.

Under the agreement, the commissioners court chose, the county now has the right to prevent motorists from renewing their vehicle registration if they owe any fees, fines or taxes. However, County Judge Bob Hebert said the court intends only to flag vehicles whose owners owe road tolls.

He said the contract was presented as an all-or-nothing opportunity for the county, thus wording that gives the county the right to withhold car registration over past-due fines and taxes had to be accepted, or else the county wouldn’t have been able to use the agreement to see that road tolls are paid up.

Hebert said the court has no intention of expanding use of the state “flags” beyond road tolls.

Meanwhile, registration renewal will become more expensive, as the court approved an order adding $1.50 to registration fees, for the establishment of a “Child Safety Fund.”

Counties were given the ability to increase fees and create such a fund under a new law passed recently by the Texas Legislature. Commissioners did not discuss how the money would be used locally.

Before the new fee, the typical cost of vehicle registration in Fort Bend County was about $63 per year.

© 2006 FortBendNow Inc.:


"This lipstick has already been put on this pig. Now the only way to stop this boondoggle is to send Rick Perry home in November."

Perry's vision for rural highway could become a political pothole

Aug. 23, 2006,

Houston Chronicle Austin Bureau
Copyright 2006

AUSTIN - One out of every eight votes in Rick Perry's margin of victory in the 2002 race for governor came from the rural counties along the Interstate 35 path of Perry's proposed Trans-Texas Corridor.

Now, as he seeks re-election, Perry's long-range transportation vision may be turning into a political liability for the Republican chief executive.

More than 14,000 Texans — almost all opposed to the Trans-Texas Corridor — turned out at Texas Department of Transportation public hearings this summer to express their displeasure with the highway and the governor.

"I'd like to admit that I made one big mistake in my life. I voted for Rick Perry," Rogers-area farmer Leonard Cobb testified at one hearing.

All four of Perry's re-election challengers oppose the corridor. Democrat Chris Bell, independent Kinky Friedman and Libertarian James Werner all have spoken out against it. Comptroller Carole Keeton Strayhorn, running as an independent, attended many of the hearings and called the project the "Trans-Texas Catastrophe" while promising to stop Perry's "land-grabbing highway henchmen."

One of Perry's fellow Republicans on the statewide ballot — U.S. Sen. Kay Bailey Hutchison — also has criticized the project, saying it imposes too heavily on rural landowners.

The Republican Party of Texas in June passed a plank in its platform calling for the repeal of legislation authorizing the Trans-Texas Corridor. The Texas Farm Bureau — a longtime Perry political supporter — wants the state to scrap the project.

The 'blue line'

A dozen alternative routes for Trans-Texas Corridor 35 are under consideration. The toll road corridor would run parallel to Interstate 35 through rural areas from Oklahoma to Laredo, bypassing city congestion to become the new trade highway.

Many of those at the hearings referred to the top alternative on the color map of the Trans-Texas Corridor as the "blue line," a pathway of eminent domain that would take homes and farms and churches for a toll road that likely would be built by a consortium headed by a Spanish company.

Farmers contend the 600-mile long swath will cause the condemnation of about 136 square miles of land, could divide farms and force rural school buses to go miles out of the way to get from one side of the corridor to the other. Many local officials fear it will remove land from their local property tax base.

"This lipstick has already been put on this pig. Now the only way to stop this boondoggle is to send Rick Perry home in November," Mark Wilson testified at a Waco hearing.

Texas Transportation Commission Chairman Ric Williamson said the corridor concept is the only feasible means of easing congestion on state highways while guaranteeing future expansion when needed.

"For every 14,000 people who congregate and protest, there are 1.4 million in downtown Dallas and Fort Worth that recognize congestion on 35 is a problem and somebody's got to do something about it," Williamson said.

Dallas-Fort Worth area officials have been generally neutral on the corridor concept, but questioned the specific plan because its route bypassed the cities and would have done little to relieve local congestion. Perry last Friday ordered the corridor study to include an alternative route proposed by local officials.

Dallas County Commissioner Kenneth Mayfield, a Republican, said he thinks people in the Metroplex would largely oppose the plan because it relies heavily on tolls and has included little public input.

"I dare say, if you took a vote in the Dallas-Fort Worth area, it would be voted down," he said.

Two on drawing board

The Trans-Texas Corridor is actually a series of new transportation corridors proposed across Texas that would be financed and built by private contractors and likely paid for with tolls. The corridors would probably be about 1,200 feet wide, to accommodate separate lanes for truck traffic, passenger traffic, freight rail, commuter rail and utilities.

So far only two projects are even remotely on the drawing board. TTC-69, which would run from Mexico north past Houston, likely using either the Grand Parkway or Beltway 8 as part of its route, is in the preliminary planning stage.

TTC-35, running parallel to Interstate 35, is further along. The state has contracted with a consortium led by the Spanish company Cintra Concesiones de Infraestructuras de Transporte to develop a master plan for the corridor. That plan is what has been the subject of public hearings and angst this summer.

"Fourteen thousand people is a nice turnout, but the fact of the matter is we're looking for input, any better ideas," Perry said of the hearings.

"Those that came out are just against — you know, the agin'ers. It's easy to turn out a bunch of people who are just agin a particular project," the governor said.

Perry said the population growth in the state and traffic congestion demands additional highways and that toll roads are a good way to pay for it. He said most of his political opponents have offered no alternatives, chiding Strayhorn for supporting the expensive double-decking of I-35 without explaining how to pay for it.

"As the chief executive officer of the state, as a person who has laid out a vision ... I think it makes sense for most communities. I think it makes sense to build toll roads."

But the road for Perry's election may not be that easy on this issue.

'Got some explaining to do'

On Monday, Strayhorn outlined a plan to scrap the project and improve I-35 in the existing right of way with additional lanes and double decking in places. Perry has contended that double-decking would be prohibitively expensive, but Strayhorn said it would be more appealing to affected Texans.

State Rep. Dianne White Delisi, R-Temple, the mother-in-law of Perry's chief of staff, Deirdre Delisi, appeared at a Temple public hearing to say the state should concentrate on improving traffic flow on I-35 before seriously considering alternative highways through the countryside.

Gene Hall, spokesman for the Texas Farm Bureau, said the farm and ranch organization is supporting Perry because he has been good for agriculture on a wide variety of issues. But he said the Farm Bureau opposes the Trans-Texas Corridor concept not only along I-35 but statewide.

Hall said it is difficult to know whether rural areas will abandon Perry over the issue.

"He's got some explaining to do as far as the corridor is concerned," Hall said.

Greg Gerig, a corn farmer and a director of the Blackland Coalition opposed to the corridor, said there is a feeling state officials have been arrogant.

"Perry has in effect said, 'We don't care what people at the hearings said; we're going to build it anyway,' " Gerig said.

Perry said he thinks he can persuade voters to look at his entire record.

"If it is just a single-issue person who doesn't want toll roads, I'll do everything I can to explain to him why it is good, thoughtful public policy for the entire state of Texas," Perry said.

"But I hope the vast number of people who go to vote look at an economy that ... is doing as well as it has in a decade or better. I'm proud of the record I've run on."

© 2006 Houston Chronicle: