Link to article here.

Commerce chief pushes for 'North American integration'
Communiqué shows SPP far more than just 'dialogue' with Canada, Mexico
By Jerome R. Corsi
World Net Daily
March 24, 2007

Commerce Secretary Carlos M. Gutierrez

While the Bush administration insists the controversial Security and Prosperity Partnership is just a dialogue with Canada and Mexico, a State Department cable released to WND shows Commerce Secretary Carlos Gutierrez pressing to implement major trilateral initiatives to help "capture the vision of North American integration." The cable was among some 150 pages of State Department SPP documents recently released to WND under a Freedom of Information Act request.

Howard Phillips, who has formed a coalition to block development of a "North American Union" and formation of NAFTA superhighways, told WND the document "makes clear that the agenda of SPP is to pursue major economic integration that redefines U.S. businesses into a 'North American' definition."

"By leading with economics, SPP is crafting a North American regulatory structure that transforms U.S. regulations by 'harmonizing' them with Mexican and Canadian regulations, all without specific congressional approval," said Phillips, chairman of the Conservative Caucus.

The cable notes Gutierrez opened the discussion by stressing that the July 23, 2005, "Report to Leaders" needed "to show results" that would be "enduring and create an on-going process."

Gutierrez suggested each working group should propose one "big ticket" issue, rather than the "50-60 smaller initiatives" that were then in the SPP "matrix," allowing the "SPP ministers" to capture the attention of the "SPP leaders" with major North American integration goals that were both tangible and important.

"This memo gives us an important 'behind the scenes' look at the trilateral bureaucratic process that gave rise to the "Report to Leaders.

The 2005 "Report to Leaders" on the SPP website, Phillips noted, resulted from a detailed process of trilateral bureaucratic meetings that led to cabinet-level discussions within the three governments. The end result, he said, was for the report to "focus on the major SPP working group initiatives that could advance the goal of North American integration."

Phillips contended a "close reading of the document makes a lie of the SPP 'myth vs. facts' contention that SPP is just a 'dialogue.'"

"The document quotes Canada's Ventura as stating that the three countries should prepare a joint document declaring their trilateral intention to 'integrate' a list of industries, including automobiles, pharmaceuticals, textiles, furniture, and steel," he argued. "Ventura said the more 'trilateral integrated' industries that could be listed, the better."

At the meeting, Gutierrez proposed that the SPP ministers think in terms of a trilateral "integrated" auto industry creating a "Made in North America Vehicle by 2009." He also suggested announcing "an IPR (Intellectual Property Rights) Violation Free Zone by 2010" and that SPP ministers should hold weekly conference calls to advance the agenda.

"The economic route being pursued behind closed doors by SPP working groups is a replay of the exact stealth route taken in Europe," Phillips noted.

"Right now the EU is celebrating with a series of television commercials the evolution over a 50-year period from an initial coal and steel agreement to a full-fledged European Union regional government with the euro as a regional currency," he said.

The recently uncovered State Department memo, Phillips added, makes clear the same bureaucratic process of regional integration is being implemented in North America within working group and minister meetings that are closed to the public and the press.

"The State Department memo also makes clear that Gutierrez is a major moving force driving the North American integration agenda for the Bush White House," Phillips said.

Supporting Phillips' contention, the State Department cable noted in the last paragraph the meeting got off to a slow start, but under Gutierrez's leadership "it resulted in concrete ideas and direction for the working groups."

Link to article here.

Manufacturing News, Source : The Manufacturer US
Published : 22 Mar 2007 12:40

Published March 21, 2007 in Knowledge@Wharton
Little by little, Spanish companies have been moving into Texas, and they are beginning to enjoy the benefits. In the infrastructure sector, Ferrovial, through its highway subsidiary Cintra, has become a strategic partner with the government in developing the Trans Texas Corridor (TTC-35).

OHL, the construction and service company, has acquired two construction firms. BBVA bank has just acquired Compass [Bancshares], whose headquarters are in Alabama, but which has a larger presence in Texas. However, this is only the beginning. Construction firms, engineering companies, road construction companies and banks, among others, have Texas, the paradise of American oil, in their sights. Their goal is not oil wells but infrastructure, and the growing power of America’s Hispanics.

During the 1990s, large Spanish companies crossed the Atlantic in an effort to conquer Latin America with a vigor that was unknown until then. At that time, their business odyssey was compared to the heroic effort made by Christopher Columbus five centuries earlier. Spain had once more found its El Dorado in Latin America -- a territory that, during the era of the Great Spanish Empire, extended as far as New Mexico, as Spain conquered most of what is now the southern part of the U.S.


Now history appears to be repeating itself. Attracted by the growing Hispanic presence, Spanish companies have begun to extend their tentacles throughout the U.S., especially in Texas. Why has that market attracted so much attention among Spanish companies?

“In the case of the banks, BBVA is looking at a growing and attractive market,” notes David Allen, professor of strategic management at the Instituto de Empresa. “Many of their potential customers have ties to Latin American markets where Spanish banks already have a presence. In this context, Spanish banks have considerable experience. They have had success offering their services to the same segments of customers in Spain.”

A little more than a decade ago, Latinos represented 27.6% of the population of Texas. In 2025, they are projected to exceed 10 million people, or 37.6% of the population. It’s no accident that Texas, along with California and Arizona, has become the new center of attraction for the Latino population, given the opportunities available for financial institutions, especially those that have an infrastructure on both sides of the border, such as BBVA.

In addition, the American Southwest has become the new economic engine of the United States. Markets in that region are growing at an average rate of one point above the rest of the country. They enjoy lower taxes, a greater supply of jobs and lower housing prices. These factors combine to attract companies – not just foreign companies, but U.S. companies – to the detriment of Northern states.

Looking Beyond Hispanics

The Latino population is a magnet for Spanish investors and a possible platform for jumping into neighboring states. In addition, Texas offers other attractions, including its ambitious plan for infrastructure development that offers opportunities to construction firms, road builders, engineering companies, and companies that provide technology, electricity and railroad equipment.

Reflecting this interest, a delegation of big Spanish companies traveled to Texas last February to learn first-hand about the state government’s infrastructure plans, budgeted at $150 billion.

The list of companies that spent tour days analyzing their business options in Texas includes construction and infrastructure companies such as ACS, FCC, Acciona, Ferrovial, OHL, Sacyr Vallehermoso, Azvi and Elsamex; technology firms such as Abengoa, Elecnor, Indra and Soluziona; railroad manufacturer CAF, and Banco Santander. This market has opened its doors more easily thanks to a trade mission led by Jose Maria Aznar, former prime minister of Spain, at the beginning of the year, during which Aznar held meetings with the U.S. Chamber of Commerce.

“The U.S. is an ideal market,” says Mauro Guillén, a Wharton professor and director of the Lauder Institute of Management and International Studies. “The infrastructure is in bad condition; it’s been years since investments have been made in it.” Guillén, who authored a Universia-Knowledge@Wharton article titled, “Ferrovial, Following in the Path of Carlos V,” adds that “central and local governments have a fiscal crisis, which means they are looking for ways to get funding through privatization and concessions that attract private capital. It would not be surprising if Spanish infrastructure companies, which are very competitive, wind up with a piece of the pie.”

Along these same lines, Esteban Garcia Canal, a professor in the University of Oviedo’s business department, explains that “in the case of Spain, the remarkable development of infrastructure projects in recent decades, plus more recent international experience, has provided Spanish companies with advantages that explain their current successes.”

This experience, along with its rapid entry into Texas, has enabled Ferrovial to join with the government to develop the Trans Texas Corridor. Ferrovial has been awarded two toll roads in this project -- sections 5 and 6 of SH130, the high-speed highway, as well as, SH-121, barely a month ago. These two concessions alone add up to an investment of $4 billion.

