Tuesday, March 13, 2007

Toller's remorse on SH 121 Privatization: "It makes us want to stop and look carefully before going down a long and costly road."

Was 121 deal the richest?

Estimate says tollway authority would have paid more in long run

March 12, 2007

The Dallas Morning News
Copyright 2007

PLANO – The deal to make State Highway 121 a toll road for $2.8 billion in cash was less than half of what the state could have gotten, according to a very rough estimate unveiled Monday by the North Texas Tollway Authority.

In what everyone acknowledged to be an extremely preliminary analysis, the tollway authority said it could have given the Texas Department of Transportation $2.1 billion up front for the rights to the toll road project in Collin and Denton counties. That is the same figure as the winning bidder, Cintra Concesiones Infraestructuras de Transporte SA.

The difference came in how much money the tollway authority said it could pay over the life of the 50-year toll contract: $4.2 billion vs. Cintra's $700 million offer.

"Is it preliminary? Yes. Is it less than certain? Absolutely," said tollway authority board Chairman Paul Wageman. "But to me, it shows the tremendous strength of our system. It also demonstrates that all of the money will stay in the region."

The agency developed the estimates after a March 2 request from state Sen. John Carona, R-Dallas, who has questioned the rush to form public-private partnerships for urban-area toll roads.

"I was not surprised. As many of us have said for some time, public-private partnerships bear closer scrutiny," said Mr. Carona, the chairman of the Senate Transportation and Homeland Security Committee.

Bill Hale, the Dallas district engineer for the transportation department, said he could not comment on the estimate because he had not had time to review it.

Although the numbers may counter the state's arguments for privately operated toll roads, they will not affect his working relationship with counterparts at the tollway authority, Mr. Hale said.

"I have no animosity toward anyone. I have a good relationship with them," he said, pointing out that the two agencies must work together on 11 other planned toll roads in North Texas.

It remains unclear whether the tollway authority estimates will alter the statewide debate about public-private partnerships, including the one announced last month for Highway 121.

Tollway authority officials expect a debate about the usefulness of their tentative estimates.

"This is sketch-level information," said Jerry Hiebert, the tollway authority's interim executive director. "It does not have our normal level of confidence. But we can't make the numbers any better than they are."

Toll road opponents are likely to seize on the figures as another example of why toll roads should not be leased to private groups.

The estimates make a stronger case for a two-year moratorium on privately operated toll-road deals, Mr. Carona said. A growing number of legislators are lining up to support bills in both chambers that would halt many future deals.

"It makes us want to stop and look carefully before going down a long and costly road," he said.

The pending Highway 121 contract has raised eyebrows because of its automatic toll increases every two years. But Mr. Carona has emphasized that the estimates unveiled Monday will not affect that deal, which is in final negotiations.

The estimates will be used to help the state analyze future toll road deals, Mr. Carona said.

One Denton County representative on the tollway authority board of directors said that while the numbers are interesting, the region needs to keep moving forward with the Cintra deal. The $2.1 billion in upfront money is needed immediately for construction projects on Interstate 35E around Lewisville Lake, FM423 and FM720, tollway authority board member Jack Miller said.

"What's done is done," he said. "There is a deal on the table for Highway 121, and the money generated from that is very critical to our area."


© 2007 The Dallas Morning News Co. www.dallasnews.com

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