Friday, April 13, 2007

"Cintra agreed to seek the contract with the understanding it would not have to compete against the NTTA."

Texas Toll Plan Could Take Financial Detour


by Richard Williamson
The Bond Buyer
Copyright 2007

DALLAS — Plans to build the $2.6 billion Highway 121 near Dallas were thrown into confusion yesterday as the North Texas Tollway Authority threatened to supplant a private Spanish developer that won preliminary approval for the project.

The NTTA is a governmental division of the state that finances, builds, and operates toll projects in North Texas. Under a deal worked out with the North Central Texas Regional Transportation Council, the NTTA agreed to operate the 121 project, which would be built and financed by Cintra, a Spanish company that has similar projects in the United States and Europe. Cintra was to have paid $2.1 billion up-front for the project and would have been allowed to collect tolls for 50 years.

While the deal was awaiting environmental approvals, the transportation council allowed NTTA to announce plans to reenter bidding for the project. The deadline for reopening bidding was yesterday.

Officials from Cintra could not be reached for comment. Cintra agreed to seek the contract with the understanding it would not have to compete against the NTTA, a public entity that was considered to have an inside track.

The effort to get the NTTA back in the bidding was spurred by Texas lawmakers who are soon expected to pass a two-year moratorium on privately financed toll-road projects. The Highway 121 financing scheme was the result of action by the previous Legislature.

Under a version of the moratorium the state House passed Wednesday, toll projects in the Dallas-Fort Worth area were to be exempted from the moratorium. But some lawmakers were still troubled by the length of the proposed 50-year contract with Cintra.

At issue is whether the state can build toll projects more cheaply with municipal bonds than private developers. Sen. Steve Ogden, R-Bryan, author of the legislation allowing the private-public financing in the 79th Legislature, is now the sponsor of bills calling for a moratorium. That has left the Texas Department of Transportation in a state of confusion over its mandate from policymakers.

“We don’t really know what to do,” said TxDOT spokeswoman Kelli Petras. “When we use the tools they give us and we get reprimanded, it’s really kind of a double standard.”

TxDOT is the agency that oversees all Texas projects and was involved in planning a legislatively authorized $184 billion project called the Trans-Texas Corridor that would be idled by the new legislative moratorium. Under current policy, TxDOT, headed by Texas Transportation chairman Ric Williamson, delegates decision making on projects to regional authorities, such as the North Texas Regional Transportation Council.

In a meeting of the 40-member North Texas Regional Transportation Council yesterday, NTTA laid out its plans for Highway 121 and other projects.

NTTA wants to develop five North Texas toll-road projects without tax dollars.

“In the case of SH 121, regional leaders will make the decision using competition to drive down costs and maximize the returns,” Williamson said. “That’s exactly the way it should be.”

The NTTA received legal authority to bid for the project with passage of SB 965 yesterday, which puts it on the same footing as Cintra.

© 2007 The Bond Buyer :

To search TTC News Archives click HERE

To view the Trans-Texas Corridor Blog click HERE