A testing ground?

The same logic that applies to Texas can be applied to other states, at least in such sectors as infrastructure where construction firms, engineering firms, and providers of technology and railroad equipment are looking into every opportunity. The financial institutions are also there. Nevertheless, it is impossible to avoid a key question: Are Spanish companies using Texas as a testing ground?

Guillén does not think so. In his opinion, their arrival in Texas reflects several different factors that all coincide in one space at one time. “Cintra-Ferrovial came into this market because they obtained a concession for the San Antonio-Dallas toll road. BBVA did so because it is looking for synergies between its banks in Mexico and the Hispanic community in the United States,” he explains.

Allen, however, suggests a wait-and-see attitude. “Currently, the money that has been invested in the United States is being used for exploring the market. A much bigger step would have a significant impact on the bank’s results. There is no reason to run that sort of risk at this moment.”

BBVA has invested 7.410 billion euros in its acquisition of Compass. The deal has enabled BBVA to enter the list of top 20 banks in the U.S. However, the sub-prime mortgage crisis is beginning to spread across the country, leading to a higher rate of late payments. Given such conditions, Allen opts for caution.

“It remains to be seen if Texas is the springboard for Spanish companies into the entire U.S. market,” says Allen, adding that companies from the entire world “try their luck in the United States. This is all part of becoming a big multinational. In manufacturing sectors, things have gone quite well, but the service sector is another [story]; very few companies have yet to get results. Spanish retail banks are very good at what they do. I believe that they have what it takes to achieve their goals. Unfortunately, they have chosen a tricky time to get in because a growing number of mortgage firms are dealing with late payments.”

Guillén, as well, notes the great diversity of the U.S. market. “In consumer markets, including banking, the United States is a fragmented market, with various cultural standards and levels of buying power. It is a very big country.”

As a result, you cannot assume that the same sorts of opportunities will exist in the rest of the country. One example of the problems facing Spanish companies is Zara. The all-powerful Spanish company has taken decades to acquire a niche in the U.S. Although the company entered other markets quickly, in the U.S. its progress has been slowed by cultural differences from one coast to another, as well as the logistical difficulties involved in fulfilling its goal of re-supplying its shops every 15 days. Although Zara has managed to acquire a niche in the United States, it has done so at a much slower pace than usual.

A similar problem could exist for financial institutions. “Perhaps the most important obstacle involves the integration process for banks that have tried to deal with murky problems they face,” says Allen. “From day to day, BBVA has worked in a positive economic environment in the United States. To the degree that this might change, we will see how well or poorly the bank understands the market.”

In addition, Texas is not necessarily the operational center for every Spanish company in the U.S. Many companies have set up shop in other U.S. markets. “Everything depends on the sector,” says Guillén. “Freixenet [the sparkling wine company] operates out of California, which is logical because it is a region with extensive vineyards, but it sells throughout the United States. BBVA is in a large and difficult sector because it is going from state to state. Inditex also operates in many different U.S. states,” he notes.

Whatever strategy Spanish companies follow in Texas and the rest of the U.S., Allen points out the ultimate factor that can be taken as the moral of the story: “Exceptional companies such as Zara and the larger Spanish banks -- Santander and BBVA -- will succeed in practically every market. My major worry is that [Spanish companies] may wind up buying businesses that are overvalued or have hidden problems.” Regarding BBVA’s recent purchase of Compass, he says, “The current challenge for BBVA in the U.S. is the emerging loan crisis, especially among mortgage firms. If BBVA is a winner despite such conditions, it could become a serious player within the U.S. market.”

As published in Knowledge @ Wharton (http://knowledge.wharton.upenn.edu), the online research and business analysis journal of the Wharton School of the University of Pennsylvania.

Link to article here.

Marfa, Alpine on Mexico truck path

Residents of scenic West Texas towns not happy about La Entrada route.

