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.

States

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

California

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.

Colorado

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.

Florida

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

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.

Texas

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.

Virginia

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.

Airports

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.

Conclusion

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.

More public subsidies for Austin toll projects

Link to article here.

Note the massive amount of taxpayer subsidies for these LOSER toll projects. If these were well-conceived toll projects that could pay for themselves, that would be one thing, but using taxpayer money to build them only to charge taxpayers AGAIN to use them, is clearly an egregious DOUBLE TAX.
___________________________________________________________________

Friday, October 1, 2010

Central Texas gets $153M for transportation projects

Austin Business Journal


The Texas Transportation Commission has approved $153 million for work on several toll roads on Mopac, U.S. 290, U.S. 183 and others.

The Texas Department of Transportation and the Central Texas Regional Mobility Authority will use grants for work on:

 

Manor Expressway project (126.7 million)
the MoPac Improvement Project ($5.4 million)

Oak Hill Expressway


"The Mobility Authority Board, the Capital Area Metropolitan Planning Organization (CAMPO) and the Texas Transportation Commission all came together to prioritize funding for these vital Central Texas Projects," says Heiligenstein. "With so many unmet needs statewide, getting scarce dollars isn't easy these days. We made a good case that Central Texas was in critical need of these funds, and we came to the table with a promise of local funding in the form of toll revenue bonds. As a result, we were rewarded with $153 million in grants."

The $500 million Manor project will create a toll road from U.S. 183 on U.S. 290 to Parmer Lane. It is also being paid for through issuance of toll revenue bonds or other creative financing methods, according to a press release. Due to funding limitations, TxDOT will provide the grant money over a three-year period between 2012 and 2014.

The Mopac Improvement Project proposes to construct express lanes along an 11-mile stretch of Loop 1 from Cesar Chavez Street downtown to Parmer Lane. The TxDOT grant will pay for an environmental study that was halted in 2007 due to funding issues.

The Oak Hill Expressway seeks to alleviate traffic at the "Y" on U.S. 290 in Oak Hill. The grant money will be used to complete a comprehensive environmental impact statement that would allow for construction of the expressway.

The 3.5-million Manchaca Expressway project proposes four tolled lanes and non-tolled lanes connecting Mopac in southwest Austin to FM 1626 and I-35. The latest grant money will be used to complete an environmental impact statement.

The eight-mile Bergstrom Expressway project will make improvements to U.S. 183 South from Springdale Road to Patton Avenue.

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.

DO YOU WANT TOLL BOOTHS ON I-35?
SAY ‘NO’ TO DOUBLE TAX TOLLS!

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: www.TexasTURF.org

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 rights...is 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 pocketbook...it 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.”

Farm Bureau won't back Perry due to Trans Texas Corridor

Link to article here.


Texas Farm Bureau declines to endorse in governors race

 4:38 PM Wed, Sep 22, 2010 | Permalink | Yahoo! Buzz
Wayne Slater/Reporter -- Dallas Morning News      Bio |    E-mail  |  News tips
The Texas Farm Bureau -- which has always endorsed Rick Perry  in the past -- voted today not to endorse anybody in the governor's race. The decision by the bureau's political committee is a victory of sorts for Democrat  Bill White. Perry was state agriculture commissioner -- and the Farm Bureau's Friends of Agriculture fund endorsed him twice as the state's agriculture chief and in his last two races for governor. Since it began making endorsements in 1990, the bureau has always picked the Republican at the top of the ticket. But not this year. Spokesman Gene Hall says the board voted today to stay neutral in the race. Otherwise, the bureau is pretty much endorsing Republicans down the ballot in statewide races. Hall says he'll leave it to the campaigns themselves to interpret the decision.

Both Perry and White appeared earlier this year at the Farm Bureau's convention. White directly addressed one of the bureau's top issues -- eminent domain -- in his address. Perry didn't. In the Republican primary, the Texas Farm Bureau endorsed Kay Bailey Hutchison over Perry because of his land-consuming Trans-Texas Corridor project and his 2007 veto of an eminent domain bill favored by farmers but opposed by business. Moreover, a Perry campaign spokesman dismissed the Farm Bureau as "an insurance company that supported the (federal) bailout." Avoiding the bureau's top issue of eminent domain at its summer convention, Perry delivered a patriotic speech underscoring anti-Washington and pro-states rights themes.

