Rendell lobbies for tolls, borrowing, and higher taxes for roads

Link to article here.

For years we've contended that Rick Perry is the same ol' Democrat as he was in yesteryear before he switched parties and became a Republican (when it was politically expedient)...this ought to prove it. Who did Perry tap to carry his water for higher taxes and tolls, particularly public private partnerships (erroneously called private toll roads) where the published toll rates are 75 cents PER MILE to use our public roads? An outgoing Democrat Governor of Pennsylvania, Ed Rendell. When both parties are calling for the same thing, is there really any difference between them anymore? Perry touts his conservative credentials as he sets himself up for a presidential run in 2012, but his record clearly shows he can tax, borrow, and spend just as voraciously as the Democrats he's so fond of maligning. There's a word for that -- HYPOCRITE!

Pennsylvania Democrat urges Texans to tax, toll, borrow for roads

12:00 AM CST on Wednesday, January 5, 2011

By MICHAEL A. LINDENBERGER / The Dallas Morning News
This email address is being protected from spambots. You need JavaScript enabled to view it.

AUSTIN – Texas transportation leaders welcomed one of America's most outspoken Democrats on Tuesday to a stage often used in the past by Gov. Rick Perry, and Gov. Ed Rendell of Pennsylvania spent nearly every minute of his fiery speech calling for more taxes, more tolls and more borrowing to salvage what he called the country's fast-deteriorating highways and bridges.

"This is a seminal test for what kind of country we want to be," said Rendell, whose second and final term in the Keystone State winds down this month. "Do we want to look inward and be selfish and worry only about the moment? Or do we want to be the America we always have been, the America that didn't ever see a challenge it couldn't overcome and, yes, the America that plays football in the snow."

When the National Football League postponed an Eagles-Vikings football game scheduled for last Sunday because of weather, Rendell called it proof that America was turning into "a nation of wusses" – a theme he continued Tuesday as he spoke to an army of engineers, consultants, builders, bankers and local elected officials who gather each year for the Texas Department of Transportation's policy forum.

Perry, who has appointed all five commissioners who oversee the Texas Department of Transportation, has often spoken at the forum to urge lawmakers to fund transportation and endorse the privatization of toll roads.

This year, he left the speaking to Rendell, whose political philosophy couldn't be more different from the Texas governor's. But the two governors agree on one point that has long been of paramount importance to Perry: the need for more privately financed toll roads.

"You've used private toll agreements to build roads more effectively than any state in America," Rendell said approvingly, perhaps because lawmakers in his state quashed a deal he brokered to sell tolling rights to the Pennsylvania Turnpike for $16 billion.

In Texas, at least three major privately financed toll projects are under way, including two in the Dallas area, and supporters of the concept will be pushing the Legislature to expand their use once lawmakers reconvene later this month.

Perry to push for more private toll deals

Link to article here.

It shouldn't surprise any Texans that Rick Perry, the counterfeit "conservative," is calling for higher road taxes through privatized toll roads. It's been the centerpiece of his transportation policy since he became Governor and Texans have twice defeated it...for good reason! The published toll rate to use these "Lexus lanes" is 75 cents PER MILE or over $3,000 a year in new taxes just to get to work! Perry and his pro-tax minions try to claim tolls are a user fee, not a tax ("those who use the road pay for the road" mantra), but that's an out and out LIE. All three of the grandfathered public private partnership (PPP) toll roads in Texas required a HEAP of public subsidies that all Texans are on the hook for -- more than $1 billion in our hard-earned tax dollars yet you can't use the road unless you pay a DOUBLE TAX toll! Perry, "Mr. Conservative," has launched Texas headlong into more than $20 billion in road debt for loser toll projects that won't be in the black for a generation! Texans can't afford Perry's unsustainable tax, borrow, and spend transportation policies, and anyone who claims to be a conservative cannot, in good conscience, vote to re-authorize these oppressive PPP toll roads.

Private toll roads get new push in Texas

06:44 AM CST on Tuesday, January 4, 2011

By MICHAEL A. LINDENBERGER / The Dallas Morning News
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AUSTIN – It's been easy to overlook in the Dallas area, where two of the largest privately financed toll projects in the country are under way, but Texas' authority to build private toll roads technically has been extinct since summer 2009.

Over a long July Fourth weekend two years ago, with time running out on a chaotic special session, the Legislature refused to extend authority for the Texas Department of Transportation to contract with private toll firms beyond Aug. 31, 2009.

Since then, the privatization of toll roads, long a centerpiece of Gov. Rick Perry's ambitious and controversial transportation agenda, has been on hold in Texas, even as some grandfathered projects like Dallas' LBJ Freeway and the North Tarrant Express continued.

Now the issue is set to be debated again as lawmakers return to Austin, ready to confront rising construction needs even as they grapple with commitments to keep taxes low and a frighteningly large budget shortfall.
Immediately after the last session adjourned, Perry's chief transportation aide promised a hard push to restore the authority to enter into so-called comprehensive development agreements in 2011.

"Absolutely, the governor is going to keep pushing, pushing for putting this tool back in the box," then-deputy chief of staff Kris Heckmann said.

And in an interview with The Dallas Morning News just before his re-election in November, Perry said he would ask lawmakers to renew authority for the state to partner with private toll firms.

"Now is not the time to leave any tool out of the box," he said, noting the revenue shortfall that the Legislature will confront and the state's growing list of unfunded highway needs.


Running out of money

Texas Transportation Commission chairwoman Deirdre Delisi has warned repeatedly that without new revenue, Texas will run out of money for new highway projects by 2012.

North Texas elected officials will be pushing, too. They say they have already begun to drastically scale back the scope of transportation projects planned before 2035 and will need all the money they can get – whether from public or private sources.

Toward that end, the Regional Transportation Council's legislative agenda will include efforts to restore the authority to enter into comprehensive development agreements in the state, spokeswoman Amanda Wilson said.

But Michael Morris , the council's planning chief, said this push for private toll road authority will look different than the expansive authority previous bills have given the Transportation Department, which is run by five commissioners appointed by Perry.

North Texas leaders will be asking lawmakers to approve a narrow bill that gives the state authority to contract with private developers for a handful of roads only, Morris said.

"Instead of making this a big major policy issue statewide, our position is, why not focus strategically on specific projects that could be advanced" by privatization, he said. "In our region, we won't have more than three. And we're calling for safeguards, too."

Those safeguards would include the need for any private toll road to have the support of not just state officials but also county officials and the local planning council.

"That way, we do this more strategically and give ourselves time to learn more about the risks and benefits" of the agreements, Morris said.

The three North Texas projects Morris and other local officials hope can be built with private funds are:

•The expansion of Interstate 35E between LBJ Freeway and Denton County.

•An eastern expansion of the already-underway North Tarrant Express, and a portion of Interstate 35W to its north

•Widening and the addition of toll lanes on State Highway 183 in Dallas County, which would provide a Dallas County link to the North Tarrant Express

Each of those roads, like the reconstruction of LBJ Freeway, would involve heavy subsidies from taxpayers and, as a result, provide new free lanes as well as high-priced toll lanes that serve as optional express routes.

State transportation officials have already said the I-35E project alone will cost nearly $5 billion, almost 10 times what they say Texas has available to spend on it without private partners.

The privatization push will likely have allies in the state Senate, where leaders vowed to support renewing the authority for private toll roads in 2011 even as the time ran out of the 2009 session.

Lt. Gov. David Dewhurst and others at the time called the lack of action to extend the authority in 2009 nothing more than a temporary timeout.


Everyone not on board

Still, not everyone in Texas believes toll roads are a good idea, public or private, said state Rep. Joe Pickett, the El Paso Democrat who is the House transportation committee chairman. Toll roads have been too eagerly embraced by officials and planners in North Texas, he said.

"There isn't the appetite for toll roads in El Paso," he said. "And San Antonio is the second biggest city in Texas, and they still don't have a toll road there."

What's more, Pickett said the huge influx of new members in the House has made predictions of any kind foolhardy. Republicans now control at least 101 of the 150 seats, and it's not yet clear who will be speaker or will lead committees in the new session, he said.

Pickett said he believes House Speaker Joe Straus of San Antonio has the votes to remain in charge, but he said it's not certain.

Still, Pickett said with other sources of funding so scarce, it's likely he will support legislation that allows the state to pursue private investors for specific projects, including several in North Texas.

"It should be a project-specific bill," he said. "It should include an affirmative list of those who wanted in and wanted out."

Pickett said he'd favor a bill that would give the Transportation Department four years to find private developers for a list of badly needed toll roads, after which the authority for private tolls in Texas would expire.

But another area of uncertainty is just how eager the private investors that were so readily available for toll projects a few years ago will be to return to Texas.

With so many changes in the economy, with ratings agencies, and credit markets, the interest may be less than what it was two years ago, some experts say.

Former U.S. Transportation Secretary James Burnley said in a recent interview that private investors may be more cautious than they were when Perry first pushed Texas to privatize toll roads.

"There will be a lot more interest in attracting private capital than there has been with Democrats in power in Congress," said Burnley, who served in the 1980s.

"But from the private sector's point of view, there are a great many issues that have to be worked through. You can't just blithely wave a magic wand and expect the investment capital to flow."

With a new legislative session looming, the Texas Department of Transportation is taking steps this week to bolster its efforts at the Capitol:

•It is hosting an annual transportation policy forum in Austin and has invited Pennsylvania Gov. Ed Rendell to deliver a keynote speech today.

•Rendell, a Democrat, is expected to talk about the need for more highway funding and likely will tout his support for privatization of some toll roads.

•The department's five commissioners will meet in a special session Wednesday to hear proposals on reorganizing the 12,000-employee agency – a move designed in part to get ahead of legislative critics.

Trans Texas Corridor TTC-69 resurrected

Link to article here.


'Nightmare' federal plan resurrected from crypt

Controversial project now promoted under new name

Posted: November 22, 2010
9:15 pm Eastern

By Jerome R. Corsi
© 2010 WorldNetDaily

 It was Amadeo Saenz, the executive director of the Texas Department of Transportation, who not quite two years ago, proclaimed to the Dallas News, "Make no mistake: The Trans-Texas Corridor, as we have known it, no longer exists."

But it's been exhumed, now appearing on numerous government and industry alliance websites as the new and separate projects that are known as the I-35 Corridor and the I-69 Corridor.

Moreover, the Texas agency appears to have made a strategic decision to begin first with the I-69 Corridor portion that had received less attention during the battle that raged over the mega-highway project called the Trans-Texas Corridor from 2006 to 2008 when George W. Bush was president.

That the U.S. Department of Transportation under the Obama administration continues to harbor the dream of Mexico-to-Canada NAFTA superhighways is made clear by the Federal Highway Administration website that proclaims the "Corridor: Interstate 69 (I-69) – Texas to Michigan" is to be fully operational under the following project description: "The 2,680-mile international and interstate trade corridor extends from Mexico to Canada."

The DOT even proclaims the I-69 Corridor under the original understanding of the TTC as an inter-modal automobile-truck-railroad corridor:

"This application [I-69 Corridor] includes freight and passenger movement through a portion of the country that is experiencing both demographic and freight movement growth. The current infrastructure from Texas to Michigan already handles a large flow of goods and this corridor has the potential to shift cargo patterns to relieve existing and projected congestion along existing routes (e.g., I-40, I-65, I-81). This corridor has already been identified by Congress as a high priority corridor, is one of the farthest along in clearly defining its project list, and has the political support of all the states involved."
The Federal Highway Administration further says many of the states have done developmental work and there are 32 separate segments, "all of which are in varying stages of development from acquisition of right-of-way to environmental review and design."

A screen capture of the Federal Highway Administration discussion of the I-69 Corridor
The U.S. Department of Transportation's main website also affirms plans to proceed with the I-69 Corridor, describing under the headline of "Interstate 69 (I-69) Corridor – Texas," that:
"The Trans-Texas Corridor (TTC) is a proposed multi-use, statewide network of transportation routes that will incorporate both existing and new highways, railways, and utility right-of-ways. The Interstate 69 corridor is one of the first elements of the TTC to be developed. The proposed I-69/TTC corridor extends from Texarkana/Shreveport to Mexico, a distance of approximately 650 miles."

Here is a screen capture of the relevant U.S. DOT website
A notice in the Fort Bend Star for a planned I-69 Corridor presentation makes clear that the dream of a Mexico-to-Canada NAFTA superhighway being built through Texas remains live and well.

A report discussing a planned presentation by Fort Bend County Judge Robert Herbert scheduled for the December 15 meeting of the Infrastructure Department of the Central Fort Bend Chamber Alliance notes that, "Once constructed, under present plans, the I-69 Corridor will create a transportation artery from Canada to Mexico crossing through southern Texas and eastern Michigan."


A screen capture of the Ford Bend announcement
The Fort Bend Star makes clear that the I-69 Corridor in its full Mexico-to-Canada dimensions has been divided into 32 segments of Independent Utilities, of which 16 are in Texas.

Still, wanting to distance the I-69 Corridor from the TTC designation, the article notes, "Now separated from the controversial 'Trans Texas Corridor' that kept it in Limbo for a few years, I-69 seems imminent for Texas."

The TxDOT website provides further confirmation that rather than end altogether the TTC agenda, the agency simply has rebranded the project to include the I-35 Corridor and the I-69 Corridor, with the tactic of further dividing each project into segments, organized around multiple SIUs, with the plan to form Citizens' Advisory Committees for each corridor segment.

A map on the TxDOT website illustrates how the I-69 segments operate geographically to divide Texas into discrete SIUs from the border with Mexico, running along the Gulf coast, to the northern tip of the Texas border where Oklahoma, Arkansas and Louisiana converge:

At the same time, TxDOT appears to have removed the former TTC website,, a step evidently taken by TxDOT to re-enforce the impression the TTC project is dead.

A website created by a trade group organized under the name "Alliance for I-69 Texas" provides a map that details the Texas cities are involved in the I-69 Corridor project:

The Alliance for I-69 Texas website makes clear that I-69 is a combination of two federally designated High Priority Corridors: (a) Corridor 18, extending from Michigan and Illinois, south through Indiana, Kentucky, Tennessee, Mississippi, Arkansas, Louisiana, terminating at the end of U.S. 77 and U.S. 281 in the Rio Grande Valley of Texas, and (b) Corridor 20, designated as U.S. 59, from Texarkana to Laredo.

The website further points out that the I-69 border crossing points from Laredo to Brownsville, Texas, handle 49 percent of the total U.S. truck-borne trade with Mexico.

An I-69 project blog describes the extensive state-by-state progress being made constructing the I-69 corridor.

In January 2009, WND’s Red Alert newsletter warned that Texas Gov. Rick Perry was attempting to engage in a public relations effort to distance TxDOT from the TTC project, while continuing to include on the TxDOT website detailed discussions of TTC-35 and I-69/TTC projects.

As WND has been reporting since 2006, the original Trans-Texas Corridor project was launched by TxDOT as a 4,000-mile network of four NAFTA superhighway consisting of automobile-truck-railroad corridors that TxDOT planned to build over a 50-year period.

The original TTC designed called for TTC-35 to be built as a 1,200-foot-wide corridor of new highways, designed to run parallel to the existing I-35 and to include separate north-south lanes for automobiles, trucks and trains, with included pipelines for oil, water and natural gas.

Collin County wants outer loop financed by private, foreign toll operator

Link to article here.

Could Spanish get deal to toll Collin County highway?
Fri, Oct 15, 2010 | Dallas Morning News
Rodger Jones/Editorial Writer 

Anything is possible. Collin County is advertising for companies interested in developing and tolling a portion of the Outer Loop project across the county's northern tier. It would be a CDA (comprehensive development agreement), the likes of which the Spanish company Cintra almost had to build and toll SH 121 in Collin and Denton counties.

Here's the irony: Some of the roughest criticism of the Cintra deal three years ago came from Collin County. The argument was that the region should "keep the toll revenue here" by steering the deal to NTTA and not "let it go to Spain" under a long-term tolling deal. NTTA won, Spanish lost. It was a rough fight that spilled into the Legislature in Austin.

Now, acting as the Collin County Toll Road Authority, county commissioners have out a request for qualifications on the Outer Loop project. It was approved in August, and preliminary expressions of interest are due today.

It would be a surprise if any big international outfit got in on the loop at this stage of the game. The deal initially would call for building a three-lane road stretching 14 miles west of US 75. That's a lot of work to draw toll revenue for only three lanes.

But maybe there's a game-changer in dishing off development rights of some kind.

Today, the political spin is not keeping the money from Spain; it's keeping the money from getting away to Austin or to NTTA's Southwest Parkway project in Tarrant County.

What's worse -- letting money get away to Fort Worth or to foreigners? Or is that the same thing in this side of North Texas?

Another irony: Cintra and a host of other investors make up groups now developing the LBJ project in Dallas County and the North Tarrant Express project to the west. (See the LBJ Express page on Facebook.)

Stay tuned. The Outer Loop adventure sets Collin County on a collision course with NTTA's well-connected supporters in a battle in the Legislature next year over who has rights to any new toll road.

Infrastructure Bank another trilateral rip-off?

Link to article here.

National Infrastructure Bank: Another Trilateral Ripoff?
By Patrick Wood
September 9, 2010

Obama’s slick 2010 Labor Day speech that promised an additional Federal stimulus for a sick economy, was a ringer. Here's why -- buried in the $50 bil­lion infra­struc­ture stimulus promise is the fol­lowing statement:

“It sets up an Infra­struc­ture Bank to leverage fed­eral dol­lars and focus on the smartest invest­ments.”

Infrastructure Bank? Smartest investments?

Obama would have you think that this was his brainchild, but it is not. It will, however, effec­tively cen­tralize another key area of our economy, namely infra­struc­ture, into a gov­ern­ment run enter­prise that mostly ben­efits the pri­vate capital of the global elite, and in particular, members of the Trilateral Commission.

For a historical perspective, we need to look back to August 2007 during the Bush administration when S.1926 was intro­duced (National Infra­struc­ture Bank Act of 2007) by Sen. Chris Dodd (D-CT) and Chuck Hagel (R-NE).

The failed bill pro­vided for an inde­pen­dent gov­ern­ment entity (think FDIC, for instance) with a five-member board appointed by the Pres­i­dent and con­firmed by the Senate.

In 2009, the Obama Administration promoted similar legislation introduced into the House as H.R.2521 by Rep. Rosa DeLauro (D-CT)  to "facilitate efficient investments and financing of infrastructure projects and new job creation through the establishment of a National Infrastructure Development Bank, and for other purposes." [Emphasis added] The Administration was so certain that this would pass (it has not) that the 2010 budget included appropriations for a National Infrastructure Bank. (See Investing for Success, Brookings Institution, p.11)

Dodd him­self called S.1926 a “unique and pow­erful public-private part­ner­ship” that would offer a “fresh solu­tion to the chal­lenge of rebuilding the nation’s infra­struc­ture.” It was orig­i­nally to be funded by a $60 bil­lion bond issue which would be then lever­aged with pri­vate cap­ital. Obama’s new twist is to forget the bond and just give $50 bil­lion of tax­payer money directly to kick­-start the NIB.

A public-private partnership in this context is reminiscent of the World Bank's Public-Private Partnership in Infrastructure program (PPPI) whose objective "is to provide capacity building to help client governments create the proper environment to develop successful and sustainable PPPs, as well as to provide technical assistance to client countries in issues related to PPP program design, development, and implementation."

However, the World Bank explains their agenda more fully: "The program initially focuses on core infrastructure sectors– energy, water, transport, and telecommunications– and will progressively cover the main social sectors such as education, health and housing." This may suggest the intended meaning of "other purposes" mentioned above in H.R.2421.

Obama made no men­tion of NIB rev­enue bonds that would be used to pay back loans with by tolls, fees, etc. Most importantly, all infra­struc­ture spending/lending/appropriations would cir­cum­vent Con­gress for­ever more. In fact, the whole affair would be off-agency, meaning that the accounting for it would not show up in the national budget, but would potentially create a huge contingent liability for taxpayers down the road.

So, who were the policy wonks behind the NIB and S.1926 in 2007? (You know it wasn’t Dodd or Hagel!)

Fortunately, the press release on Dodd’s own web­site gives full credit:

“Last year, Sen­a­tors Dodd and Hagel signed on to a set of ‘Guiding Prin­ci­ples for Strength­ening America’s Infra­struc­ture’ devel­oped by the Center for Strategic and Inter­na­tional Studies (CSIS) Com­mis­sion on Public Infra­struc­ture,” said CSIS Pres­i­dent and CEO John Hamre.  “These prin­ci­ples were estab­lished to rec­om­mend changes to rebuild America’s decaying infra­struc­ture. CSIS is proud to have helped stim­u­late this impor­tant initiative.

Proud, indeed!

 This trai­torous and glob­alist think tank was orig­i­nally estab­lished by a founding member of the Tri­lat­eral Com­mis­sion, David Abshire. The current CSIS board is stacked with notorious Tri­lat­eral Com­mis­sion mem­bers like Zbig­niew Brzezinski, William Brock, Harold Brown, Richard Armitage, Carla Hills (archi­tect of NAFTA), Henry Kissinger, Joseph Nye, James Schlesinger and Brent Scow­croft.

This supposedly "bi-partisan" S.1926 was subsequently co-sponsored by twelve other senators including Hillary Clinton and, you guessed it, then-Senator Barrack Hussein Obama. This is one more piece of evi­dence that both Clinton and Obama operate solidly within the Tri­lat­eral orbit.

There is no argu­ment that the U.S. infra­struc­ture is a sham­bles. The Amer­ican Society of Civil Engi­neers esti­mates that it would take $1.6 tril­lion to fix it. The final tab will be much higher.

Of course, nei­ther the Feds nor the states have that kind of money but the Trilateral Commission has repeatedly proven its ability to sucker the tax­payers into paying for the Commission's global trade schemes… in this case, the final imple­men­ta­tion of NAFTA (North American Free Trade Agreement) trade routes throughout the U.S.

As reported in my detailed 2005 report, Toward a North American Union, NAFTA was created in the first place exclusively by members of the Trilateral Commission: George H.W. Bush, Carla Hills, Bill Clinton and Al Gore.

In recent years, NAFTA's infrastructure grid has been developed and plotted by an organization known as the North America Corridor Coalition, Inc. (NASCO).  

The recently updated NASCO web site shows a plethora of infrastructure plans that are tightly integrated with the implementation of NAFTA, which will undoubtedly be brought into play through the new National Infrastructure Bank.

Citizen revolts in Texas and Oklahoma in 2007-2008 were successful at smacking down the infamous Trans-Texas NAFTA Super-Corridor along I-35. This likely will not happen again.

Such pesky citizens and their state governments will be rendered irrelevant with decisions being made at the national level by a pri­vate board that will operate behind closed doors with little or no public input or recourse. The Brookings Institution explains it this way:

"Multi-jurisdictional projects are neglected in the current federal investment process in surface transportation, due to the insufficient institutional coordination among state and local governments that are the main decision makers in transportation. The NIB would provide a mechanism to catalyze local and state government cooperation and could result in higher rates of return compared to the localized infrastructure projects." (ibid, Brookings Institution)

Thus, where local and state government cooperation is lacking, the NIB would "catalyze" projects and make them happen in spite of such "insufficient institutional coordination".

In short, the NIB scheme sets up the American taxpayer for yet another pil­lage and plunder operation at the hands of the Tri­lat­eral Commission and their global elite cronies. When projects fail, taxpayers will pay for that as well.

S.1926 did not pass in 2008 and H.R. 2521 did not pass in 2009, but now that Obama has put it at the top of his agenda, it will likely pass before December 31, 2010. Or… Obama could simply create it by fiat through an Exec­u­tive Order!

How much more Trilateral abuse can the taxpayer's Treasury endure before the whole economic system in the U.S. just collapses from exhaustion? No one can say for sure, but it seems awfully close to this writer!

Unfortunately, mid-term elections will do absolutely nothing to reduce the influence of this nefarious and unelected group that quietly hijacked the U.S. Executive Branch as far back as 1976 with the election of James Earl Carter and Walter Mondale, both of whom were early members of the Trilateral Commission. That and every administration since then has been stocked full of Commission members, all eager to promote Trilateral-style globalism and demote U.S. sovereignty and prosperity.

Other resources:

CSIS Commission on Public Infrastructure

North America's Corridor Coalition, Inc.

World Bank: Public-Private Partnership in Infrastructure

National Infrastructure Bank Act of 2007 (S.1926

Investing for Success, Brookings Institution

Toward a North American Union, The August Review


Patrick Wood is the editor of The August Review, The August Forecast and is Executive Director of Idaho for Sovereignty and Free Enterprise (Idaho-SAFE).

Cintra secures financing for North Tarrant Express project

Link to article here.

Note the purpose of "congestion pricing" and "managed" toll lanes, is not to provide actual congestion relief, but rather is a means of "managing" traffic. Let's look at how well the government "managed" the mortgage crisis, Fannie Mae and Freddie Mac, and it ought to make us all think twice before we grant the control of our freedom to travel over to a private entity in a government-sanctioned monopoly! Also of significance is the amount of taxpayer subsidies that went into propping up this sweetheart deal for Cintra...over $1.6 billion of the project cost is being fronted by the taxpayers, compared to less than $500 million by the private entity. Hinkle makes a note of the State not being responsible for the $400 million in private activity bonds in the case of default; however, WE THE PEOPLE are still on the hook for that money on the
FEDERAL level! This is THIEVERY folks!

Team led by Cintra secures financing for North Tarrant Express toll project

    12:14 PM Thu, Dec 17, 2009 | Permalink | Yahoo! Buzz
Michael Lindenberger/Reporter      Bio |    E-mail  |  News tips

A team of private companies led by Spanish toll firm Cinta has secured its financing for the mega toll project known as the North Tarrant Express. The toll project will rebuild existing lanes along Interstate 820 and portions of SH 183, and add new managed lanes as well.(A map of the project is here.)

Construction should begin in late 2010, and it will be the first privately financed toll road in North Texas. A similar project, also led by Cintra, to rebuild LBJ Freeway with a mix of free and paid lanes is expected to begin construction shortly afterward.

The managed lanes on both projects will be costly during rush hours, with rates going up as the traffic on the adjacent free lanes gets heavier. It's an approach to "manage" traffic by continuing to jack up rates when demand is strong, and by doing so keeping traffic moving freely on the paid lanes no matter how slow it becomes on the free lanes.

The financing secured today will pay for completion of Segments 1 and 2, and will cover the segment of I-820 from the Interstate 35 interchange north of Fort Worth to near Northeast Mall by SH 183, said project spokesman Robert Hinkle. It will also add lanes along SH 183 from near the mall toward Irving.

The $2 billion project was approved in January in Austin with heavy encouragement from Tarrant County elected officials.

Tolls from the managed lanes will be used to repay the debts required to build the project and provide profit to Cintra and its partners, which include the Dallas Police and Fire Pension System.

Here's how the team found the money for the project:

Investors put $427 million cash into the project, including about $43 million from the Dallas fire and police pension fund, according to Hinkle.
The U.S. government approved a so-called TIFIA loan in the amount of $650 million -- a federally backed loan that provides generous interest rates and lenient repayment schedules.
$400 million in private activity bonds have been issued by the state on behalf of the project. Hinkle said the bonds are "unwrapped" -- meaning that they do not expose the state of Texas to risk default.
Taxpayers contributed $573 million in tax dollars to help finance the project.

Have PPPs reached boiling point?

Link to article here.

Remember that this article is written by those who profit off these sweetheart deals known as public private partnerships or PPPs. It underscores the mentality inside the industry and government - that government is broke and the private sector can fix it. While both may be true in some respects, the question we ask is at what cost to taxpayers/commuters? In Texas, we're already under water with debt and borrowing for toll roads that aren't paying for themselves. Toll roads nor PPPs have solved either the funding or congestion problems that face our state. When a PPP toll road, like the two in North Texas, I-635 and the North Tarrant Express, costs commuters 75 cents PER MILE to get to work, how is that not a tax increase? It's not a user fee as PPP advocates claim, since $1 billion in gas taxes are propping up those two projects, with $8 billion in future gas taxes also at risk for the Hwy 161 toll project that couldn't get financing without taxpayers being on the hook for the losses. Regardless of whether the public sector or private sector slaps tolls on our public freeways, the end user, you and I, are footing the bill. PPPs remain the MOST expensive way to fund roads with the most long-term ill effects to taxpayers, like non-compete clauses that prohibit or penalize the expansion of free roads surrounding toll projects.

Has US PPP reached boiling point?

Project Finance Magazine, 24 September 2010

Strains on local government, combined with an established US PPP track record, are prompting greater government interest in public-private structures. By Robert Gibbons, partner, Ivan Mattei, partner, and Michael McGuigan, associate, Debevoise & Plimpton LLP.

Read more: [us] [ppp] [tifia] [legislation] [states]

Severe cost cutting at various levels of government across the US has resulted in painful and widely publicised cutbacks in a wide range of governmental services that had once almost been taken for granted. If, as seems increasingly likely, these budgetary constraints are structural and not merely transitory, they will force government to explore calling on private capital and expertise to develop, construct, operate and maintain transportation infrastructure in the United States. These developments are coming to a head at a time when the volume of completed PPPs has grown to a level sufficient to create broad and growing awareness among public officials of their potential benefits.

The track record of private involvement in US transportation infrastructure projects includes the well-publicised monetisations of the Chicago Skyway Toll Bridge and the Indiana Toll Road, as well as the use of PPPs to procure numerous other significant transportation facilities, such as the Dulles Greenway, SR-91 in California, the new international air terminal (Terminal 4) at JFK International Airport, the Port of Miami Tunnel, the North Tarrant Expressway and I-635/LBJ Freeway in Texas, and Denver’s FasTracks commuter and light-rail project.

These projects demonstrate, most notably, the fact that PPP procurement compels all parties to plan and budget for the full life cycle costs of maintaining and operating (and not just building) the transportation facility in question. This is a sea change from the traditional model of transportation infrastructure procurement in which the life cycle costs to be incurred years and decades into the future are neither considered nor budgeted for at the time of procurement. Aside from leaving state and local governments with a potentially significant overhang of unfunded operation and maintenance obligations, the traditional procurement model has not always focused the parties’ attention on the fact that design decisions at inception can have important effects on life cycle costs.
While the current environment creates an opportunity for PPPs to flourish in the US transportation infrastructure industry, obstacles certainly remain. Proponents of PPPs have encountered difficulty in achieving effective PPP-enabling legislation at many levels of government, as legislators attempt to balance transportation infrastructure needs with the concerns of their constituents. But governments must also avoid imposing terms and conditions on PPPs (whether substantive or procedural) that result in unnecessary delay or expense in the procurement process or that undermine the viability of projects by shifting risks to the private sector that it is not well equipped to bear. These dangers are particularly acute at a time when financial markets remain unsettled and lenders are reluctant to stretch to finance projects presenting unusual risks.

This article discusses the status of PPP-enabling legislation in the US at the state and federal levels and identifies some of the key transportation infrastructure PPP projects that have recently been procured or proposed in the US and their related financing structures.

PPP-enabling legislation

As a general matter, governmental entities in the United States must be authorised by statute to use PPPs to procure transportation infrastructure projects. Recently, there have been both advances and setbacks on this front.


A number of states have enacted some form of PPP-enabling legislation. However, the scope and substance of state PPP-enabling statutes tends to differ significantly from state to state and, indeed, the lack of a uniform national framework has dragged on the PPP market in the US. Some states have broad, sweeping PPP-enabling statutes that permit an array of projects, thereby facilitating the use of PPPs in those jurisdictions. Yet, other states’ PPP-enabling legislation is narrowly drafted, sometimes specifically identifying permitted projects and/or requiring prospective projects to be approved by a specified officer or body of the state, thereby subjecting PPPs to greater political scrutiny and generally inhibiting their application in those jurisdictions.

Legislators in Illinois and Indiana have paved the way for procuring the estimated $1 billion Illiana Expressway project, a 37km eight-lane expressway connecting interstate highways in Illinois and Indiana, through a PPP. In June 2010, Illinois governor Pat Quinn signed a bill authorising the state to seek a private partner to develop, finance, construct, maintain and operate the new road. Indiana governor Mitch Daniels had signed a similar bill in March.

In 2009, California enacted comprehensive PPP-enabling legislation that vastly expanded the state’s PPP program for, among other things, transportation infrastructure projects, and Arizona governor Jan Brewer signed a bill authorising the state to enter into PPPs to construct, finance, operate and maintain transportation projects and to issue toll revenue bonds to finance them.

However, there have been setbacks. Most significantly, in 2007, Texas instituted a partial, two-year moratorium onprivately financed toll roads throughout the state (with exemptions for some existing projects). Although the partial moratorium expired on 1 September 2009, the Texas legislature failed to extend the PPP-enabling legislation that authorised comprehensive development agreements for transportation infrastructure projects, and the authority expired on 31 August 2009.

In May 2010, the Michigan house narrowly voted in favor of a bill to permit the Michigan Department of Transportation to enter into PPP agreements to design, construct, operate, or maintain public transportation facilities. However, the state senate has gone into recess without acting on the legislation. If the state senate had passed the bill, the $2 billion Detroit River International Crossing project could have been procured as a PPP. A similar setback occurred in Hawaii, where a proposed bill that would have authorised PPPs for transportation-related projects failed.

Federal – highways

US law generally restricts the tolling of roads that are constructed using federal funding, a class which includes most interstate highways in the country. As such, statutory exemptions to federal law are necessary in order to allow PPPs to charge tolls on such roads. The Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for Users (SAFETEA-LU) was signed into law on 10 August 2005 and contains a number of such exemptions to federal law.

Among other features, SAFETEA-LU provides for an Express Lanes Demonstration Program, which authorises 15 express toll lane projects on congested interstates, high occupancy toll (HOT) lanes projects where existing high occupancy vehicle (HOV) lanes may charge tolls to vehicles that do not meet the passenger requirements, an Interstate Construction Toll Pilot Program, under which up to three states may impose tolls on new interstates to support the financing for their construction, and up to $15 billion of tax-exempt private activity bonds (PABs) for PPPs in which a private partner has a long-term interest.

SAFETEA-LU was set to expire on 30 September 2009. James Oberstar, Chairman of the House Committee on Transportation and Infrastructure and an opponent of PPPs, has proposed the Surface Transportation Authorization Act of 2009, which would overhaul federal transportation programs and compromise the ability to use PPPs for highway projects in the US. The vote on the Surface Transportation Authorization Act of 2009 has been deferred until the end of 2010. In the interim, in March 2010, President Obama signed into law the $17.6 billion HIRE Act, which contains language extending SAFETEA-LU through the end of 2010.

In addition to the various programs available under SAFETEA-LU, the Transportation Infrastructure Finance and Innovation Act of 1998 (TIFIA) authorised the US Department of Transportation to assist in financing up to 33% of the cost of transportation infrastructure projects, including PPPs, with a value of at least $50 million. The Transportation Infrastructure Finance and Innovation Act of 2009, introduced in the US House of Representatives in June 2009, could increase the maximum loan amount for certain transportation infrastructure projects from 33% to 49% of the cost of the related project.

Federal – aviation

In the airport sector, the PPP debate arises in the context of the necessary reauthorisation of the Federal Aviation Administration (FAA), including its airport privatisation pilot program. The US House of Representatives passed its version of the FAA Reauthorization Act in 2009 (FAARA), and that bill is now in the US Senate. The House bill, which was also proposed by Representative Oberstar, contains two significant changes to the airport privatisation pilot program that would adversely affect prospects for privatisation of US airports. First, the bill would increase from 65% to 75% the percentage of airlines using an airport that must approve its privatisation. Second, the privatised airport would not be entitled to some of the discretionary funds available to other airports. As the House and Senate continue to prepare an agreed-upon version of FAARA, the latest FAA authorisation has been extended until 30 September 2010.

American Recovery and Reinvestment Act of 2009

The $787 billion American Recovery and Reinvestment Act of 2009 (ARRA), passed in February 2009, includes over $48 billion for shovel-ready US transportation projects. While these projects are generally not suited to procurement as PPPs, the availability of such funds to state and local governments may have contributed to the recent lull in PPP activity in US transportation infrastructure.

Recent US transportation infrastructure PPP projects


In May 2010, the California Transportation Commission (CTC) approved the use of a PPP to procure the Presidio Parkway, a $1.045 billion project that will refashion the south access to the Golden Gate Bridge in San Francisco. The California Department of Transportation (Caltrans) subsequently issued a draft RFP, which indicated that Caltrans will apply for up to $500 million in PABs and request $309 million in TIFIA financing. This would be the first PPP project under California’s new PPP-enabling legislation. In February 2010, the Los Angeles County Metropolitan Transportation Authority agreed to launch strategic studies of six PPP projects that would re-develop the area’s highways and public transportation. Although California’s PPP efforts encountered a slight setback in August 2010, when the California Public Infrastructure Advisory Commission determined to procure the $1.1 billion Gerald Desmond Bridge project as a design-build project rather than a PPP as originally anticipated, the PPP movement remains strong in California.


In June 2010, the Denver Regional Transportation District (RTD) selected a consortium to design, build, finance, operate and maintain the $2.1 billion PPP portion of the $6.5 billion FasTracks commuter rail development project that includes a train to Denver International Airport. On 12 August 2010, the initial $1.6 billion phase of the project achieved financial close with a financing package that included roughly $400 million in PABs and $52.3 million of sponsor equity, in addition to roughly $1.15 billion in progress payments to be provided by the RTD.


In February 2010, ground was broken on the I-595 express lanes PPP project in Broward Country, Florida. The US Department of Transportation provided $603 million in TIFIA financing in March 2009 toward the total project cost of $1.8 billion. The Florida Department of Transportation will use federal funds and toll revenues to make payments to the private operator under a 35-year design-build-finance-operate-maintain concession. In October, 2009, the Port of Miami Tunnel PPP project reached financial close. The financing for the project consisted of a $340 million TIFIA loan, $340 million of senior debt from a syndicate of ten banks, and $80 million of sponsor equity. The city of Miami also provided a $50 million letter of credit to backstop its obligations.


