Friday, January 30, 2009

Spanish company Cintra lands first tax-subsidized freeway privatization deal in Dallas

I-35W advocates express backing, hope for North Tarrant Express


Fort Worth Star-Telegram
Copyright 2009

AUSTIN — Beginning in 2015, drivers could pay as much as $6.50 each way to use four toll lanes that a private developer proposes to open on 13 miles of Loop 820 and Airport Freeway in Northeast Tarrant County.

Yet on adjacent Interstate 35W, which many Fort Worth officials would argue is just as gridlocked and deserving of new lanes, there would likely be no improvements until 2018 or later, according to the $2 billion private contract with Spanish firm Cintra that the Texas Transportation Commission approved Thursday.

It’s a problem that advocates of highway improvements in Tarrant County can’t escape.

Faced with the alternative — no new construction at all in the county — proponents of I -35W expansion stood in unison Thursday to support the so-called North Tarrant Express project. Their argument, in part, is that the state’s unprecedented swim into the waters of highway privatization, using a combination of public and private dollars, will be good for the entire western subregion of Dallas-Fort Worth.

"We’re pushing forward with this, and we support North Tarrant Express," Fort Worth Councilman Jungus Jordan said, as he thanked state officials for their time invested in the project. "And now, we want to know what you’re going to do with I-35W."

Their support is something of a leap of faith that Cintra will not only build the variably priced toll lanes within six years, but will also follow through with plans to rebuild I-35W and add lanes during the second decade of the 20-year plan.

Huge project

Overall, the North Tarrant Express project is a $5 billion effort that will likely be built in phases through 2030. It involves rebuilding aging free lanes on Loop 820, Texas 121/183, widely known as Airport Freeway, and eventually I-35W.

The plan also calls for adding capacity by building toll lanes, mostly in the highway medians.

While free lanes will still be available, trends indicate that they will become far more congested as North Texas continues to grow.

Eventually, toll lanes would be built on I-35W, too.

In the end, Cintra’s promise to take over North Tarrant Express and immediately build the estimated $2 billion first phase was too good to turn down, supporters said.

"We’re getting a $2 billion project for a $600 million investment," Transportation Commission Chairwoman Deirdre Delisi said.

Cintra’s proposal was made public shortly after commissioners unanimously took action Thursday, ending a two-year competition that originally involved four bidders. During that time, North Texas officials who wanted a glimpse of the bids had to sign confidentiality agreements.

A competing plan by another Spanish company, OHL Infrastructure, was disqualified because a required security — a type of bond or deposit — wasn’t properly posted, officials said.

But in any case, Transportation Department officials said, Cintra would have beaten OHL head to head. Cintra’s proposal included construction of 169 lane miles, compared with OHL’s offer to build 64 lane miles.
Details of the deal
In addition to $570 million in gas-tax revenue from the Transportation Department, Cintra proposes to contribute $300 million in equity and $1.1 billion in debt, including federal and bank loans and private activity bonds.
Cintra’s offer was conditionally approved Thursday, pending approval from the Federal Highway Administration and the attorney general’s office. A review is expected to take about 60 days.

The tolls will vary, from $1.20 to $6.50 each way, Cintra U.S. President Jose Lopez said. The tolls will rise and fall through the day, with the goal of keeping toll-lane traffic moving at a minimum 50 mph.

Cintra’s proposal charges less than the 75 cents a mile allowed under a managed-lanes plan approved two years ago by the Regional Transportation Council, the Metroplex’s official planning body, Lopez said.

Cintra would build the first phase of North Tarrant Express and publish a master plan for the rest of the 20-year project. New free lanes would be built at state expense when certain congestion levels are reached, no later than 2030, according to the agreement.

I-35W complications

Although anyone who drives on I-35W knows it’s a no-brainer candidate for a makeover, construction is likely still years away, said Michael Morris, transportation director for the North Central Texas Council of Governments.

Eventually, Morris said, planners hope that the I-35W main lanes can be rebuilt from downtown Fort Worth to Alliance Airport. However, a federally required environmental study isn’t complete, he said.

Even so, members of the Regional Transportation Council will begin searching for public funds to divert to the I-35W project, especially now that private dollars are being injected into the North Tarrant Express project.

Also, the North Texas Tollway Authority is working on a plan to build parts of Southwest Parkway, a proposed toll road in southwest Fort Worth, entirely with debt issued by the Plano-based North Texas Tollway Authority. Such a move, if it is deemed feasible, would free up tens of millions of gas-tax dollars for I-35W.

And, the North Tarrant Express project will have some benefit to I-35W traffic, Tarrant County Judge Glen Whitley noted. Direct connections will be built from I-35W to the North Tarrant Express toll lanes, which will likely free up space on I-35W’s main lanes.

By including I-35W in the North Tarrant Express master plan, Whitley said, there’s a better chance that it will become more of a regional priority as planners realize the potential for toll revenue from I-35W, Whitley said.

GORDON DICKSON, 817-685-3816

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