Thursday, August 23, 2007

FHWA bigwig, who oversaw Boston's 'Big Dig' is still miffed about Highway 121 toll road deal

Texas formally kills Cintra pact for Highway 121

August 23, 2007

By Joan Gralla
Copyright 2007

NEW YORK - Texas on Thursday said it ended its pact with Spanish toll road company Cintra to overhaul a big Dallas-Fort Worth highway.

Cintra was initially awarded the deal but voters and lawmakers argued its pact overly benefited the company. Texas then let the North Texas Tollway Authority compete, and it won the project by offering $500 million more than Cintra.

The authority's executive director on Thursday signed the $3.3 billion pact for State Highway 121 with the state transportation department, Authority Spokesman Sam Lopez said.

Texas waived an Aug. 29 deadline for the state authority that won the project because environmental hurdles remain. The authority now hopes the state will sign it after it gets the federal environmental approvals, possibly in September.

The bidding war over expanding the 24-mile-long highway was scrutinized by other states, which also are weighing privatizing roads. Texas' experience also is noteworthy because the federal government bashed its bidding process.

Texas' transportation commissioners fear that the tollway authority will shift the project's cost back to the drivers from a private company, a Texas transportation spokesman said.

But the commissioners felt the deal had to go ahead under a new state law, he added. Legislators this spring enacted tougher controls, spurred by outrage over Cintra's award.

The commissioners, who run the state's transportation agency, on Thursday said it was "in the best interest of the state to terminate comprehensive development agreement negotiations with Cintra."

The statement on the Web site,, added the request for proposals to develop the road were canceled.

"We believe that the private sector continues to play a critical role," the transportation agency spokesman said. He added the agency believes that the steps it took fixed the flaws the federal government saw in its bidding process.

But a federal highway agency spokesman could not immediately say whether the problems were resolved.

"The procurement violations are substantial and run counter to the fundamental requirement for a fair and open competition," J. Richard Capka , a Washington, D.C.-based federal highway administrator, wrote Texas on Aug. 16.

Specifically, he criticized the decision to let another bidder compete after details about Cintra's offer were disclosed. A public agency cannot bid "directly against a private entity" under the federal agency's rules, he added.

Capka said Texas will not have to repay money already spent on State Highway 121. But he also said that if the violations were not fixed, the local authority might not, for example, be able to pay for the project with private activity bonds.

© 2007 Reuters:

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