Fuel tax theft? Dozens of gas pumps not inspected, out of compliance under Staples

To see more about the lack of gas pump inspections and pumps that are out of compliance, go to Hank's web site here (scroll down to the video section called "Hank's Channel").



CBS 19 News in Tyler, TX, did an expose' on Texas Agriculture Commissioner Todd Staples' widespread lack of timely inspections of gas pumps. Staples' opponent, Hank Gilbert, who helped establish TURF, found dozens of gas stations that have outdated inspection stickers and/or are out of compliance, and he found many that had NEVER even been inspected EVER with NO sticker at all (meaning they're NOT paying the state ANY gas tax revenues, they're completely "off the grid" so to speak)! Hank even found one that hadn't been inspected since Rick Perry was Agriculture Commissioner in 1997! Such a shoddy inspection process potentially costs taxpayers millions in lost gas tax revenue badly needed to fix our roads and keep them FREEways. Staples, like Perry, seems all too happy to starve the gas tax so they can push TOLL ROADS, which cost the taxpayers 10-1,000 times more per mile than gas tax.

Watch the CBS 19 TV report here.

Get a load of this...at the exact same time Hank was holding a press conference to expose this neglect, someone from the Ag Dept shows up across the street to FINALLY inspect the pump that hadn't been inspected since 1997. He says those that aren't licensed don't get inspected and that there's no mechanism in place for them to know if a station is unlicensed so they essentially stay "off the grid" unless they get complaints about it. You bet Todd Staples heard complaints about this pump and rushed his guy out there to update those stickers (too bad for him Hank and the TV cameras were there, too!).



Check out the lack of stickers and expired inspection stickers in just ONE county here.

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

TxDOT deception, attempt to change the law to skirt open records law

Link to article here.


TXDOT data reveals San Antonio's worst spots for wrecks


    The Riverwalk District, the Six Flags amusement park and a major suburban shopping mall are among San Antonio's worst hot spots for wrecks, a Texas Watchdog analysis finds.

Sun Sep 5 06:56:00 2010 CST
By Jennifer Peebles

Remember the Alamo – and don’t forget to use your turn signal as you drive past it.

The area around San Antonio’s popular Riverwalk District – an attraction for locals and tourists alike -- is one of the three most wreck-prone spots in downtown San Antonio and one of the six most wreck-prone spots in all of Bexar County.

That’s according to a Texas Watchdog analysis of nearly three years’ worth of wreck data from the Texas Department of Transportation – data that our partners at WOAI-TV Channel 4 in San Antonio fought for two years to access under state public records laws.

Even though the Riverwalk and its restaurants, shops and scenery are on an all-pedestrian level below that of the city’s automobile traffic, much of the touristy surrounding area – and the several blocks stretching north to Travis Park -- have one of the highest concentrations of wrecks in the county for 2007, 2008 and most of 2009. And the most wreck-prone spot in San Antonio is in that neighborhood, near the corner of St. Mary's and College streets.

DowntownMost of the Bexar County wrecks in TxDOT’s database for the given time period included latitude and longitude coordinates of the crash, recorded by the police officers who investigated the wrecks. At the request of WOAI, Texas Watchdog used special mapping software to plot the wrecks on a map and analyze the results to find the areas with the highest densities of wrecks.
Aside from the Riverwalk area, another major wreck hotspot was a section of the South Pan Am Expressway – a conjoined section of interstates 10 and 35 between West Martin and West Commerce streets, not too far from Christus Santa Rosa Hospital -- as well a third area around Methodist Hospital and Interstate 35.

The most wreck-prone spots in Bexar County’s suburban areas were the Loop 410 exit for Ingram Park Mall, at Wurzbach Road; the intersection of I-10 with Loop 1604, near Six Flags Fiesta Texas theme park; and the U.S. 281 junction with Loop 1604.

 

WOAI investigative reporter Brian Collister, with whom I serve on the board of the Freedom of Information Foundation of Texas, first asked TxDOT for access to its wreck database two years ago.

Mall wrecks
I’ll let Brian tell how it played out from there. Here’s an excerpt from a blog post he wrote earlier this year:

My fight to get these records started back in 2008 when I filed an open records request for the entire database. The Attorney General ruled it was public, but TXDOT challenged the ruling in court. It feared the ruling would mean that ambulance chasing attorneys and chiropractors would have access to the names and address of crash victims. (Ironically, they already get that information from our local police departments.)