By Barbara Novovitch
THE NEW YORK TIMES
Monday, March 19, 2007

MARATHON — The idea that in a few years, hundreds of diesel-puffing semi trucks from Mexico could be tooling through two small towns in this area of West Texas every day has upset residents.

The towns are on the route of a projected trade corridor from Mexico called La Entrada al Pacifico. In the proposal's current form, La Entrada would route semis through single-stoplight Marfa, population 2,400, and neighboring Alpine, population 7,000, which has three traffic signals on two one-way streets through town.

Marfa is a travel destination for many in Central Texas and beyond, including East Coast art lovers, because of the famed Chinati Foundation, which houses 100 untitled works in mill aluminum by artist Donald Judd.

At a Texas Department of Transportation hearing in Marathon last week, dozens of residents spoke out against the plan, which state officials insisted was strictly preliminary.

"We own a precious natural resource that is becoming more and more valuable: peace and quiet," said Don Dowdey, chairman of the Big Bend Regional Sierra Club. "Out here, scenery, tranquillity and a rural way of life have attracted people seeking relief from congested cities."

The Entrada proposal, he said, "would ruin the heritage of the Big Bend area's beautiful, wide-open spaces."

Some here, however, doubt that the proposal can be stopped.

"How we behave in the next year could have an impact," Marfa Mayor Dave Lanman said, "but I don't think we're going to stop the corridor."

"They have the ability to chip away at it — a little piece here, a little piece there — and they think as the traffic increases, the public will get used to it," Lanman added. "They won't remember when you'd pass just two or three cars for the 24 miles between Marfa and Alpine."

Lanman said he thinks the current highway construction intended to create more passing lanes between Marfa and Alpine was the start of La Entrada, and he fears that the public hearings, which continue today in Midland and Tuesday in Fort Stockton, are being held to fulfill a legal requirement.

Brian Swindell of HDR Engineering in Dallas, which is conducting a study of the plan for the state, which is expected to be finished by next March, said, "We expect to identify the preferred alternative — it could be rail or roadway — and the supporting information that supports selection of that corridor."

He said that bypass routes or a "do-nothing alternative" could also be considered.

La Entrada al Pacifico was signed into law in 1997 by then-Gov. George W. Bush. The oil cities of Midland and Odessa to the north, through the Midland-Odessa Transportation Alliance, have budgeted more than $34 million in state and federal transportation money to promote the route, saying the increase in freight traffic will boost local economies.

By 2010, according to figures cited at a recent alliance conference, 550 trucks are expected to pass daily through Presidio; by 2020, 1,455 trucks. The current average is 49 per day.

Residents of Marfa and Alpine fear that the truck traffic will harm their towns economically because they thrive on tourism.

Link to article here.

You'll need to clean your spectacles or blink several times when you read how closely Cintra courts governments because it'll SHOCK you (or make you want to take a shower, or two). Yes, the government in Ontario, Canada pays Cintra if not enough people take their toll road! Do you see any protections for taxpayers here? See anyone looking out for us? Nope, the government just signs on the dotted line for up front cash and bemoans the consequences for the next 50 years. For, we the people, it's just too bad, says our government, because "we signed a binding contract."

Cintra becoming king of the toll roads
But Spanish company's global projects are earning criticism, too
Sunday, March 11, 2007
By TONY HARTZEL
Dallas Morning News

MADRID, Spain – Thousands of miles from the shopping centers along State Highway 121, a toll road company is banking that it can bring to Texas the success it's built among the olive groves of Spain.

Cintra Concesiones de Infraestructuras de Transporte SA, the company picked to work on two major Texas toll road projects, has operated roads and collected tolls since 1968.

In that time, it has raised tolls around Toronto, to the chagrin of politicians. It has opened sophisticated new projects in Madrid and its suburbs. It has paid billions to take over toll roads in Chicago and Indiana, with rights to toll revenues for up to 99 years. It has even taken one project full circle, giving a 35-year-old toll road – and its toll revenue – back to the Basque regional government in northern Spain.