Georgia passed PPP-enabling legislation in 2009 that allowed the Georgia Department of Transportation (GDOT) to establish a PPP program using solicited bids. In June 2010, GDOT short-listed three consortiums to bid on the West by Northwest project, which includes a 50-year concession to design, build, finance, operate and maintain a managed lane system on segments of I-75 and I-575, as well as the addition of managed lanes to portions of I-285 and I-20. GDOT, which has estimated the aggregate cost of the project at over $2.3 billion, originally expected to issue the RFP in late 2010 but has extended the timeline of the RFP process to allow the short-listed bidders more time to study the draft RFP, and the RFP is now expected in January 2011. GDOT is currently considering eighteen separate projects that could be valued at over $16 billion.

New Jersey/New York

The Port Authority of New York and New Jersey (the Port Authority) issued a request for information in May 2010 for a 30- to 40-year concession to design, build, finance and maintain a replacement to the Goethals Bridge. Operations, including toll collection, will remain under the Port Authority’s control. It has been reported that the Port Authority expects to issue an RFQ in August 2010 and to select the winning bid by late 2011. It has also been reported that the Port Authority is looking to lease the Outerbridge Crossing and the Bayonne Bridge, which also connect New Jersey to Staten Island.

Puerto Rico

The Puerto Rico Public-Private Partnerships Authority (PRPPPA), which was established in 2009 to launch infrastructure PPPs, has started its first PPP process. In June 2010, the PRPPPA issued a RFQ for a 50-year concession to finance, operate and maintain the PR-22 and PR-5 toll roads, and by late July 2010, eight consortiums had responded to the RFQ. The 84km PR-22 is the most traveled highway on the island and generated $85 million in revenues in 2009. PR-5 is located in the San Juan metropolitan area and generated $4.2 million of revenues in 2009.

Puerto Rico also plans to seek a private partner for the financing, operating and maintenance of the existing PR-52, PR-20, PR-66 and PR-53 toll roads. While the PRPPPA has the authority to form committees that can issue RFQs and negotiate contracts for infrastructure projects, final decisions rest with the governor of the island.


The 52-year concession to design, build, finance, operate and maintain a managed lane system along I-635/LBJ Freeway reached financial close in June 2010. The $2.7 billion financing included $615 million in PABs, a $496 million loan from the Texas Department of Transportation (TxDOT), $665 million of sponsors’ equity and a $850 million TIFIA loan – the second-largest loan in the history of the TIFIA programme. The $2 billion North Tarrant Expressway project, which reached financial close in December 2009, was financed with a combination of PABs, a TxDOT contribution, sponsors’ equity and a TIFIA loan.


On 5 May 2010, the Virginia Department of Transportation (VDOT) solicited proposals for the 89km greenfield US Route 460 toll road project, which VDOT is procuring as a PPP under the Public-Private Transportation Act of 1995. The project is estimated to cost roughly $1.5-2 billion and, initially, no state or federal funding was expected to be available to finance the project. However, VDOT has acknowledged a potentially significant gap in toll revenues and debt service and supplemented the solicitation for proposals with an addendum that provided for a public subsidy. Conceptual proposals are now due in early September 2010 and the detailed RFP is expected in January 2011.


After collapsing in 2009, the privatisation of Midway Airport may move forward. The FAA has granted the city of Chicago’s latest request to extend its inclusion within the pilot privatisation programme, which permits the privatisation of five airports, and the city of Chicago now has until November to submit its plans and timetable for privatising the Airport. As a large hub airport, Midway occupies the sole slot available for such airports under the pilot programme.

The FAA has also accepted preliminary applications to privatise three non-hub airports, thereby allowing the airports to seek a private partner before submitting a final application to the FAA. In September 2009, the FAA accepted New Orleans’s Louis Armstrong Airport’s application. In December 2009, Puerto Rico’s Luis Muñoz Marín Airport was selected as the third airport. Finally, in May 2010, the FAA accepted the application from Georgia’s Gwinnett County Airport, leaving one last non-hub slot available. The RFQ for the Gwinnett County Airport project was issued in July 2010 and three consortiums responded; the RFP is expected in October 2010.


In order for PPPs to flourish, PPP-enabling legislation must be effective, workable and compatible with private sector concerns and objectives. Reliance on the private sector for transportation facilities long-provided by governmental authorities may seem a risky proposition at first. However, dire economic conditions and the escalating need for reliable transportation facilities may well allow PPPs to establish a prominent role in the development of transportation infrastructure facilities in the US.

Lawmaker: privatized toll road experiment failed

Link to article here.

Bauer: The benefits of sharing power in the Statehouse

1:30 PM, Sep 25, 2010  |  The Indy Star
By Patrick Bauer, D-South Bend

Star file photo

The last time there was one-party rule in Indiana:

A budget was passed that caused a property tax crisis for home owners.

The Indiana Toll Road was leased to foreign investors, paving the way for two toll increases.

We were the laboratory for a $1 billion taxpayer-funded "experiment" to privatize our state's system to help Hoosiers most in need.
Unfortunately, funds from the toll road deal already are running short. Projects are being delayed and awarded to out-of-state contractors hiring out-of-state workers.

The privatization of social services has proven to be a calamity that will be draining Hoosiers' pocketbooks for years to come.

With both parties sharing power and Democrats in charge of the House, there will be no foreign powers taking over our interstates. More Indiana workers will be building our roads.

House Democrats have pledged to avoid all tax increases. Republicans have not made this promise, despite how shameful it would be to increase taxes on Hoosier families now.

We will continue our commitment to creating jobs for Hoosiers, a commitment that was lacking from Republican leaders in the Daniels administration and legislative branch this past session.

Thanks to House Democrats, we were able to provide tax credits to new employers, expand incentives to small businesses, and provide the potential for creating new jobs through a plan to bring $100 million in federal dollars back to Indiana to help employers hire Hoosiers.

That this program has gotten nowhere reflects on an executive branch that chooses to cite praise from The Wall Street Journal rather than admit it is not doing anything to create new jobs. Indeed, it has been demonstrated that 40,000 jobs they claim to have created don't even exist.

House Democrats will offer two incentives to assist small businesses: a job creation tax credit and low-interest loans to help them weather a tough economy.

More importantly, we will insist that projects funded by Indiana tax dollars employ Indiana residents before anyone else. The strongest engine we can have to power our state's recovery is doing everything we can to get Hoosiers back to work.

Our commitment to education will continue. We promise to pass a school funding formula before any other spending bill, work to cap class sizes to make sure dollars go to the classroom, and seek accountability standards that rely upon input from parents and students as well as teachers and administrators.

We will put an end to taxpayer-funded bailouts that place the interests of professional sports teams over working Hoosiers.

We can do a better job of making sure businesses that receive taxpayer-funded incentives live up to promises to create and retain jobs. If not, we have every right to take those incentives back.

We can help save money for taxpayers and businesses that follow the rules and bring hundreds of millions of dollars in revenue simply by exposing tax cheats using worker misclassification to avoid paying their fair share.

We will demand that state government lift the veil of secrecy on the effectiveness of job creation and the impact of state budget cuts on programs and services.

We will put an end to "pay to play" in Indiana. If you bid on a state contract, you should not be able to give political contributions to the people who award those contracts.

In short, we will be continuing to question the effectiveness of those in control of this administration. We will point out where they have not done well and where they ignored the law.

We will remind everyone that the strides forward that have taken place in recent years -- property tax relief and the Healthy Indiana Plan, to name just two -- have come when two parties work together.

It has proven to be a better plan than one party -- and one man -- giving the orders and being accountable to no one.

I-35 hearings push more toll roads to benefit Cintra

To find out where the I-35 workshop is in your area. Go here.

To download the flyer below to distribute at the meetings, go here.


Tolling EXISTING LANES on I-35 is just ONE of the many toll proposals by the I-35 Corridor Segment 3 Committee...get your comments ON THE RECORD!

Four toll proposals...

1)Add toll lanes to I-35 called “I-35 HOV / Toll Lanes from SH 45 SE to I-10”
2)Toll US 290 from Austin to the SH 130 toll road (FYI, the only free lanes will be access roads, not expressway lanes. TxDOT info very misleading on this project!)
3) Convert existing lanes of I-35 to toll lanes and expand routes (SH 21, SH 71, SH 80, SH 290) that could feed more traffic to the SH 130 toll road a higher priority than non-toll improvements to our public freeways. Did you know that TxDOT signed a contract that gives it a higher share of toll road profits if it feeds more toll payers to Cintra’s SH 130 toll road? That’s why its pushing these connectors routes to be expanded instead of just expanding I-35 and keeping it a FREEway.
4) The other, called “I-35/SH 45 SE/SH 130 Improvements” is to remove the interstate designation of I-35 and re-designate it “Business Route I-35” making the SH 130 and 45 SE toll roads the de facto interstate that runs throughout our state...problem #1 - it’s approx. 30 miles to the east of existing I-35 and significantly out of the way and is currently so underutilized it serves next to no practical purpose for those traveling to major urban areas like Austin. In part, they’re throwing this one in there in order to have people “reject it” and push other proposals that feed traffic to Cintra’s SH 130 toll road.

What’s the best solution?

Expand I-35 and keep it a FREEway. Support the project proposal called “I-35 improvements from SH 195 to I-10” and “I-35 improvements from SH 195 to Williamson/Bell County Line.” Say ‘YES’ to all non-toll FREEway improvements in the master plan.

What makes no sense...unless you’re the Spanish Company Cintra?

The proposal called “I-10 Improvements” that would expand I-10 from San Antonio to the Cintra-owned SH 130 toll road in Seguin. There is no significant traffic or congestion problems along this portion of the interstate, so why should taxpayers pay to expand a route that primarily benefits a private toll operator instead of fixing the heavily congested I-35? Say ‘no’ to the I-10 improvements proposal.

Also, the New Braunfels and San Marcos Outer Loop projects make no sense, unless you’re a developer. These projects constitute eminent domain abuse and will pave over private property to primarily benefit DEVELOPERS, not for a legitimate public use. There is NO congestion problem in these areas. These are greenfield projects that heist private property to essentially benefit another private entity.

Lastly, most rail projects are taxpayer-funded boondoggles. The cost to build and maintain these systems far exceeds the cost of expanding highways.

The SNEAKY reason for tinkering with FREE routes...

...contract signed with Spanish Company

The non-compete agreement in place for the SH 130 segments 5 & 6 toll road prohibits FREE road expansion surrounding that toll road...this is a fraud upon the public and puts private interests over the public interest of a public road system freely accessible to ALL Texans, not just those who can afford toll taxes (especially when those tolls taxes go to a private, foreign company).

TxDOT claims it's responding to the public backlash to the Trans Texas Corridor plans for TTC-35, by soliciting public input on what to do on I-35 now that they've pulled the plug on TTC-35. However, if you look at TxDOT's 100 Most Congested Roads list, it labels improvements to I-35 as tolled.

Cintra-Zachry won the only Trans Texas Corridor TTC-35 segments that will be built (called SH 130 segments 5 & 6). The State signed a contract in 2007 that granted Cintra-Zachry a non-compete agreement (prohibiting the State from building FREE roads/lanes within a certain mile radius of the toll road). So the toll option remains a part of the plans for I-35 despite the opposition to tolling by citizens on the committee.

Why? So the State won't violate Cintra's non-compete agreement by building FREE lanes on I-35 that would draw traffic away from Cintra's SH 130 toll road where they're GUARANTEED profits!

Moving the alignment of I-35 and tinkering around with its interstate status is NUTS! TxDOt needs to leave I-35 an interstate, expand the lanes without tolls, make SH 130 a free road (so trucks not destinating in Austin can take it), and expand our other public roads WITHOUT tolls! Tolls are the MOST EXPENSIVE way to fund roads and are far less efficient than gas tax-funded roads.

The whole reason for this exercise is the absolute FAILURE of SH 130 to provide congestion relief on I-35. Why would anyone want to go 35 miles out of their way to take a toll road that doesn't end up saving you any time because the distance is too far flung from Austin and other destinations? Obviously, the answer is very few since so few take SH 130. Tolling ANY existing lanes is DOUBLE TAXATION which Texans oppose. Making SH 130 a FREE route would incentivize trucks needing to bypass Austin to use it (which in turn would relieve congestion from I-35). However, merely reducing toll taxes won't do the trick. It needs to become a free road in order for people to go out of their way to use that bypass route.

No toll should be on 45 SE given the fact it was 100% built and paid for with gas taxes! So, yes, take the tolls off that FREEway. Removing tolls on 45 SE should NOT be tied to tolling existing lanes on I-35, which is also built and paid for. Expand ALL these suggested "alternate" routes and make them freely accessible to ALL Texans, without tolls.