To calm those concerns, our attorney reached a deal with TXDOT. The state would provide the data without any personal information and we would withdraw our request. But for some reason, the agency at the time was slow to finalize the deal... the reason now is clear.

This is when TXDOT decided to get sneaky.

Late one Friday afternoon last March, while the lawsuit was still going on, I stumbled across a bill filed in the legislature that would make the entire crash database secret!

It turns out that TXDOT officials had quietly gone to Senator John Carona of Dallas, the head of the Senate's Committee on Transportation and Homeland Security, and begged him to file a bill to ban release of the data - forever. The TXDOT officials decried the AG ruling and claimed it would spell disaster for accident victims who will be further besieged by rogue lawyers and doctors.

But TXDOT conveniently forgot to tell the senator about our lawsuit and the compromise it had agreed to. It also conveniently forgot to tell our lawyer that they had gone behind our back in a shameful attempt to shut off the data with a new law.

Once we learned what was going on, we sprung into action. I testified to the senate committee along with representatives of several open government and media groups. Luckily, the lawmakers listened and the governor eventually signed a bill making the data public - minus the personal information.

So why would TXDOT fight so hard to try and keep this information from you? I don't know and could never get an honest answer from anyone at TXDOT.

I’ll add that FOIFT was among the open government groups that pushed for the release of the information. You can also read another summary of Collister's fight for the TxDOT wreck database, and all its twists and turns, written by the San Antonio Express-News' John Tedesco.

TxDOT changes rules for MPOs, does little to give local control

Link to article to here.

Bottom line, we read every single rule change and the Governor and his Transportation Commission still have the final say on MPO allocations and MPO plans and Rural Planning Organizations are not even legally established in the Transportation code and yet TxDOT is adopting rules for them!

TxDOT approves rules to strengthen MPOs

By Jon Vanderlaan, This email address is being protected from spambots. You need JavaScript enabled to view it. Plano Courier

Published: Thursday, September 2, 2010 3:23 PM CDT

Texas’ Metropolitan Planning Organizations have secured their authority in planning decisions with new rules adopted by the Texas Department of Transportation.

According to news release from TxDOT, the rules will enhance the role citizens and communities play in planning the state’s transportation system.

Michael Morris, director of transportation for the North Central Texas Council of Governments, which is the Dallas-area MPO, said the rules changes were based on House Bill 300, which did not pass in the last legislative session.

  Morris said the biggest change is authority that previously was rooted in policy is now written in rule and much more difficult to change.

“I think clearly TxDOT got a message from the legislature that they want metropolitan planning organizations to be recognized as entities within each of the metropolitan regions,” he said, “to be decision makers when it comes to transportation questions.”

One of the best examples of the changes, Morris said, is the allocation of Surface Transportation and Environment Planning funds.

Previously, programs to benefit from STEP funds were picked in Austin, Morris said, but now 50 percent of those revenues will be available to the Regional Transportation Council to decide what projects will benefit.

Rep. Joe Pickett, D-El Paso, said in a released statement the changes put more control in the hands of leaders, planners and citizens of a community, who better understand the needs of the communities.

“For the first tiem, the new rules make sure that local decisions are made in each community across the state, rather than handed down by officials in Austin,” he said.

According to a TxDOT news release, the rules will allow MPOs to develop long-, mid- and short-range transportation plans.

The process also will include the use of an extended cash forecast to provide additional flexibility in planning.

Rep. Kirk Watson, D-Austin, said in a released statement the rule changes put control in the hands of MPOs and will help them do a “great” job for communities.

“Under the new rules, MPOs will be better armed with the information they need to craft plans that transparently and accountably address the infrastructure needs in their communities,” he said.

The new rules may also help the RTC allocate Proposition 12 bonds that were authorized by the legislature in 2009, Morris said.

“It’s being made clear that the elected officials on the RTC want the Prop 12 fund to be allocated,” he said, “and we have the foundation now for that given the rulemaking that has been adopted.”

The $2 billion in bonds that were authorized are backed by state revenue and will go toward highway improvements, according to the TxDOT website.