Now it's a central player in an increasingly contentious debate over the planned Trans-Texas Corridor, which it has been hired to develop. And last month, the company was selected to build and operate State Highway 121 in Collin and Denton counties as a toll road.

No one from Cintra attended the Feb. 27 announcement of that deal, and company officials declined to comment last week for this story. But last summer, at their Madrid headquarters, they were welcoming.

"This is about investing in the very long term," said Nicolas Rubio, Cintra's business development director.

"Nothing against public roads," he said, "but if you have the private sector wanting to do it, that allows the government to concentrate on other priorities."

Toll roads have been a priority for Cintra and its corporate parent, Grupo Ferrovial, since they partnered with a company called Europistas on the A8 highway in northern Spain.

The road struggled in its first few years, and when some private companies floundered and gave their toll roads back to the Spanish government in the 1970s, Cintra did not.

"Our strategy was to invest and to hold," said Jose López, Cintra's director of U.S. and Latin American operations. "After a few more years, it was a gold mine."

Going global
It's not all been easy. Cintra's first international project, in Colombia in 1993, was abandoned after a few years when toll road opponents began blowing up toll plazas. Workers were still inside when the bombs went off.

"Now we only invest in areas where that can't happen," Mr. Rubio said.

The company turned its attention to more stable countries like Chile, where it has built 463 miles of toll roads in the last 10 years. But it was a 67-mile toll road outside Toronto that paved the way for much of the company's recent business, including its work in Texas.

Cintra garnered international attention when, in 1999, it assumed control of the existing 407 ETR project outside Toronto. It had opened as the world's first all-electronic toll road.

But in the last several years, Cintra and Ontario provincial officials have battled extensively over the rates the company can charge motorists, with the case reaching the highest courts in Canada. Cintra officials recently prevailed, although they point out that the contract provides stiff penalties should higher tolls result in less traffic.

"The tolls when we bought the project were way low," said Mr. López. "If we had kept the toll where it was, it would have been congested."

The Canadian toll rate debate has led to regular meetings between Cintra and Canadian government officials.

"We meet all the time," Mr. López said. "Especially if there is an election coming."

From Chile to Ireland and from Canada to Texas, Cintra has claimed a growing stake in the international toll road business. Most of that growth has occurred since the late 1990s, and much of it has come in its home country of Spain, where Cintra is opening hundreds of miles of new toll roads.

Growing in Spain
Headed out of Madrid on the R4 roadway one morning last summer, traffic was fairly light. The road, which leads to the Spanish capital's small but growing southern suburbs, costs about $7.50 to travel 37 miles, and it attracts only 12,000 vehicles a day.

But the company just opened a 111-mile extension of the R4, and 83 miles of that extension have tolls. It costs about $15 to drive the extension from end to end, and Cintra will collect tolls on that section of the highway for up to 38 years.

The extension is expected to be very popular, offering weary drivers a way to pay a few euros and avoid congested roads. Those motorists, headed to Spain's southeast coast, reach their destinations about four hours sooner. And due in part to the adjacent R4, the Madrid suburbs of Parla and Pinto, with about 50,000 residents each, are expected to grow dramatically.

"All of a sudden, there is a highway here, and people can now commute," said Javier Pérez Fortea, director of Cintra's European division.

Near one R4 toll plaza, examples of the area's past and future collide. Dozens of vehicles travel through one of 21 lanes at the toll plaza while in the distance a cowboy practices with his prancing horse. Farmers still tend their fields, and tractors cross the toll road on overpasses specially constructed for farmers and other local traffic.

In for the long haul
In the United States, Cintra has drawn attention for the long-term deals it has reached with local and state governments to buy existing toll projects.

In Chicago, Cintra and its partner, Macquarie Infrastructure Group, paid $1.82 billion for the rights to operate the Chicago Skyway bridge in a deal that will last until 2104.