For more information go to:

UBS backs Obama's infrastructure bank

Link to article here.

It shouldn't surprise anyone that UBS, Goldman Sachs, Macquarie et al back an infrastructure bank. They're the ones who will primarily benefit from taxpayer money bailouts used to subsidize LOSER toll projects. Such private companies wouldn't touch most of these toll projects with a 10-foot pole without taxpayer-backed guarantees that they won't lose money if the traffic doesn't show up. Oh, and UBS is part of the Spanish consortium awarded with the Trans Texas Corridor TTC-69 development it any wonder why they lobby at the public trough for more "infrastructure"? Sadly, these same folks brought Texas an infrastructure bank years ago..WAKE-UP Texas! The same corporate hogs at the trough are raiding your doesn't matter which Party is in charge, they BOTH raid YOUR wallet to benefit their cronies and campaign contributors.

UPDATE 1-UBS Americas backs infrastructure bank funded by U.S.

Reuters -- Wed. Sep 22, 2010 12:50am BST

* UBS Americas CEO recommends no private ownership

* Says bank should be capitalized by Treasury Dept

* Proponents see revenue from projects, tax savings

* Pensions funds, private equity could invest

(Adds infrastructure investment figures, companies, Sen. Kerry quote)

By John Crawley

WASHINGTON, Sept 21 (Reuters) - UBS Americas (UBSN.VX) (UBS.N) threw support behind the Obama administration's proposal for a U.S. infrastructure bank on Tuesday, but warned against creating a quasi-government agency like housing finance enterprises Fannie Mae and Freddie Mac.

"Creating a national infrastructure bank is an idea whose time has come," Robert Wolf, chief executive of UBS Americas, told a Senate Banking Committee hearing called to explore alternatives for financing infrastructure projects.

Wolf said Congress should establish an institution that would leverage private investment to finance transportation and other big-ticket projects like rail, road, water, broadband or airport upgrades.

He recommended that it not have private shareholders. Rather, Wolf said, it should be capitalized through the U.S. Treasury to avoid the problems experienced by hybrids Fannie Mae (FNMA.OB) and Freddie Mac (FMCC.OB) that were held by private shareholders but benefited from government sponsorship.

Fannie and Freddie were seized by Treasury two years ago after losses during the U.S. housing market collapse and recession. Taxpayers have poured $150 billion into the lenders to keep them afloat.

Obama proposed a $50 billion infrastructure spending program earlier this month to rev up the economy and create jobs. The bank, Obama said, could be one way of financing the highest-priority projects through grants and loans. Wolf favors a loan-focused arm.

Obama envisions creating the bank as part of long-term infrastructure spending legislation expected to take shape in 2011. Presidential advisers have suggested capitalizing the bank at $25 billion.

Obama, many in Congress and transportation experts acknowledge that present infrastructure funding mechanisms that leverage gas taxes and other user fees cannot keep pace with necessity and demand and that other options are necessary.

Last year, the federal highway trust fund nearly ran dry before Congress rescued it with emergency cash.

Public investment in transportation infrastructure in 2006 was about $140 billion, split between the federal government and state and local governments.

The U.S. has been slower than other regions to adopt forms of private financing for infrastructure. Europe's infrastructure bank, the European Investment Bank, financed $350 billion in projects from 2005-09 to help modernize ports, reconfigure city centers and expand airports and rail lines.

Australia's Macquarie Group (MQG.AX) is the global leader in private infrastructure investment, according to Infrastructure Investor magazine rankings.

Others include Goldman Sachs (GS.N) and Alinda Capital Partners, the largest U.S. manager of pension funds for infrastructure investment.

Companies like equipment maker Caterpillar Inc (CAT.N), General Electric Co (GE.N) and privately held engineering firm Parsons Corp could benefit from stepped-up spending in this area.

The American Society of Civil Engineers estimates it will cost more than $2 trillion to bring roads, bridges, and other infrastructure to a state of good repair.

"We're talking staggering sums here, and it clearly reflects just how much we have neglected our infrastructure," said Senator John Kerry, who is a lead voice for an infrastructure bank in the Senate.

Proponents have said that investments from private equity and pension funds and other sources would complement federal capital.

Projects could generate revenue through tolls or other fees that would provide long-term, low-yield returns for investors. Other projects would offer tax advantages as the primary benefit of investment.

Wolf, who said any infrastructure bank should be transparent and work alongside other government-run credit programs for infrastructure construction, cited figures that show $180 billion in private capital available for infrastructure investment.

"When I hear that an infrastructure bank will not cost taxpayers a dime, I wonder why federal resources and guarantees are needed," Senator Richard Shelby said during the hearing.

Pennsylvania Governor Edward Rendell said a bank would be a part of an effort that would include more traditional transportation funding and other successful subsidy programs like Build America Bonds, taxable financing that has lowered borrowing costs for state and local governments. Obama has proposed making this program permanent.

(Reporting by John Crawley; Editing by Phil Berlowitz)

Private toll firm claims government immunity

Link to article here.

Published: July 18, 2010 3:00 a.m.

Sued over crash, Toll Road firm claims immunity

Niki Kelly

The Journal Gazette

INDIANAPOLIS – An accident on an icy Indiana Toll Road almost two years ago is at the heart of a legal battle over whether the company operating the road under a 75-year lease enjoys governmental immunity.

Chicago resident Aimee Campbell has sued ITR Concession Co. for not closing or adequately maintaining the road, which was allegedly dangerous for travel on Dec. 22, 2008.

A Spanish-Australian consortium paid $3.8 billion to the state in 2006 to rent the Indiana Toll Road for the next 75 years. That group formed ITR Concession Co. to operate and manage the road.

According to the court file, Campbell was driving east on the road about 10:30 a.m. when she lost control of her car on the ice and snow, rolled three times and ended up at the bottom of a 40-foot embankment in LaGrange County.

She suffered a broken arm, cuts and bruises.
According to Campbell’s amended complaint, she had been driving on the road for more than two hours and saw no plows, salt trucks or other ice- or snow-removal equipment.

She also saw multiple cars and tractor-trailer rigs on the side of the road as the result of crashes.

“They had the opportunity to close the road,” said Michael Ely, attorney for Campbell. “If it’s open, they are saying it’s good to go.”

A major ice storm, along with blustery winter conditions, gripped the northern part of the state just days before Campbell’s crash.

ITR Concession responded in court filings that the road surrounding the crash spot received 33 tons of salt and 74 gallons of anti-icing solution the day before the crash and had been plowed and received anti-icing solution Dec. 22.

But a key argument in the case is that ITR Concession is claiming a type of legal immunity usually reserved for governments.

State law, for instance, says governmental entities or employees cannot be held liable if a loss results from the “temporary condition of a public thoroughfare … that results from weather.” The court filing claims the operation and maintenance of the road constitute “governmental functions undertaken for the public purpose” and that governmental tort immunity should extend to ITR Concession.

A tort is a civil wrong that could be cause for liability.

Norman Barry, attorney for the Toll Road company, said this is not a new legal theory.

“Other quasi-governmental entities have been afforded immunity under Indiana law,” he said. “We are asking the same.”

A federal judge in Illinois, where the case was filed, initially declined to dismiss the case but hasn’t definitively ruled on the issue.

“Traditionally, common law is that governments can’t be sued for weather-related issues,” Ely said. “I have no problem when the government claims immunity. I have a serious problem when a private company does.”

Such immunity is not provided for in the exhaustive contract between ITR Concession and the state, said Rep. Win Moses Jr., D-Fort Wayne.

“But nothing about (this deal) surprises me anymore,” he said. “If they negligently cared for the road, then it’s a legitimate question for the woman to pursue. It will be settled in the courts.”

Rep. Jeff Espich, R-Uniondale, didn’t remember the issue of immunity coming up in the debate but said it makes sense that the private company would be afforded the same protection for performing the same function as the state.

“If they are subject to a level of liability that government doesn’t experience,” he said, “why would anyone ever agree to run the road?”

Professor Andrew Klein, a tort law expert from the Indiana University School of Law in Indianapolis, said he has seen similar theories used for military contractors engaging in activity on behalf of the government.

“I wouldn’t immediately dismiss the argument as implausible. On the other hand, I’m not aware of any precedent that makes it a definitive winner,” he said. “It’s an interesting issue. Then again, I’m a torts professor.”

Toll tunnel can't pay its debt

Link to article here.

Ailing tunnel project takes toll on investors

By Annie Guest

Updated Thu Sep 2, 2010 7:48pm AEST

Audio: Litigation funder eyes off toll road problems (PM)
Map: Brisbane 4000

Related Story: Too early to say if Clem7 going broke
Investors in Australia's latest ailing toll road project have turned their attention to legal action over grossly over-estimated traffic forecasts.

Brisbane's cross-river Clem7 tunnel opened in March with great ceremony and high hopes of easing the city's traffic congestion.

Traffic forecaster Maunsell Australia predicted 90,000 motorists a day would use the tunnel, but in reality the figure is less than 30,000 and that is with the toll slashed.

Tunnel operator Rivercity Motorway revealed this week it is struggling to pay debts exceeding $1.5 billion and Maunsell Australia is not speaking publicly about its wayward predictions.
Andrew Charles from litigation funder IMF says it has responded to investor inquiries about potential legal action against Maunsell.

"The figures that have come out in terms of the actual traffic compared to the forecast are very different," Mr Charles said.

"The question becomes... were all steps taken to give the best, accurate picture?"

The Clem7 tunnel was proposed by the Brisbane City Council, but it says the private sector now bears the risk.

Rivercity Motorway granted indemnity to Maunsell for claims over $500,000 made by a third party, but Mr Charles says that is not the end of it.

"That's however a loss they would only bear through their shareholding in Rivercity Motorway. If the investors themselves sued personally against Maunsell Australia, I don't see that indemnity would affect them," he said.

But Mr Charles says he is not aware of any precedents of investors taking successful legal action against traffic forecasters on unsuccessful toll roads.

Maunsell has not returned the ABC's calls, and Rivercity Motorway declined an interview.

Public-private partnerships

This debacle will further cool the enthusiasm for public-private partnerships.

But the company behind Australia's biggest road project - Brisbane's $5 billion Airport Link - is not flinching, publicly at least, despite its toll road eventually connecting to the under-patronised Clem7 tunnel.

Airport Link's operator BrisConnections also declined an interview but released the following statement:

"BrisConnections is confident its forecast traffic numbers remain sound," it said.

"Clem7 provides a component of our traffic, however we are satisfied the feeder roads including Clem7 will provide sufficient traffic flow for Airport Link."

But that is mocked by transport expert Dr John Goldberg, an honorary associate of the University of Sydney.

"I don't believe it, frankly. I've analysed the whole thing on the basis of the product disclosure statement. Unless I've made gross mistakes in arithmetic, I can't say that they've got any hope at all," he said.

BrisConnections has attracted considerable controversy in just over two years of operation, with investors brought to the brink of bankruptcy.

But Dr Goldberg says BrisConnections has rockier times ahead.

"If you pay the equity returns to investors, the company will never be able to amortise the debt; never be able to pay the debt back," he said.

"And the debt is far higher; we're looking at $1 billion, maybe $2 million more than the Clem7. The modelling is virtually identical; it's what they call a work-back.

"The work-back model is where they start with the returns to equity investors and work back to traffic forecasts, which will satisfy that. It's got nothing to do with the interaction of land use and transport."

Dr Goldberg has previously predicted the financial failure of Sydney's Lane Cove and Cross City tunnels.

Tags: business-economics-and-finance, company-news, industry, road-transport, australia, qld, brisbane-4000

First posted Thu Sep 2, 2010 7:45pm AEST

Report: 'Toll roads not the answer to congestion'

Link to article here.

From the second article below: "'Toll roads are not, and will never be, a solution to congestion on Britain's roads, no matter how attractive they may appear to cash-strapped politicians desperate to deliver otherwise unaffordable road schemes," the report concludes."

Can toll roads ever work?

A report into Britain's first major toll road claims it is an "expensive failure", doing little to ease congestion.

By David Millward, Transport Editor

London Daily Telegraph
31 Aug 2010

The conclusions may be a matter of debate, but at the very least the report suggests that British motorists are a pretty mean bunch.

A road to help motorists dodge the worst of traffic around Birmingham seemed a no-brainer. Surely drivers would shell out a few quid rather than be stuck bumper to bumper during the rush hour.

Related Articles

M6 toll road 'has failed'

Apparently not.

The number of motorists using the toll road has fallen back to where it started, the project is costing Macquarie a shedload of cash and congestion on the M6 is back where it was when the project started.

This poses a few interesting questions. If the Government can't afford to build roads, will the private sector step in?

The answer is probably no, unless they can be guaranteed a return – which is probably why in an unguarded moment the head of Macquarie plaintively wished for congestion to get worse on the M6.