Morris said the formula for allocation of those funds was always a question with the RTC -- TxDOT districts and MPOs identified more than $8.9 billion in possible projects to benefit from the funds.

Rural Planning Organizations also were officially recognized with the rules changes, which Morris said is important because of the implications of metropolitan planning in rural areas.

“Often the visions in the metropolitan regions cross over into the rural,” he said.

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
www.headlineauto.co.uk

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

By SHERYL GAY STOLBERG and MARY WILLIAMS WALSH


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.

Superstreet fixes proposed for Austin highways

Link to article here.

There's already a "superstreet" re-work of intersections under construction on US 281 in San Antonio with another one planned for parts of 1604 West. We'll let you know how well it works when it's completed later this month.

Light changes aim to ease jams on Texas 71

TxDOT also adding eastbound lane to portion east of Austin airport.

By Ben Wear
AMERICAN-STATESMAN STAFF

Published: 11:04 p.m. Tuesday, Aug. 31, 2010

The Texas Department of Transportation, lacking the sort of big cash it takes to eliminate stoplights on Texas 71 by building overpasses, will turn the thoroughfare into a "superstreet" just east of the Austin airport.

The counterintuitive changes — drivers wishing to turn left from FM 973 onto Texas 71 would instead turn right and then make a U-turn about 300 yards down the road — will actually allow many more cars to pass through the area, officials said Tuesday. The work is scheduled to be completed by 2012 .

And in the short term, TxDOT crews wielding paint and new signs will add a third eastbound lane on Texas 71 where it currently narrows to two lanes at FM 973. Currently, that third, outside lane allows only right turns onto southbound FM 973. That work is expected to be completed by October.
"If you can't do what you know to be the ultimate fix, then don't stop looking for other fixes," said state Sen. Kirk Watson, D-Austin, at a news conference announcing the changes.

"Superstreets" is a catchall term for a variety of lower-cost fixes that are intended to increase traffic flow through clogged intersections. In the case of Texas 71 and its two intersections with FM 973 (which doglegs as it hits Texas 71 east of Austin-Bergstrom International Airport), TxDOT plans to restrict left turns.

Two new signal lights on Texas 71 would allow those making U-turns to easily complete their turns. But officials say that when the $1.6 million project is completed, drivers on Texas 71 in both directions would encounter a green light a greater percentage of the time and that at least 45 percent more cars would pass through those intersections.

Given that 60,000 cars a day pass that spot on Texas 71, according to a 2010 count by TxDOT consultant Pape-Dawson Engineers , that would make a huge difference for commuters, particularly during the morning and evening rushes.

Kent O'Brien , a senior vice president with Pape-Dawson, said the changes will also substantially improve, if not eliminate, long backups that occur each afternoon on southbound FM 973 at Texas 71.

About 11,500 vehicles a day pass Texas 71 on FM 973, O'Brien said.

Watson and Carlos Lopez , the Austin district engineer for TxDOT, said the agency is looking at other busy Central Texas highways, such as Loop 360 and U.S. 290 in Oak Hill, to see what "superstreet" changes might decrease congestion.

Ogden floats idea of as tax increase to pay off DEBT

Link to article here.

NOTE: This is pure lunacy! Lawmakers have failed to properly fund highways for at least the last 15 years and they've refused to do it using the most affordable option, gas taxes. So they turned to borrowing and incurring more debt, which costs infinitely more with interest in the long-run. Now that they're in a hole that's too big to climb out of, the debt hole is totally irresponsible and unsustainable, they are finally proposing a gas tax increase but not to fix our roads, it's to retire debt and to bail them out for their BAD decisions.

Proposal gives voters a say on gas-tax increase

Peggy Fikac - Peggy Fikac
Web Posted: 08/30/2010 12:00 CDT


AUSTIN — If you're willing to pay a little more for gasoline for highway improvements, Senate Finance Committee Chairman Steve Ogden wants to give you that chance.
The Bryan Republican isn't proposing a straight-ahead state gas-tax increase. Instead, he plans to offer an amendment to the Texas Constitution to say lawmakers can raise the gas tax a few cents a gallon to pay off debt service for road bonds financed through the highway fund.

The proposed amendment, which Ogden plans to push in the coming regular legislative session, would require a two-thirds vote from lawmakers plus voter approval statewide.