The deal has drawn criticism for its 99-year duration. Chicago officials were also criticized for using the cash to help balance the state budget instead of building more roads.

In Indiana, Cintra and Macquarie paid $3.8 billion for the rights to all the state's toll roads through 2081. In that case, state leaders pledged to use the revenue for other transportation projects, but they came under political fire for selling the rights to a valuable toll road network for 75 years.

Cintra expects about a 13 percent return on its investment in Indiana. In Texas, that figure is about 12 percent.

On some roads, Cintra officials say, the payoff doesn't come for up to 30 years.

"We are very patient investors," Mr. López said.

ABOUT CINTRA
Full name: Cintra Concesiones de Infraestructuras de Transporte

Headquarters: Madrid, Spain

Parent company: Grupo Ferrovial

Businesses: Manages 20 toll road concessions in Spain, Portugal, Ireland, Greece, Chile, the U.S. and Canada; and more than 250,000 parking spaces

2006 revenues: 884.7 million euros (about $1.17 billion)

2006 net income: 155.6 million euros (about $206.1 million)

Employees: More than 2,900

U.S. toll roads: Indiana Toll Road, Chicago Skyway

Texas contracts: Development contract for Trans-Texas Corridor, rights to build portion of State Highway 130 electronic toll road from Austin to Seguin, contract to build State Highway 121 in Collin and Denton counties as a toll road

SOURCE: Cintra

Link to article here.

Perhaps this explains why Senator John Carona, Chair of the Senate Transportation and Homeland Security Committee, held a public hearing to demonstrate the universal public opposition to Perry’s privatized version of tolling…with regional transportation folks as nasty as these guys, makes ya wonder if their mothers ever taught them to play nicely…or maybe it’s from spending too much time with Ric Williamson.

I’d turn the coin on these transportation leaders and say they’d rather endanger the long-term economic health of the region and risk state sovereignty issues by handing over public highways to foreign companies for the next 50 years all for a few near-term transportation projects ya want fixed! It makes no sense…they’re selling Dallas area residents down the road to the tune of $100 billion in profits going overseas for the next 50 years all so they can complete a 12 mile stretch of highway (for a lousy $2.5-5 billion up front payment)! It’s the Regional Transportation Council (RTC) that needs their heads examined not these courageous senators! C’mon, these RTC guys are essentially saying, “Anyone who dares to represent their constituents should pay a price with us, the elitists who know what’s best for everyone.”

2-year ban on toll roads sought
By GORDON DICKSON
Star-Telegram
March 7, 07

FORT WORTH — Interstate 35W, Loop 820 and Airport Freeway would not be expanded until 2015 at the earliest if a two-year ban on toll roads is approved by the state Legislature, area leaders say.

A bill calling for a two-year ban was filed Tuesday and has strong support in the Senate.

North Richland Hills Mayor Oscar Trevino says it’s time to hold the Metroplex’s lawmakers accountable for jumping on the anti-toll road bandwagon and endangering Metroplex road projects.

The bill was filed by state Sen. Robert Nichols, R-Jacksonville, and cosigned by 25 of 31 Senate members, including Jane Nelson, R-Lewisville, Florence Shapiro, R-Plano, John Carona, R-Dallas and Royce West, D-Dallas.

“Any senator or state representative who gets on the bandwagon should be told we don’t appreciate it. It goes against the region’s mobility plan. We’re gridlocked,” Trevino, chairman of the Tarrant Regional Transportation Coalition, said Wednesday morning.

Noting that Shapiro walked out of a Senate committee meeting last week while Metroplex leaders were making a presentation in Austin, Trevino added: “If they don’t want to hear from the region, what are they doing down there?”

While anti-toll road sentiment has swirled statewide, particularly on the proposed Trans-Texas Corridor, Metroplex leaders have sought toll financing for projects that aren’t scheduled to receive sufficient gas-tax funding.

Texas Department of Transportation officials have already mapped out how to spend their gas-tax money through 2015 and the Tarrant County projects aren’t fully funded.