French motorists seem to accept that their credit cards are going to take a hammering when they use the autoroutes – as do British tourists heading to the sun.
When I drive in the US, I always have a mountain of quarters to pay tolls which are a part of everyday life.

This will only happen in Britain if a Government is prepared to handle the outcry if we start charging for using all our motorways.

And that would be a "very brave" decision, bordering on political suicide.


Link to article here.

Toll relief road 'has failed' report claims

A privately-built toll road, which was hailed as the answer to congestion on Britain's motorways, has been an expensive failure according to a new study published today.

By David Millward, Transport Editor

London Daily Telegraph
31 Aug 2010

Traffic jams around Birmingham are at least as bad as they were before the road was opened as motorists refuse to pay to use the 27-mile stretch which was intended to end gridlock on the M6.

The report by the Campaign for Better Transport, an environmental group, comes at a time when the Coalition has said it believes that private investment will be needed to pay for more motorways.

Related Articles

Motorists to pay tolls for new roads under Tory plans

The M6 toll road, which runs around the north west of Birmingham, opened in December 2003. It was designed to take some pressure off one the busiest stretches of the motorway in Britain.

When it opened, drivers were charged £2 to use the road. A series of above inflation increases has seen the bill rise to £5.

This has coincided with the number of motorists willing to pay falling dramatically, the study says.

In the spring of 2006 it attracted just under 60,000 drivers a day. By the start of this year, the figure had fallen to just over 40,000, marginally more than when the toll opened.

Those who are willing to pay can enjoy a far quicker journey during the rush hour, especially when traveling southbound when using the relief road takes around 40 minutes - about half the time needed on the M6.

But at other times the time saving is marginal - in many cases little more than five minutes. This, the Campaign says, means the toll is poor value for the motorists.

Meanwhile there is little evidence of congestion easing significantly on the M6 itself, the report says. Any gains which might have been made have been eroded by steadily increasing traffic levels.

The Campaign says that the Highways Agency itself has admitted that by 2008 traffic levels on the stretch of the M6 running parallel to the toll road were as they were before it opened.

"The M6 Toll has provided so little congestion relief that the Highways Agency has been forced to allocate hundreds of millions of pounds for additional capacity," the report adds.

Proposals include allowing cars to use the hard shoulder during the rush hour. But this, according to the Campaign, would cost between £300 to £500 million.

"Toll roads are not, and will never be, a solution to congestion on Britain's roads, no matter how attractive they may appear to cash-strapped politicians desperate to deliver otherwise unaffordable road schemes," the report concludes.

However an AA spokesman defended the M6 toll road. "Drivers who use it are happy to pay the premium, because it avoids the horribly lorry-congested M6.

"Macquarie who built the toll described it as one of the jewels in the crown. The drop in traffic has been a reflection of the economic situation.

"It will be very useful when the economy improves and does have a major role to play in the national network."

A Department for Transport spokesman added. "The construction of a privately funded and operated toll road was not the only answer to cutting congestion on the M6.

"While it is making a contribution, the Government is also considering other transport initiatives to ease congestion such as hard shoulder running schemes and the development of a national high-speed rail network with the first route running between London and the West Midlands."


Link to the story here.

Toll roads are no answer to congestion, says campaign group

Tuesday, 31 August 2010

The M6 Toll in the West Midlands has been a costly failure and the Government should not rely on toll roads to solve transport problems, according to a new report released today by Campaign for Better Transport.

Earlier this year Transport Secretary Philip Hammond signaled an interest in using tolls to pay for future road building schemes, most of which are expected to be halted after the October spending review. However, this report shows the 27-mile toll motorway has failed to provide any significant congestion relief for the original M6 and the price, which has been increased significantly year on year, is bad value for drivers who use the toll.

Despite the toll now charging motorists £5 on weekdays – the initial cost was £2 – the report shows that operator Midland Expressway Ltd, a subsidiary of the international infrastructure group Macquarie, is losing tens of millions every year and has written down the value of the road to below its cost. Meanwhile, M6 congestion is now so bad that the Government is considering spending another £500m on it to deal with the problems the toll road was supposed to solve.

Richard George, Campaign for Better Transport’s Roads and Climate Campaigner, said: “The research shows that the toll road has failed to cut congestion on the original M6 and has made big losses for its operator. With Government coffers running empty, it is no surprise that politicians are looking at toll roads as a way to deliver funds for new road building projects. But our research shows that private toll roads such as the M6 Toll don’t help motorists or the surrounding area, and don’t make money for investors either.

“Instead, the Government needs to spend scarce public funds on maintaining the roads we have and giving people good alternatives to car use.”

Key findings of the report

M6 Toll: bad for the West Midlands
  •  The toll road has failed to significantly cut congestion on the M6.
  •  Traffic which once used the toll is now returning to the M6, making congestion worse at peak times.
  •  Traffic has increased dramatically at either end of the toll, causing more congestion.
  •     Half a billion pounds of additional capacity is planned to relieve congestion on the M6 that the M6 Toll
     was supposed to deal with.

M6 Toll: bad for drivers
  •     Journey times on the M6 are only slightly better than before the toll opened.
  •     Outside of peak times, journeys on the M6 Toll are not much faster than on the M6.
  •     Average time savings were between 7 and 12 minutes in the opening year.
  •     The cost of the toll has risen sharply each January, well above inflation.
  •     The toll road’s operators are exploring ways to charge more at peak times.

M6 Toll: bad for investors
  •     Midland Expressway Ltd has lost around £26 million a year since the toll opened.
  •     Revenue has been in steady decline, as traffic on the toll has been falling since 2006.
  •     The toll road’s value has plummeted, from A$2.2bn in 2008 to A$412m in 2009 (the parent company
     is Australian).
  •     Even when the toll was busiest (when there were major roadworks on the M6), MEL was still losing
     millions of pounds a year.

And finally

According to the report, Steve Allen, the chief executive of Macquarie Infrastructure Group (MEL’s parent company), told an Australian newspaper that “What we need is to slow down the M6” to make the toll road more attractive...

To see the 12-page report, go to

New $50 billion stimulus plan for roads floated

Link to article here.

Not only is the $50 billion an outrageous sum (with no known means of paying for it), the first round of the stimulus was largely supposed to go to "stimulate" jobs immediately with public works projects to "fix" our aging infrastructure (at one point in Texas, 70% of that money was going to prop-up LOSER toll projects with subsidies, which is a DOUBLE tax to build a project with stimulus money and then charge us AGAIN to use it!). It did NOTHING to "stimulate" the economy or give us any meaningful job creation.

Apparently, the road lobby doesn't think that was enough, so they're coming back for more. What's worse, is the New York Times article speaks of Obama pushing these PPPs (public private partnerships) as part of the package, which is the sale of Texas roads to foreign companies like Cintra of Spain. These grant the toll operators monopolies in sweetheart deals that charge taxpayers 75 cents a MILE to get anywhere. They have non-compete agreements that GUARANTEE congestion on the free routes, and other provisions that GUARANTEE profits and manipulate speed limits on our free roads to drive more traffic to the toll roads.

You may remember that we KILLED those deals in 2007 (and prevented Governor Rick Perry from re-authorizing them during the special session last year), so now the big money is going over our heads to the BIG DADDY federal government to accomplish what they couldn't get Texans to choke down...

September 6, 2010

Obama Offers a Transit Plan to Create Jobs


MILWAUKEE — President Obama, looking to stimulate a sluggish economy and create jobs, called Monday for Congress to approve major upgrades to the nation’s roads, rail lines and runways — part of a six-year plan that would cost tens of billions of dollars and create a government-run bank to finance innovative transportation projects.

With Democrats facing an increasingly bleak midterm election season, Mr. Obama used a speech at a union gathering on Labor Day, the traditional start of the campaign season, to outline his plan. It calls for a quick infusion of $50 billion in government spending that White House officials said could spur job growth as early as next year — if Congress approves.

That is a big if. Though transportation bills usually win bipartisan support, hasty passage of Mr. Obama’s plan seems unlikely, given that Congress has only a few weeks of work left before lawmakers return to their districts to campaign and that Republicans are showing little interest in giving Democrats any pre-election victories.

Central to the plan is the president’s call for an “infrastructure bank,” which would be run by the government but would pool tax dollars with private investment, the White House says. Mr. Obama embraced the idea as a senator; with unemployment still high despite an array of government efforts, the concept has lately been gaining traction in policy circles and on Capitol Hill.

Indeed, some leading proponents of such a bank — including Gov. Arnold Schwarzenegger, Republican of California; Gov. Ed Rendell, Democrat of Pennsylvania; and Michael R. Bloomberg, the independent mayor of New York — would like to see it finance a broader range of projects, including water and clean-energy projects. They say such a bank would spur innovation by allowing a panel of experts to approve projects on merit, rather than having lawmakers simply steer transportation money back home.

“It will change the way Washington spends your tax dollars,” Mr. Obama said here, “reforming the haphazard and patchwork way we fund and maintain our infrastructure to focus less on wasteful earmarks and outdated formulas, and more on competition and innovation that gives us the best bang for the buck.”

But the notion of a government-run bank — indeed, a government-run anything — is bound to prove contentious during an election year in which voters are furious over bank bailouts and over what many perceive as Mr. Obama pursuing a big government agenda. Even before the announcement Monday, Republicans were expressing caution.

“It’s important to keep in mind that increased spending — no matter the method of delivery — is not free,” said Representative Pat Tiberi, an Ohio Republican who is on a Ways and Means subcommittee that held hearings on the bank this year. He warned that “federally guaranteed borrowing and lending could place taxpayers on the hook should the proposed bank fail.”

The announcement comes after weeks of scrambling by a White House desperate to give a jolt to the lackluster recovery, and is part of a broader package of proposals that Mr. Obama intends to introduce on Wednesday during a speech in Cleveland. The transportation initiative would revise and extend legislation that has lapsed.

Specifically, the president wants to rebuild 150,000 miles of road, lay and maintain 4,000 miles of rail track, restore 150 miles of runways and advance a next-generation air-traffic control system.

The White House did not offer a price tag for the full measure or say how many jobs it would create. If Congress simply reauthorized the expired transportation bill and accounted for inflation, the new measure would cost about $350 billion over the next six years. But Mr. Obama wants to “frontload” the new bill with an additional $50 billion in initial investment to generate jobs, and vowed it would be “fully paid for.” The White House is proposing to offset the $50 billion by eliminating tax breaks and subsidies for the oil and gas industry.

After months of campaigning on the theme that the president’s $787 billion stimulus package was wasteful, Republicans sought Monday to tag the new plan with the stimulus label. The Republican National Committee called it “stimulus déjà vu,” and Representative Eric Cantor of Virginia, the House Republican whip, characterized it as “yet another government stimulus effort.”

But Governors Rendell and Schwarzenegger, and Mayor Bloomberg, who in 2008 founded a bipartisan coalition to promote transportation upgrades, praised Mr. Obama. And in policy circles, the plan, especially the call for the infrastructure bank, is generating serious debate.

“This is a very ripe policy question now,” said Robert Puentes, a senior fellow at the Brookings Institution’s Metropolitan Policy Program, who has been working for several years on blueprints for a bank.

On Capitol Hill, Representatives James L. Oberstar, Democrat of Minnesota and chairman of the House Transportation and Infrastructure Committee, has been developing his own bill, as has Representative Rosa DeLauro, Democrat of Connecticut.

Ms. DeLauro’s plan would create an infrastructure bank that would be part of the United States Treasury, where it would attract money from institutional investors, then channel the funds to projects selected by a panel. The program, which would make loans much like the World Bank, would finance projects with the potential to transform whole regions, or even the national economy, the way the interstate highway system and the first transcontinental railway once did.

The outside investors would expect a competitive return on their money, so many of the completed projects would have to charge fees, taxes or tolls. In an interview, Ms. DeLauro said she would be “looking at a broader base,” meaning the bank would finance not just roads and rails, but also telecommunications, water, drainage, green energy and other large-scale works.

But if the projects did not raise enough money, the Treasury might get stuck paying back the investors, a prospect that gave pause to so-called deficit hawks like Mr. Tiberi. In an e-mail last week, he said he agreed the nation’s road and communications networks needed to be improved but was concerned about creating another company like Fannie Mae that might need a bailout.

Inside the White House, the idea for a transportation initiative, and in particular an infrastructure bank, is one that the White House chief of staff, Rahm Emanuel, has been promoting. It was not included in the original $787 billion stimulus program because the administration and Congressional Democratic leaders wanted to pass that package as quickly as possible.

There is no shortage of projects in search of money. The problem, analysts say, is that Congress, which would create the bank, is not known for its ability to single out strategic priorities for growth. Instead, it traditionally builds broad support by giving a little something to everybody — Montana, for instance, would get a small amount of Amtrak money in return for its support for improvements along the Northeast corridor.

