Thursday, June 11, 2009

Wheels flying off N. Texas Spanish toll road deals

Attorney General says North Texas' private toll roads in doubt

Jun 11, 2009

Michael Lindenberger
The Dallas Morning News
Copyright 2009

Update: We will soon have a story on line but for now, here is TxDOT spokesman Christopher Lippincott's response:

Negotiations on both contracts are ongoing. We will not have any comment on the continuing negotiations. There is no reason to believe that the failure of HB 300 to pass during the regular session will stop either deal. We are confident that discussions will continue to be productive and everyone would keep moving in the right direction on both projects. It is important to remember that these are a new type of agreement for us, and everyone wants to make sure we get the deals done properly. One day, signing a CDA will be about as complicated as getting a contract completed for a resurfacing job for a RM road. That day just isn't here yet.

and, a follow up:

We are working to address their concerns with the contract, and we are confident that we can achieve a consensus on the unresolved matters. We are doing everything we can to address their concerns, and we are confident that this project will move forward.

Update: 5:00 p.m.Attorney General Greg Abbott called to say the North Tarrant Express private toll road deal could be in jeopardy, and the issues are identical to ones that are all but certain to entangle the LBJ Freeway reconstruction project in Dallas.

The issue: He says the Texas Constitution prevents any agency like TxDOT from committing funds from a future legislative session. The NTE toll road, which will be built by Spanish firm Cintra, will cost billions of dollars. TxDOT's portion is some $570 million to be paid over time, as stipulated in its contract with Cintra. That violates the constitution, Abbott said.

The fix? He said TxDOT merely needs to adjust the language in its contract to note that any future funds are subject to the discretion of the Legislature -- a clause that could give Cintra pause. Abbott said other fixes are also available, such as using a special fund or bonds to pay for the money that will be TxDOT contribution's to the project. But so far, he said, TxDOT has for weeks refused to compromise. The negotiations have already extended several weeks beyond their deadline, and TxDOT could be charged penalties if the delays interfere with the ultimate and design deadlines.

State law requires any long-term toll contract to be reviewed for its "legal sufficiency" by the Attorney General's office. Few thought back in January that such a step would be anything but pro forma. Abbott said the contract for the LBJ Freeway project, which would also be built by Cintra, has not yet been submitted for review, but it too calls for TxDOT to spend hundreds of millions toward a project that ultimately will be built and maintained by Cintra.

"To be honest, the review is rather perfunctory," Abbott said. "I have been crystal clear with TxDOT. They have simply refused to comply with the Constitution. Their interpretation of our legal analysis is itself perfunctory. The sticking point is simply this: The Texas Constitution says that one Legislature cannot financially bind a future Legislature. That's not my decision, that is what the Texas Constitution dictates. TxDOT clearly understands that.

Update: 6:08 p.m.: Where it stands is that we have made clear to TxDOT for weeks exactly what they need to do, and they have so far chosen not to comply with the Constitution. I am suggesting that they have contract that complies with the Constitution or they do not have a done deal."

"The ball," he added, "is entirely in their court."

I have asked TxDOT for comment, and will update when I hear from them.

We reported the big news earlier this year that the Texas Transportation Commission awarded a massive contract to Cintra to build the North Tarrant Express toll road.

We're hearing today that that project has not yet won approval by the Attorney General, which by law must review any so-called comprehensive development agreement, or long-term contract with a private firm to build a toll road. The project was approved in January, and Regional Transportation Council bristled Thursday at what they see as a delay.

"In light of the attention that CDAs have in the state, I believe the AG is doing due diligence," said TxDOT's Fort Worth District Engineer Maribel P. Chavez "I don't know if it is appropriate to characterize it as being 'held up.' But the Attorney General is required to do a thorough review and thorough analysis. It won't be concluded until we address whatever questions they have."

CDAs in general are under increasing scrutiny in Texas and elsewhere, and the same review will be given to the LBJ reconstruction project in Dallas.

© 2009 The Dallas Morning News:

To search TTC News Archives click HERE

To view the Trans-Texas Corridor Blog click HERE