But the agency is currently seeking private bidders to come forward with investment money, and in exchange collect tolls on express lanes on I-35W, Loop 820 and Airport Freeway for up to 50 years.

Privately run toll lanes also have been proposed for the Texas 114/121 DFW Connector project in Grapevine, scheduled to be under construction early next year.

But Nichols’ bill could halt much, if not all, of that work.

“We must closely evaluate private toll contracts before we sign away half a century of control of our transportation system. Many provisions in recent toll contracts are alarming,” Nichols said in a statement. “These roads were built with public money for public use. Converting existing roads to toll roads would break a promise to taxpayers. No one should have to worry that the roads they drive on today will be tolled tomorrow. Tolling provides a valuable tool for expansion but should be reserved to add new capacity.”

Ironically, Nichols was a champion of toll roads and privatization during his term as a member of the Texas Transportation Commission from 1997-2006, when he resigned to run for the state Senate.

Hillwood executive Russell Laughlin said Metroplex leaders should ask senators to at least exempt the region’s plans from a two-year ban.

Link to article here.
 
"The majority of senators have endorsed legislation to prevent the creation of new private toll roads for two years.
Two measures offered Tuesday by Sen. Robert Nichols, R-Jacksonville, also would prohibit conversion of existing roads to toll roads. At least two dozen senators have signed on as co-sponsors of the two bills, indicating that both should easily pass the chamber."

 
Measures take aim at toll roads
Legislature: Proposal halting creation of private routes for 2 years gains steam in Senate
By TERRENCE STUTZ
Dallas Morning News
March 7, 2007

AUSTIN – The majority of senators have endorsed legislation to prevent the creation of new private toll roads for two years.

Two measures offered Tuesday by Sen. Robert Nichols, R-Jacksonville, also would prohibit conversion of existing roads to toll roads. At least two dozen senators have signed on as co-sponsors of the two bills, indicating that both should easily pass the chamber.

“We must closely evaluate private toll contracts before we sign away half a century of control of our transportation system,” said Mr. Nichols, a former state transportation commissioner. “Many provisions in recent toll contracts are alarming.”

Senate leaders have been increasingly critical of a series of private toll road projects approved in recent years by the transportation commission, including a $3 billion deal announced last week to make State Highway 121 the first privately operated toll road in North Texas.

Senators have warned that some of the projects might result in skyrocketing tolls for motorists in the future and could hamper the ability of the state and local governments to improve public roadways near the toll roads.

Link to article here.

Brake Lights
A traffic jam of opposition is facing the Trans-Texas Corridor
By PETER GORMAN
Ft. Worth Weekly
March 7, 2007

The Trans-Texas Corridor, the Goliath of Texas road projects, is taking a real bruising from the slingshot crowd these days, with so many Davids piling up stones that critics and supporters alike are beginning to believe it may be stoppable.

In the last few weeks, more than a dozen bills have been introduced in the both the Texas State and House to either stop the project cold or put enough restrictions on it to chill the interest of private investors. In late February, a state audit report revealed that millions of public dollars have secretly been spent on the project and that hundreds of millions more might be needed. At least one legislator is considering calling for an investigation of the Texas Department of Transportation. And thousands of opponents from around the state showed up last week in Austin to march in opposition to the giant toll-road proposal and to testify against it at a public hearing.

Gov. Rick Perry, Transportation Commissioner Ric Williamson, and other top- ranking state politicos are still pushing to get ground broken on the 4,000-mile network of privatized toll highways planned throughout Texas in the next several decades. But with opposition growing on both sides of the aisle, critics are suggesting that supporters of the TTC may find they have a price to pay at the ballot box next time around.

“There’s no doubt there’s a huge groundswell of opposition to the TTC,” said Hank Gilbert, a businessman and rancher who organized a March 2 rally in Austin against the project. “We had between 3,000 and 4,000 people rallying against it. That is huge … . And when even people like State Sen. Steve Ogden, a co-author of the bill that permitted the privatization of roads, come out and say the Texas Department of Transportation is out of control with the TTC, well, I think that’s the point at which other politicians will realize that those of us who’ve been fighting this thing are not just lunatics.”

