Thursday, June 28, 2007

"Some lawmakers wonder if Mr. Perry's office and TxDOT have shown favoritism toward Cintra."

Complex forces at work in 121 contract fight

June 28, 2007

The Dallas Morning News
Copyright 2007

Ric Williamson and his fellow transportation commissioners will find themselves in a tight corner today as they meet in Austin to decide who will build the State Highway 121 toll road.

On one level, the commission is simply fulfilling its duty as the Texas Department of Transportation's governing board by deciding whether to award a multibillion-dollar contract to Spanish construction firm Cintra or give it to the North Texas Tollway Authority.

But a whole lot more is going on at another level.

Some say private firms may shy from Texas if Cintra loses 121 project

The Highway 121 decision also pits Mr. Williamson's desire to support Gov. Rick Perry's ambitious highway-building agenda against a Legislature intent on exerting more control over how Texas builds roads. And some lawmakers and other critics of Mr. Perry's policies see Cintra's involvement in the controversial Trans Texas Corridor lurking in the background of today's Highway 121 decision.

"I think [the commission] has a difficult decision to make," said state Rep. Mike Krusee, chairman of the House Transportation Committee and a Perry ally. "They are on record as believing in the value of public-private partnerships, but they are also in favor of local control. So, those two are in conflict on this road."

Conflict has been a constant during an eight-year Highway 121 odyssey that focused on a 26-mile stretch of toll road in Collin and Denton counties – a potential treasure trove expected to yield toll receipts totaling in the billions of dollars.

At contentious hearings this month in North Texas, local elected officials and others on the Regional Transportation Council failed to achieve an easy consensus.

True, the vote was decisive – 27-10 in favor of North Texas Tollway Authority building the road. But it came only after the council's professional staff argued for Cintra. Senior TxDOT officials also have backed Cintra's bid.

Mr. Williamson and his fellow commissioners often depend on TxDOT's technical experts to guide their decisions. But he said the department's recommendation for Cintra won't carry any special weight with the five commissioners, all of whom were appointed by Mr. Perry. The governor has not given him instructions on how to vote, he said.

"Rick Perry never indicates preferences for these things," he said. "Unlike some elected officials, Rick Perry understands that elected officials should not interfere with the contract process."

Lawmakers watching

Some lawmakers wonder if Mr. Perry's office and TxDOT have shown favoritism toward Cintra.

One of Mr. Perry's former aides, lobbyist Dan Shelley, worked for Cintra as a consultant before hiring on as the governor's legislative liaison. When he left state government, Mr. Shelley resumed his lobbying practice and joining Cintra as a paid adviser.

Some legislators also worry that TxDOT's continued endorsement of Cintra foreshadows a deck stacked against NTTA.

"I don't believe that from the beginning of this process NTTA has been treated fairly, evenly or given the same courtesies and same opportunities that the private sector has enjoyed," said state Sen. Florence Shapiro, R-Plano, a Senate transportation committee member.

Other lawmakers were more direct. They said TxDOT will be inviting heavier legislative oversight if the commission awards the Highway 121 contract to Cintra – especially when it comes to the kind of public-private partnerships that Mr. Williamson and Mr. Perry champion so aggressively.

"I am not sure we were as provident as we should have been four years ago – and again two years ago –when we gave TxDOT a significant amount of authority to establish public-private partnerships," said Sen. Jeff Wentworth, R-San Antonio. "We attempted in the most recent session to rein that in, and depending on what takes place in the next 18 months before we meet again, we may rein them in even more."

That legislation paved the way for NTTA to enter a late bid for the 121 project even though TxDOT had already tentatively awarded the deal to Cintra. Yesterday, Mr. Williamson said lawmakers inserted themselves into the Highway 121 process before they knew all the details.

"I believe that an abundance of elected officials, upon reflection, are going to wonder why they interfered in a contracting process that was already well on its way to conclusion," he said.

But Ms. Shapiro said she and other lawmakers have added leverage over TxDOT between now and the next session. Legislators examine state agencies every 12 years – it's called the sunset review process – with an eye toward improving state government. Sometimes, they eliminate a board or agency outright. TxDOT is due for a checkup between now and 2009.

Loyalty to Cintra?

Sen. Robert Nichols, R-Jacksonville, is a former member of the transportation commission. He praised Cintra for providing competition that caused NTTA to increase the amount it's willing to pay for the 121 contract. Still, he said he doesn't understand why TxDOT has been so committed to Cintra's bid.

"There is just an incredible loyalty to a private company over the local interest and the desires of the community," Mr. Nichols said.

Others say there is more at stake in today's vote than just what's good for North Texas. The state's reputation for fair dealing is also on the line, Mr. Krusee said, because of NTTA's late entry in the bidding process.

"The loss of credibility for the state – stemming from the holding of bids, declaring a winner and then withdrawing a bid after that process is over – I think it will be a factor in their decision," he said.

Amadeo Saenz Jr., the top engineer at TxDOT, said the state's reputation for integrity and fairness in the bidding process is important because billions in private investment will be needed to pay for all the new road projects Texas needs.

As rich as the Highway 121 deal is likely to be, the amount of money companies like Cintra could make from roads yet to be built dwarfs it by comparison.

Some estimates say the state has a $40 billion gap between the cost of the roads it needs to build and the amount of revenue it can expect from taxes and publicly financed toll roads like the NTTA's Dallas North Tollway.

The first phase of the Trans-Texas Corridor is a case in point. The corridor is Mr. Perry's controversial, if hugely ambitious, plan to transform the way people and goods move between South Texas and North Texas. It could take 50 years to build and might cost as much as $175 billion.

For the past two and a half years, Cintra has been under contract with TxDOT to help plan the corridor. The company forecasts that toll receipts from the Interstate 35 segment of the Trans-Texas Corridor would be rich enough to allow private investors to spend $7 billion on construction and still pay the state $1.9 billion upfront.

That connection may help explain why TxDOT has been so tireless in its support for Cintra's bid on Highway 121, some lawmakers and others said.

"I see a connection, in that in giving a very lucrative project to a private entity company, you will encourage more companies to come and invest," said Mr. Nichols. "But you still have to decide: Would you rather your toll roads be locally controlled or be sold to the highest bidder."

David Stall, who helps run a Web site that opposes the corridor, said he expects the commission to buck local preferences and award the Highway 121 contract to Cintra – in part because of its work on the Trans-Texas Corridor.

"Highway 121 isn't an integral portion of the corridor from a transportation perspective," said Mr. Stall, a frequent critic of Mr. Williamson, adding that the 121 deal "really smacks of good-ole-boyism. TxDOT and Cintra have worked together so long that this is a relationship-driven decision, not a policy-driven one."

Not many lawmakers share his prediction that Cintra will get the contract. But several, including Ms. Shapiro, say TxDOT's unwavering support for Cintra has unsettled them. They also say TxDOT's financial analysis showing Cintra's bid as superior is not persuasive.

"A wise man many years ago told me you can make a number say anything you want to," Ms. Shapiro said. "And he who has the numbers has the power."

© 2007 The Dallas Morning News Co

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