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Spinning its wheels? TxDOT to outsource maintenance when first try a failure

Category: Public Private Partnerships

Link to article here.

Only TxDOT would continue a failed program and spin it as a success.


TxDOT says outsourcing highway maintenance could save millions, but previous pilot project fell flat

By Ben Wear

Austin American Statesman

Published: 7:40 p.m. Monday, Sept. 3, 2012

Based on assumed savings from a five-year pilot project that began this summer, the Texas Department of Transportation is considering outsourcing all routine maintenance on long stretches of Texas interstate highways, including much of Interstate 35. The agency has touted the potential savings as high as $120 million over five years.

TxDOT has presented the pilot as a fresh concept and a success even in its infancy, but the agency has experimented as early as 1999 with having private companies take over all maintenance of parts of I-35 and Interstate 20. And the results of that program were "extremely disappointing," according to legislative testimony by TxDOT's former executive director.

Amadeo Saenz, who retired last year as TxDOT chief, told the Legislature in 2005 that the pavement condition of 120 miles of I-35 and 60 miles of I-20 deteriorated during a more than four-year period of the turnkey maintenance contract. The contractor often failed to perform scheduled work, and Saenz said oversight of the Virginia company took more management time and effort than was needed previously when TxDOT employees were doing the work.

This time, under new TxDOT chief Phil Wilson, a former aide to Gov. Rick Perry, the agency says that the 100-mile-long, $26 million pilot program on Interstate 45 through Galveston, Harris and Montgomery counties — which includes routine repaving and sealing of cracks, mowing, litter pickup and sign repair — will save an estimated $2 million a year compared to what it would cost the agency to do the same work with TxDOT employees.

Over five years, the contract with Transfield Services, an Australian company, will save $10 million, TxDOT said in an Aug. 27 news release. That amounts to a 28 percent savings, the agency said.

TxDOT spokeswoman Kelli Reyna said that savings will result, to a great degree, from no longer needing to pay as much overtime to TxDOT's maintenance corps, which has decreased from 5,109 workers to 4,533 over the past five years, an 11 percent drop. And Reyna said using private workers to do all work on some roads would, in turn, free up TxDOT workers to perform upkeep on other highways.

Reyna said the agency doesn't yet know the effect of the pilot program on pavement quality.

"The project is just now under way and still in progress, so it's too soon to have these numbers," Reyna said.

Nonetheless, TxDOT is taking a hard look at expanding the pilot. The agency said it will issue a "request for information" to the private sector, gauging companies' interest in taking over all maintenance on I-35 from San Antonio to Dallas, and on I-45 from Dallas to Houston. That would be the first of three steps in the hiring of companies to do the work, a process likely to take months, "should we conclude this is something we should pursue," Reyna said.

Reyna said the Waco and Austin metropolitan areas might be excluded from the contract.

Contractors already handle about half of the agency's routine maintenance, which totals $1.2 billion a year, including minor pavement repair and all mowing and litter pickup on the sections of I-35 and I-45 that might be covered in this potential turnkey contract, Reyna said.

But the pilot project covers road work beyond what is currently outsourced.

"This is about delivering greater value and saving money," TxDOT communications director Bob Kaufman said. "The quality has to be as good as, if not better than, what is currently taking place."