“Going with a constitutional amendment does a couple of things. It provides some political cover for people who don't want to be responsible for raising taxes, and it gives the voters a legitimate option: If you want us to continue to borrow money to improve the highways, this is how we propose to pay for it,” Ogden said. “And whatever their answer is, I'd accept.”

Read the rest of the story  here.

Hoosiers to pay big for toll violations

Link to article here.

NOTE: The problem of unpaid tolls is at epidemic proportions. Drivers cannot afford to pay extra to get around. Rather than government using our transportation taxes wisely and building public roads freely accessible to all, we're fracturing our road system into one for the "haves" and one for the "have nots." Also, governments are making a killing off toll violations, more than the tolls themselves. It's a racket. Especially since the advent of electronic toll collections (fraught with problems and mistakes in billing), innocent people are the target of punitive fines than can ill afford.

Tollway to go after Hoosiers for unpaid tolls, fines

August 25, 2010

The Illinois Tollway has targeted about 116,000 Indiana motorists who owe an estimated $7 million in unpaid tolls and fines due to a two-year lapse in issuing violation notices.

The problem is prompting tollway directors Thursday to hire an outside auditor to review the agency's electronic toll collection system.

The problem started in May 2008 when the tollway and its contractor, Texas-based Electronic Transaction Consultants Corp., turned off the system for issuing violation notices to Indiana motorists, officials said Tuesday.

The shutdown was intended to reprogram equipment to better differentiate between multiple types of license plates with the same numbers.
But when the system was restarted two months later, "filters" were left in place that kept some notices from being sent out, a mistake not caught until June, officials said.

The result was that some Hoosiers didn't get notices for racking up about 1.9 million violations.

Tollway Executive Director Kristi Lafleur said she is recommending the audit to ensure that other violators aren't being missed. It was only fair to toll-paying motorists that the agency go after all those unpaid tolls and fines, she said.

Tollway Director Bill Morris said administrators were "frustrated" that the mistake had occurred and that officials hoped to put checks in place to prevent more problems.

The tollway incurred a similar backlog of tolls and fines during a 13-month period ending in 2007 when no toll violations were sent out during a change in contractors.

Hundreds of thousands of drivers were shocked to get steep fines for violations that allegedly occurred at least a year earlier.

Tollway policy is to send notices to all violators accumulating three or more toll violations within a two-year period. Violation notices require payment of all missed tolls, and $20 fines are assessed for every unpaid toll.

-- Richard Wronski

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
Express-News
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

Toll and MPO woes

The trouble with tolls and MPOs

By Terri Hall
Express-News Blog / Houston Examiner
Aug 31, 2010

Last week, lawmakers got an earful about federally-mandated transportation planning boards called Metropolitan Planning Organizations (or MPOs). It seems neither the citizenry nor the boards themselves are happy with their past interactions with TxDOT. Though MPO Directors in both Dallas and Houston said their working relationship has improved since TxDOT's been on the hot seat (several scathing audits and sunset review), the taxpayers can't exactly say the same.

The major complaint: the use of bullying, threats, and intimidation to push toll roads despite massive public opposition.

Who's really in charge?
TxDOT rules dictate that "funding levels are estimated in cooperation with TxDOT." That's a real problem when many MPOs want to resist tolling, but have to rely on TxDOT's numbers and its heavy reliance on tolling and forecasts that have been consistently unreliable. If an MPO would prefer to use gas tax or sources of funds other than tolling to project future funding scenarios, it should have the flexibility to do so, but it doesn't under current rules.

Examples of threats and intimidation to push unwanted toll roads:
- Members of the Capitol Area MPO board admitted TxDOT strong-armed them into voting for toll roads their own constituents didn't want or funding for other projects would be pulled.
- TxDOT also threatened to withhold funding for a road project as well as joint rail relocation study with New Mexico when the El Paso MPO voted to reject toll roads by electing NOT to create an RMA.
- TxDOT saw to it local transit board members were removed from their positions on the Bexar County-San Antonio MPO for voting against toll roads (a perceived offense to TxDOT for not being team players and advancing TxDOT's toll agenda).
-The Governor himself threatened to call repeated special session unless lawmakers gave him the pro-toll transportation bill he wanted (when lawmakers attempted to put the brakes on the sale of Texas' public roads to private entities).

This behavior MUST stop before any progress can be made with restoring the public trust.

