Thursday, April 12, 2007

"The Legislature is rebelling against the privatizing of toll roads."

NTTA to enter bid for 121

Late toll-road proposal comes as Legislature fights privatizing

April 11, 2007

The Dallas Morning News
Copyright 2007

PLANO – The coveted State Highway 121 toll-road contract might stay in Texas hands after all.

The North Texas Tollway Authority decided Wednesday to take another shot at securing the rights to build and run a toll road on Highway 121, hoping to beat out the state's 50-year agreement with Spain-based Cintra, which has not received final approval.

The 11th-hour proposal effectively reopens the competition for Highway 121 at a moment when the Legislature is rebelling against the privatizing of toll roads. The decision came a day after the state House overwhelmingly approved a two-year freeze on private toll-road contracts, with the exception of North Texas.

Tollway authority board members instructed staff members Wednesday to start crunching numbers for a belated bid for the lucrative Highway 121 project in Collin and Denton counties. A formal bid is due in six weeks.

"We're very confident that we can submit a competitive proposal," said Susan Buse, the tollway authority's chief financial officer.

Critics of the Cintra deal alleged that the tollway authority was discouraged from bidding on the project sooner. But state transportation officials have agreed to let the agency back into the mix.

The tollway authority re-entered the bidding process at the request of state lawmakers who have sharply questioned the Cintra deal since it was unveiled in February. Lawmakers have complained about the length of the contract, planned toll increases and provisions that limit competing roads.

Today, tollway authority representatives will formally outline their interest in a Highway 121 bid to the Regional Transportation Council, a 40-member body that governs North Texas road projects.

Tollway authority officials said Wednesday that the agency also intends to pursue five additional North Texas toll road projects. Chairman Paul Wageman said the goal is to build the projects without tax dollars, freeing up at least $1 billion for even more projects.

Some transportation officials have questioned whether the tollway authority has the financial capacity to take on Highway 121 without affecting the agency's other planned projects throughout the region.

But Mr. Wageman said Wednesday that the tollway authority is confident a Highway 121 bid would not jeopardize other projects.

"We feel comfortable that once we finalize our [Highway 121] bid, it will still be a net positive to our system and actually enhances our ability to do more projects," Mr. Wageman said.
'Protocol' agreement

In a controversial "protocol" agreement reached last year with the Texas Department of Transportation, the tollway authority dropped its plans to bid on State Highway 121 in exchange for a five-year contract to collect tolls on the road.

But after weeks of backlash against the Cintra deal, the Transportation Department recently agreed to amend the agreement and allow the tollway authority to re-enter the bidding for Highway 121.

On Wednesday, department officials issued a statement welcoming the tollway authority's intention to bid.

"Regional leaders will make the decision using competition to drive down costs and maximize the returns," the statement read. "That's exactly the way it should be."

Under the state's pending deal with Cintra, the company would pay $2.8 billion in cash, including an up-front payment of $2.1 billion that can fund other North Texas transportation projects. Company representatives said Wednesday that they're confident their bid will prevail.

"We believe our proposal offers the best solution for the region's transportation challenges," said Rossanna Salazar, an Austin-based Cintra spokeswoman.

Shortly after the Cintra deal was announced, the tollway authority said a preliminary analysis showed it could pay more than $6 billion for the rights to Highway 121 – more than twice the value of Cintra's proposal.

Regional leaders have since said the difference may lie in how the estimates were calculated. The tollway authority figure, they said, may include projections of how much excess toll revenue will be shared in future decades. Cintra's proposal did not attach any dollar figures to future excess toll revenue sharing.

Regional leaders also point out that the tollway authority's estimate includes much higher traffic counts than predicted by local planners.

Jere Thompson, a former tollway authority board chairman, has said the agency can pay more money upfront because it can borrow money at cheaper interest rates and because it doesn't have to include a profit in its calculations.

In a legislative hearing this week, Texas Transportation Commission Chairman Ric Williamson said that if a tollway authority bid can generate more money for North Texas roads, he's all for it.

"I want the best deal for the state," Mr. Williamson said. "If there's a better transaction for the state of Texas, that's the transaction we need to be a part of."
Simmering controversy

The hearing stirred up controversies still simmering from the original bidding process last year. Rep. Linda Harper-Brown, R-Irving, said a Cintra official recently told her Cintra made clear during the bidding process that the company would not submit a proposal for Highway 121 if the tollway authority were allowed to bid as well.

The company considers the tollway authority an "insider" and did not want to compete against a hometown bidder, Ms. Harper-Brown said.

"I don't want anybody to say to me one more time that NTTA did not want to bid on this project," Ms. Harper-Brown said.

At the hearing, Transportation Commissioner Ted Houghton said the tollway authority passed on previous chances to bid on Highway 121. Transportation Department officials declined to comment further Wednesday.

Jack Miller, the tollway authority's vice chairman, said Wednesday that board members authorized staffers last year to craft a proposal for Highway 121. But he said the agency backed off after Transportation Department officials warned that if the tollway authority's bid was unsuccessful, it could not collect tolls on the road as a contractor.

"It was kind of an all-or-nothing situation," Mr. Miller said.

Ms. Salazar, the Cintra spokeswoman, said last year's Highway 121 bid process "was the same as those we have about any bid process we consider. And that is that the playing field be a level one for all bidders, and that the process be transparent."

© 2007 The Dallas Morning News Co

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