“We don’t prioritize,” Mr. Puentes said. “We take this kind of peanut butter approach of spreading investment dollars around very thinly, without targeting them.”

Samuel Staley, director of urban growth and land-use policy for the Reason Foundation, a libertarian research group, said the best way to spend money efficiently would be to establish the bank as a revolving loan fund so that money for new projects would not become available until money for previous projects had been repaid.

Mr. Staley expressed concern that in their zeal to spur growth and create jobs, Congress and the Obama administration would not impose such limits.

“With the $800 billion stimulus program, they were literally just dumping money into the economy,” he said. “There was little legitimate cost-benefit analysis.”

Sheryl Gay Stolberg reported from Milwaukee and Mary Williams Walsh from New York.

Cisneros jumps on road privatization bandwagon

Link to article here.

NOTE: Henry Cisneros is joining the ranks with Zachry and Red McCombs by jumping into road privatization schemes that fleece taxpayers. Hendricks tries to frame the issue around the token buzz word "jobs," yet these companies fail to grasp that unless an employee can afford to get to that job, the supposed job creation is a fantasy. Plus, road building jobs are very temporary compared to the long-term damage of multi-generational public debt, sweetheart deals, and private toll operators that charge 75 cents a mile to get to work. It's totally unsustainable. So few take SH 130 that ALL taxpayers, not just the users, are bailing it out for the entire life of the debt. The Transportation Commissioners are openly trying to figure out ways to incentivize trucks to take the expensive toll road (guess what, fellas? Truckers can't pony-up bucks they don't have and print money out of thin air like the feds do-- it's simple economics) with no success. This also poses a conflict of interest with Cisneros' wife as a sitting San Antonio City Councilmember that contributes to toll road decision-making for our region.
Private investors eye public projects

David Hendricks - David Hendricks
Web Posted: 08/31/2010 4:47 CDT

Roads, bridges, parking garages, airport systems, utility lines, solar energy projects: U.S. cities need more and more of them, either to serve population growth or to replace aging and crumbling systems.
Despite a mountain of money from last year's Recovery Act, many projects cannot happen. Private debt markets have shrunk because of the economic recession. Insurance companies have all but disappeared as investors, partly because of AIG's role in the financial industry crisis. Credit ratings agencies have toughened their standards, making bonds harder to issue.

Cities and states are broke anyway. The Texas Department of Transportation, for example, barely receives enough in gasoline tax revenues to pay for maintenance of existing roads, never mind new projects.

This pushes the nation to the verge of a new era of private investment for public projects, argues former Mayor Henry Cisneros in the preface to a new book, “The Handbook of Infrastructure Investing,” edited by Michael Underhill (Wiley, $95).

Read the rest of the story here.

Brownsville plans to privatize toll road in rail corridor

Link to article here.

NOTE: At least in this project, it's supposed to be 100% financed by revenue bonds, which do NOT put the taxpayer on the hook in case of losses. However, the devil is always in the details. If the deal contains a non-compete that prohibits or penalizes taxpayers if the government builds any free roads surrounding the toll road, Brownsville residents can count on congested free routes for the next 30-40 years! The first two segments of SH 130 are the poster child for FAILED toll roads, and the not only did the taxpayers pay to build it, they are bailing it out every year of the life of the bonds. Segments 5 & 6 of SH 130 were also taxpayer subsidized while Spain-based Cintra gets to walk away with all the profits for 50+ years. It contains a non-compete agreement, too, guaranteeing congestion on free routes for the next 30+ years. Don't expect I-35 to get fixed without tolls anytime soon (since free lanes "compete" with Cintra's profits). This is hardly a project that should be held up as a good example of toll road success or as a model for appropriate private financing.

Private financing, revenue bonds could build toll road

2010-08-29 22:57:09

The only way to pay for building a new road along part of Brownsville’s Union Pacific rail corridor” once the track is out, that is” is to make it a toll road.

That’s according to David Allex, head of the Cameron County Regional Mobility Authority, the agency behind the plan to build the proposed West Parkway tollway on an eight-mile stretch of the Union Pacific corridor.

The city of Brownsville doesn’t have the money, he said, and neither does the Texas Department of Transportation.

"So we looked at various ways of how we might be able to finance this thing without burdening any of our citizens on any taxes” either statewide, locally or individually," Allex said. "The only feasible way that we can do it is to do a toll road. We want to make this the most outstanding parkway in the state of Texas, and we can do that, because we can finance it through the tollway."

The most recent cost estimate on the project is $160 million, according to Richard Ridings, vice president for Austin-based HNTB Corporation, which serves as "general engineering consultant" for CCRMA on the project.

Ridings was CEO of the Oklahoma Turnpike Authority in the early 1990s when the state launched PikePass, the country’s first electronic toll collection system.

HNTB’s conclusion on the West Parkway project is that the toll road would be able to generate enough revenue over the life of the project to pay for operations, maintenance and to service the debt on the revenue bonds that might have to be sold to finance construction.

The CCRMA may look for other sources of funds in addition to revenue bonds, Ridings said.

"On all projects you continually look for ways to minimize the cost," he said. "If you can get some of the project paid for with some other means and methods you certainly try to do that, to minimize the amount of revenue bonds you have to sell. We also look for ways to finance the project strictly from a private-sector standpoint."

David Garcia, Cameron County deputy administrator and CCRMA assistant coordinator, said private investment is the most likely scenario at this point. Waiting for state funding to come along with money for a highway” well, it would be a long wait, he said.

"You’re looking at 10 to 20 years and a minimal amount of funding coming to different parts of the state," Garcia said. "You start asking yourself are we going to wait till that funding comes down, or are we going to try to do something about it and build this project sooner? The role of the (CCRMA) is to try to develop those partnerships through the public private sector” putting packages together."

To date, the CCRMA has lined up no potential private partners, though Allex said it has had interest from investors toward the parkway and other projects on the CCRMA’s to-do list, including construction of a second causeway to South Padre Island.

"We’re out there soliciting the private sector for several reasons," Allex said. "Number one, there is no money. There’s no money available from the city, the county or TxDOT to do things that need to be done to plan out a 30- or -50-year transportation development plan for the county."

Ridings said privately financed toll roads aren’t unusual. State Highway 130 toll road in Central Texas, for example, is a public-private toll project built in response to a surge in traffic on I-35 created by NAFTA.

"That was a very similar situation where the state just could not pull together enough toll revenue bond money to fund it, so they entered into a partnership with a private firm," he said.

Three similar projects are under construction in the Dallas area, Ridings said. In such models, private investors pay much of the up-front cost of building, he said, then share toll revenues with the local mobility authority or department of transportation.

Allex said the CCRMA is determined to make sure any toll road project it pursues in Cameron County will be able to generate enough revenue that some of it can be used for non-toll roads in the county.

"If we had (the West Parkway) in place and ready to go right now, we would already have a financial mechanism in which we could have funded the Morrison Road project rather than the city doing it," he said. "We also have a policy that we will not tax our local citizens for any of our projects. These are supposed to be pay-as-you go type projects, and that’s our philosophy."

Allex said the rumor that Brownsville residents will be taxed to pay for the toll road is a "total lie."

Even if the toll road gets built and traffic revenue projections are way off, taxpayers still won’t be stuck with the bill, Ridings said. If the road is financed by private investors, then those investors are responsible for refinancing if the going gets tough, he said.

If the road is built through toll revenue bonds” a type of municipal bond used for toll projects, such as roads and bridges” then the bondholders are financially liable, Ridings said.

"If the economy goes in the tank and stays there for 10 years it’s going to be tough to meet your projections," he said. "But there have been very few tollways in the United States that have faced that financial dilemma."

The toll roads that turn into money pits

Link to article here.

The toll roads that turn into money pits

September 1, 2010
By Matt O'Sullivan
Brisbane Times

Toll road co. verging on collapse

Another company involved in a Public-Private Partnership to build transport infrastructure, River City Motorway, is verging on collapse.

Rosy traffic forecasts have turned into red faces and red ink, writes Matt O'Sullivan.

It is not easy finding people who will put Brisbane in the same league as New York. For a start, its population is less than a quarter of New York's five boroughs, which include Queens and the Bronx. In virtually every respect, the Big Apple dwarfs the Queensland capital.

Yet traffic forecasters predicted that thousands more motorists would use the new Clem7 tunnel under the Brisbane River every day than another four-lane artery in New York linking Queens with central Manhattan.

Running under the East River, the two-kilometre Midtown Tunnel has had about 80,000 vehicles passing through it each day. And it has been that way for much of the 70-year-old tunnel's life. Half a world away in the Sunshine State, well-paid traffic forecasters had predicted that 91,000 vehicles daily would use the Clem7 by now and, by late next year, more than 100,000.

Maunsell, the consultancy firm that did the forecasting for the 6.8-kilometre tunnel, was so bullish that it even predicted the Clem7 would notch 116,000 daily trips within six years. All this in a state where the locals are known for their disdain for dipping into their own wallets for basic infrastructure such as roads.

As it has turned out, fewer than 28,000 vehicles are now using the Clem7 - less than a third of the original predictions - even after RiverCity Motorway, the operator and builder of the tunnel, halved tolls and introduced other incentives in a desperate bid to entice motorists.

With those ambitious traffic forecasts now seemingly impossible to meet, the tunnel named after former Brisbane lord mayor Clem Jones is on the verge of following the lead of Sydney's failed Cross City and Lane Cove tunnels.

Yesterday RiverCity revealed the extent of its predicament when it posted a $1.67 billion annual loss and conceded it will have to work overtime to persuade its bankers to prop it up until mid-2012. By then, it is hoping against hope, the opening of the $4.8 billion Airport Link tollroad will channel more motorists into its tunnel.

It will be a tough ask to win over its syndicate of 24 banks. After all, RiverCity is burning through about $10 million in cash a month and, to cover its interest bill alone, needs traffic to double from its dire levels while at the same time it must reinstate full tolls.

The Brisbane tunnel highlights yet again a tragic episode in Australia's history of partnerships between governments and the private sector to build much-needed roadways and tunnels. Investors are now shunning so-called greenfield projects, pushing the burden directly back on to taxpayers. It has left governments, financiers and the industry grappling to find an alternative funding model.

So how did traffic forecasters, charging millions for their expert opinions, conclude that thousands more motorists would use the $2.8 billion Clem7 than the Midtown Tunnel? Put simply, the traffic forecasts here were made to fit the financial models.

John Goldberg, an honorary associate of the University of Sydney and a leading critic of the toll-road model, says the predictions for the Clem7 and other projects such as BrisConnections' Airport Link are the result of a ''work-back from the financial outcome promised to equity investors''.

''They worked out what the investor was going to be happy with in terms of rates of return, and they worked back to a set of numbers which would produce that return for investors. Such forecasts do not properly relate to the interaction of land use and transport, and it is not surprising that they are not fulfilled. Moreover, the forecasts usually correspond to congested conditions during the peak periods.''

Goldberg has brought his concerns to the attention of investors and politicians for nigh on a decade yet they largely fell on deaf ears - as RiverCity's latest woes show.

In the case of the Clem7, RiverCity's then boss, Peter Hicks, said in 2006 that the company had adopted a more conservative approach to traffic forecasting after the Cross City Tunnel debacle. ''We have always had a very careful approach to traffic forecasting,'' Hicks told The Australian at the time. ''If anything, the example in Sydney has led us to put more emphasis on traffic forecasts.''

After it was paid at least $2.75 million for its expertise, Maunsell (now AECOM) was replaced as RiverCity's traffic forecaster by IMIS, a Melbourne consulting firm that has been charged with reviewing the original modelling and estimate traffic volumes to 2016.

Maunsell, which has also done traffic forecasting for the Cross City and the Lane Cove tunnels, and the CityLink in Melbourne, has refused to comment despite the former client, RiverCity, approving of it talking to this newspaper about its off-target traffic forecasts.

Traffic forecasters were not the only ones to bank handsome payouts from the project. Fees in excess of $50 million were dished out to the legion of advisers for the public float of RiverCity - ABN Amro Rothschild pocketed $39 million in underwriting and development fees, and the now failed Babcock & Brown took home a financial advisory fee of $11 million.

Even after the well-publicised failure of infrastructure projects in Sydney and Brisbane, fund managers have doubts about whether a better model will be found. ''I think something has been learnt, but whether this translates to an improvement in the way things are done remains to be seen,'' says Will Seddon of White Funds Management. ''There is definitely a place for the private sector in these type of projects, but it probably means there has to be a rethink in the way the deals are structured.''

Meanwhile, governments will have to meet the huge shortfall in funding as investors run scared from putting equity into greenfield infrastructure projects. Kyle Mangini, the global head of infrastructure at Industry Funds Management, agrees the model of a bid team selling a greenfield tollroad project to retail investors is ''going to be off the table for a very long time''.