Taxation without representation

There are plenty of concerns with how MPOs govern as well. They're just as tone-deaf to the public as TxDOT. Only elected officials should have voting powers on MPOs. Since MPOs have the power to allocate billions in tax money, to allow un-elected bureaucrats voting powers is tantamount to taxation without representation. The San Antonio-Bexar County MPO, in particular, egregiously lacks representation of taxpayers' interests in this way with nearly half of its members being un-elected bureaucrats. Though the federal law creating MPOs allows TxDOT and transit officials to be a part of MPOs, it should be limited to an advisory capacity only.

Not only is there a conflict of interest in voting for its own projects and to vote itself more money (through tolls, etc.), it already possesses the power to approve all projects through the Texas Transportation Commission, which already results in most MPOs deferring to TxDOT in formulating and voting on MPO plans. For all the talk of "local control," TxDOT steers and often controls MPOs, not the local officials who sit on these local transportation planning boards.

Ignoring the public outcry
All of the above notwithstanding, MPOs consistently vote against the public input when making transportation decisions. When hundreds of concerned citizens show-up on their own dime and take the time to wade through hundreds of pages of MPO plans and do their due diligence to be heard on multi-billion dollar tax decisions, and when federal law requires MPOs to take into account the public input, and an MPO STILL votes to toll roads when the overwhelming public input begs them to do otherwise, it demonstrates the total disregard for the public interest if not the corruption of these boards.

MPOs, like TxDOT, view public comment as a box to check, then proceed to completely ignore the public feedback, especially regarding toll projects. This MUST be remedied in order to fix the completely dysfunctional state of transportation funding and decision-making in Texas. It's forced the citizens to turn to the courts and use other means to seek remedies (causing more delays).

It's the Legislature's duty to reform these entities and restore the public interest. The public cannot continue to be kicked to the curb if the goal is to move transportation forward. Failure to recognize this will only continue the gridlock.

Money and the toll regime
Something must be changed in regards to how projects are marked in an MPO Transportation Improvement Program (or TIP) and other plans. TxDOT and tolling entities rig the planning process by exploiting the federal requirements that plans be "financially-constrained." Since they endlessly claim there's no money to build roads, these entities almost exclusively mark projects "toll" (instead of using other funding scenarios to keep the plan financially-constrained) to get a project into the plan. The Federal Highway Administration has said that as long as a project is marked "toll" in an MPO plan, it will only be considered for tolling, not as a non-toll project. So this locks in a toll scenario for nearly all new capacity to Texas roads for the next 25 years.

This practice not only violates the National Environmental Policy Act (or NEPA), which requires that all alternatives be considered, but neither the public nor the Department can wrest the project away from a tolled scenario once the toll entity becomes the project "sponsor." A state law passed in 2007 gives toll agencies the right of first refusal on toll projects; therefore, reverting a project back to a non-toll road after its been marked toll is near impossible. The bureaucrats want access to your wallets and they'll stop at nothing to do it.

Considering many toll entities are conducting their own environmental studies, the control remains in the hands of those who stand to benefit directly from a toll alternative emerging as the "preferred alternative" under NEPA. This is the fox guarding the henhouse and takes virtually all decision-making on toll tax decisions out of the hands of the public and their elected representatives.

The crystal ball syndrome
While MPO long-range plans ought not to have wildly overoptimistic plans that are way outside the realm of reasonable funding sources, requiring MPOs to show anticipated funding for projects 20 years from now is completely flawed. The Texas Legislature funds all state programs in two-year budget cycles. Local governments often operate using a single budget year. Yet, MPOs have to show funding for projects 20 years out in order to even start ANY level of work on a future road project? It makes no sense. Just think of the changes in how we live, work, and play have impacted the way we travel in the last 20 years, how can anyone accurately predict the future of transportation funding so far into the future?

An entity ought to be allowed to conduct environmental work and preliminary engineering for a project without having to show funding for construction which could be years, even decades away. Both engineering and environmental review need to be underway if not completed in order to even have realistic project cost estimates for which an MPO can properly program funding.

Federal rules and how TxDOT and toll agencies exert control over MPOs are just a few of the many areas that plague our broken transportation system. Citizens need to stay engaged to ensure reforms are FINALLY enacted in next year's legislative session or we'll hopelessly remain in gridlock. 

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