Toll roads that have been operating for some time are ''quite dependable assets'', but Mangini says ''when you have no history [for greenfield projects] at all it's very difficult to predict traffic with any degree of certainty''.

One option now on the lips of industry leaders is the so-called availability model used for the $750 million Peninsula Link highway in Melbourne. Unlike toll-road projects under the public-private partnership arrangement, the Victorian government will make periodic payments to the builder to maintain the 25-kilometre Peninsula Link once it is operational, regardless of traffic volume.

It also means that if motorists fail to use the Peninsula Link after it is completed in 2013 the Victorian government, rather than the private sector, ends up with a white elephant.

''What is happening is that the patronage risk is being pushed back onto government. Capital markets are saying, 'We don't want to guess what the traffic is,''' an Austock analyst, Andrew Chambers, says. ''In the case of the Sydney and Brisbane tunnels, it is the equity investors that have borne the brunt of a shortfall in traffic. It is now falling back on government or it won't get built.''

The chief executive of Leighton Holdings, Wal King, agrees the appetite for companies such as his investing in greenfield projects has been ''very much reduced'' after the recent failures. He believes projects will be able to be done under the likes of the Peninsula Link model but says governments will have to stump up more.

''The issue for government will [be whether they] have the courage to implement these under some sort of [public-private partnership] arrangement or builder-owner-operator arrangement that in fact provides a fair return for investors.''

Before a better model emerges, more pain is likely in the next few years. BrisConnections grabbed the headlines over the past two years after its failed public listing in 2008 but the project it is building, the Airport Link toll road, still must meet challenging traffic forecasts when it opens in two years.

BrisConnections, through its traffic forecaster Arup, has predicted that the Airport Link will attract about 135,000 vehicles a day just a month after it opens, rising to 291,000 vehicles in 2026. But despite the failure of other projects elsewhere, BrisConnections is sticking resolutely to the optimistic predictions for the Airport Link.

As much as the legion of advisers, traffic forecasters and companies behind the failed projects share the blame, governments, too, deserve to take much of the criticism for creating a model that enabled the group with the most optimistic forecasts to win the project bids. Ultimately, taxpayers will have to shoulder a larger burden if their demands for bigger and better public transport infrastructure are met.

Source: The Sydney Morning Herald

Pension fund buys toll operations

Link to article here.

NOTE: Rick Perry's son, Griffin, works for one of the players below, UBS. Perry also appoints the board that invests Texas public employee retirement funds who have invested millions in toll roads recently. It's a tainted web he weaves with quite a money trail to follow. Increasingly, pension funds, particularly public pension funds, are investing in risky toll road operations. When toll revenues are dipping globally, and with public pension funds needing bailouts, it defies logic to see yet more risky moves with retirees nest-eggs.

Canada Pension Agrees to Buy Intoll for $3 Billion

By Angus Whitley and Doug Alexander - Aug 27, 2010

Canada Pension Plan Investment Board agreed to buy Intoll Group for A$3.44 billion ($3 billion) to gain stakes in toll roads in Toronto and Sydney in the pension fund’s largest purchase.

The offer from Canada’s second-biggest pension manager values Intoll shares at A$1.52 each, 36 percent higher than before an initial approach was announced on July 15, the Sydney- based company said in a statement today.

The deal gives the Canadian fund a 30 percent stake in the 407 ETR near Toronto, and follows its failure earlier this year to buy toll-road operator Transurban Group. Intoll shares had fallen 9.3 percent since being created by the split of Macquarie Infrastructure Group in January and the opening takeover proposal.

“It’s good for shareholders to realize value,” said Xu Han, an analyst at UBS AG in Sydney. “The market is pretty skeptical about long-range infrastructure investments.”

Intoll agreed to the bid after Canada Pension increased the Australian dollar component of the offer. The July 15 bid had been 23 Australian cents and C$1.186 for each Intoll share. The value of that proposal had slipped to A$1.495 from A$1.535 at today’s foreign-exchange prices, Intoll said.

Shares Rise

Intoll shareholders including Abu Dhabi Investment Authority and Lazard Asset Management Ltd. can also accept stock in Canada Pension’s bidding vehicle and 22.4 cents cash a share, Intoll said. The shares today climbed 1.4 percent, the most in six weeks, to A$1.475 at the 4:10 p.m. local time close in Sydney trading.

Canada Pension will finance the takeover of Intoll with existing cash resources, according to a statement.

Canada Pension is betting it’s better placed than equity investors to profit from the toll roads as it seeks to match its long-term liabilities with assets set to deliver steady returns in economies that weathered the global recession.

Canada Pension’s joint offer for Transurban in November and a revised bid in May collapsed after they were both rejected and co-bidder Ontario Teachers’ Pension Plan sold out.

Canada Pension has been increasing investments in infrastructure in the last five years, and at the end of June had about C$6.1 billion worth of utilities in its C$129.7 billion investment portfolio, according to filings.

Australian Assets

Canada Pension owns a stake in Australia’s broadcast transmission provider Broadcast Australia and all of Macquarie Communications Infrastructure Group, which the fund bought last year for about C$1.52 billion.

The fund’s other infrastructure assets include stakes in British gas distributor Wales and West Utilities, U.S. electrical utility Puget Sound Energy and Chile’s electrical transmission company Transelec S.A.

Canada Pension has also been increasing its private equity investments and last month bid about $4.5 billion to buy British auto-parts firm Tomkins Plc with Onex Corp., Canada’s biggest publicly traded buyout firm.

Worldwide, companies have announced $203 billion of takeovers in August, including Intel Corp.’s purchase of security-software maker McAfee Inc. and BHP Billiton Ltd.’s $40 billion hostile bid for Potash Corporation of Saskatchewan Inc. Those deals are set to make this month the busiest of the year, according to data compiled by Bloomberg.

Westlink M7

Intoll was formed in January after Macquarie Infrastructure split into two in a bid to buoy valuations. As well as the stake in the 108-kilometer Canadian highway, Intoll owns 25 percent of the Westlink M7, a 40-kilometer toll road in Sydney’s west. Intoll said today it swung to a profit of A$1.51 billion in the 12 months to June 30 from a year-earlier loss of A$1.7 billion.

“The listed market has significantly undervalued Intoll stapled securities over an extended period of time,” Chairman Paul McClintock said in the statement.

To boost Intoll’s value, McClintock said the company had considered a dual listing on the Toronto Stock Exchange as well as buying an additional 10 percent of the 407 ETR.

“It is not clear that these strategies would deliver the same certain return of value,” he said in the statement. Intoll directors recommend shareholders opt for Canada Pension Plan’s cash offer, he said.

A completed sale of the business to the Canadian fund would mark an exit for Macquarie Group Ltd., Australia’s largest investment bank and the biggest shareholder in Intoll, according to Bloomberg data.

States turn to tolls to fund roads

Link to article here.

NOTE: Peter Samuel makes his living off toll roads and so does HNTB. Both seem to want states to continue to starve the gas tax so they can force more toll roads, particularly using public private partnerships (PPPs) that give toll operators monopolies and guaranteed profits that charge toll rates of 75 cents a mile like two deals in Dallas. The Owner-Operator Independent Drivers Association has it right, tolling existing roads and bridges is tantamount to DOUBLE TAXATION.

States turn to tolls to fund roads
By Larry Copeland, USA TODAY
August 3, 2010

Toll roads are increasingly emerging as the go-to strategy for states and metro areas eager to build and maintain expressways amid a recession that has battered government budgets.
"There's more interest in tolling today than there has been" in more than three decades, says Jack Finn, national director of toll services with the Kansas City-based consulting firm HNTB.

A traditional main source of road funding — gasoline taxes — has eroded as motorists drive fewer miles and more fuel efficient vehicles. The Obama administration opposes increasing the 18.4-cent-per-gallon federal share of the gas tax. It has been at that level since 1993. Transportation Secretary Ray LaHood says that public-private partnerships and tolling are additional ways to support transportation projects.

"There is something of a trend for local governments, especially state, but also counties and in some cases, metropolitan areas, to do tolling," says Peter Samuel, editor of, a newsletter on tolling. "It's resistance to raising the gas tax."


GAS TAX: A break at the pump
OPINION: Gas tax key to ending oil addiction
Local governments are getting the message. "There's a paucity of money at the state and federal level," says Lloyd Robinson, a Fredericksburg, Va., official working on a new toll road near Interstate 95. "If we are going to help ourselves, we need to raise more revenue. One of the ways to do that is to have toll roads."

Among recent projects:

• The governors of Illinois and Indiana in June signed an agreement to move forward with the Illiana Expressway, a toll road that would connect Interstate 65 in Indiana with Interstates 55 and 57 in Illinois.

• Authorities in Louisville and southern Indiana recently said tolls could generate more than half the $4.1 billion needed to build two new bridges across the Ohio River and refurbish a major highway interchange. Drivers currently pay no toll.

• Tolling is funding three major road projects under construction or planned in the Washington, D.C., area: the Inter-County Connector, an 18-mile, 6-lane limited access road in Maryland; four new lanes on a 14-mile stretch of the Capital Beltway, and converting two express lanes to three on 28 miles of the I-395/I-95 freeway, both in Northern Virginia.

• North Carolina, which began construction last year on its first modern toll road, is spending more than $6 million studying how to pay for much-needed improvements to a 182-mile stretch of Interstate 95 in the state. "We have to wait for the study to be completed so we can have an educated conversation about whether tolling is an option," says Greer Beaty, spokeswoman for the state transportation department.

• Birmingham, Ala., Mayor William Bell is considering tolling as a way to reopen a 74-year-old bridge over Lake Purdy that's been closed since December. Under a $4 million plan, a private company would rebuild Grants Mill Road bridge as a toll bridge at no cost to the city.

• Transportation officials in the Fredericksburg, Va., area last month moved ahead with a plan to build a new I-95 interchange and toll road. Tolls would pay about half the $300 million cost, says Robinson, administrator of the Fredericksburg Area Metropolitan Planning Organization.

• States are pressing Washington to change federal rules that limit their ability to toll on interstate highways. "In the last two or three months, there's been a real surge of interest in this topic," says transportation policy consultant David Hartgen, of the University of North Carolina-Charlotte.

"Public officials are coming to the realization that building the interstates was the easy part," says Patrick Jones, executive director and CEO of the International Bridge, Tunnel and Turnpike Association. "It's going to cost way more to repair and rehabilitate it, and the funds are simply not available."

Tolls for the new or proposed projects vary: 25 cents per mile during rush hour on the first section of the Inter-County Connector; $3 each way across the bridges in Louisville, and $1 on the Fredericksburg road.

New toll projects usually generate fierce opposition. In Louisville, toll opponents staged rush-hour protests. "We are opposed to tolls on existing bridges," says Shawn Reilly, co-founder of Say No to Bridge Tolls. The Owner-Operator Independent Drivers Association, a trucking group with about 154,000 members, also opposes adding tolls on existing roads and bridges. "We consider that double taxation," spokeswoman Norita Taylor says.

TxDOT uses eminent domain to benefit private firms

Link to article here.

TxDOT use of eminent domain benefits private firms


WFAA-TV - Dallas
Posted on August 2, 2010 at 10:08 PM

BEDFORD — The Texas Department of Transportation  is using its power to condemn private land so it can embark on a massive rebuild of Highway 183, also known as Airport Freeway.

The $2.1 billion project is called the North Tarrant Express (NTE). It will offer a mix of free lanes and toll lanes. For 50 years, toll profits will go to a private company.

The power of eminent domain lets TxDOT compensate landowners for taking the property it needs, and it is already staking its claim to more than 300 pieces of private property standing in the way.

But some people are raising questions about using the government's power to condemn land for the benefit of a private company.

In Bedford, the NTE will push all the way to the front door of Rex Lee's Vietnamese restaurant, slicing right through the Chili's next door. Lee’s landlord wants to move his restaurant within the mall, but Lee estimates that will cost him $200,000.

What makes the NTE unique is the use of private companies to finance 75 percent of the cost. In exchange, a Spanish company called Cintra can charge tolls for 52 years. That means private companies directly benefit from the state's power to take private land.

"First and foremost, this is still a TxDOT project. We're involved every day in the management of this project, and we will be for 52 years,” said TxDOT spokesman Tony Hartzell.

Attorney Kevin Maguire is an expert in eminent domain at the law firm of Strasburger & Price. "I think all Texans need to be vigilant to make sure that we are not delegating the power of eminent domain to third parties of any nationality,” he said.

Maguire says there is no evidence of that -- yet. But he says property owners need to know their rights when going up against TxDOT.

And even renters like Rex Lee may be entitled to compensation when the NTE forces them to move.

But for a small business owner affected by the uncertainty of a giant transportation project there are some concerns you can't put a dollar figure on.

"You think about it at night, before you go to bed," Lee said, "so  it's a little bit of stress involved.”

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