Ogden, chairman of the Senate Finance Committee, is reportedly considering legislation that would eliminate tolls on all roads once the road is paid for — which generally takes 20 to 30 years — as opposed to allowing the private company that built and leased the road to keep charging tolls for a contract period of 50 to 60 years, as will be the case with the TTC if it goes forward as planned.

But while Ogden, a Republican from Bryan, hasn’t yet introduced a bill to rein in the TTC, others have. State Rep. Garnet Coleman, a Houston Democrat, recently introduced a bill to place a moratorium on all new toll roads in Texas for a period of two years “so that the issue can be studied, rather than rammed down our throats.”

State Rep. Lois Kolkhorst of Brenham has introduced two bills that would effectively kill the TTC. One would “repeal … authority for the establishment and operation of the Trans-Texas Corridor”; the second would prohibit public pension funds from being invested in private toll roads — cutting billions in funding that private toll road builders would probably try to use to raise capital.

And powerful State Sen. John Carona of Dallas, chairman of the Senate Transportation and Homeland Security Committee, has introduced 10 bills that together would severely curtail private businesses’ interest in building toll roads. Among them is a measure requiring that the price paid for land taken under eminent domain be established by three disinterested voters who live in the county where the land is located, rather than by a judge. Another would limit the length of a toll-collecting contract held by a private entity to 30 years, after which the highway would become a free road. Other bills would limit toll rates rather than letting private companies set them at will, eliminate the “no compete” clauses in toll road contracts that many believe would hamper the state’s ability to maintain and improve other roads, and tie the state gas tax rate to the amount needed for highway building and maintenance, to ensure that tax funds rather than tolls could be used for those projects.

Carona admits he made a huge error in signing the measure that created the TTC. He told Fort Worth Weekly that he and nearly everyone else in the Texas Legislature were “deliberately deceived” by that bill, and that it’s time to put a halt to the TTC. At a hearing he held last week, he said, “About 1,000 people came, and the overwhelming majority were against the TTC.”

He believes an overwhelming majority of state Senate members now oppose the TTC as well, and that, as chinks begin to show in Perry’s armor, the senators are more willing to oppose him on this issue. “The fact is, the death of the TTC and other toll roads is just one gubernatorial election away,” he said. “The opposition to these things is growing daily.”

“I think the bills I’ve proposed will pass in the Senate,” Carona said. “The real question is whether they will get a fair hearing in the House Transportation Committee. I don’t know. [Chairman] Mike Krusee has the power to bury them there.

“On the other hand,” he added, “Krusee won his last election by a surprisingly narrow margin, and he will have public rage to deal with on this. Of course, if he intends to leave his position as an elected representative and enter the private sector, he may have another agenda. But if he wants re-election, he may realize that following the governor’s lead on the TTC hook, line, and sinker is not the best road for him to take.”

Krusee said he handles bills before his committee fairly. “But it’s up to every member to convince the committee that the hearing won’t be a waste of time, that there is some support and reason to listen to it.”

Coleman said he thinks the TTC can be stopped only if legislators in both houses “feel the heat and know it’s going to be an election issue.”

The recent state auditor’s report may provide plenty of ammunition for the election debates. Auditors concluded that millions of dollars in public funds had already been used for the TTC, in both direct and indirect costs, while Perry has repeatedly said that no public monies would be used to fund the project. And much of the money spent on the TTC was taken from funds set aside for other projects, the report said. At least $52,000 used to pay for TTC advertising — billboards and radio spots — was listed as “engineering” expenses.

The report also noted that Cintra Zachry LP, the partnership hired to develop a comprehensive plan for TTC-35, the 333-mile stretch of toll roads from San Antonio to Dallas, had not met all of its 2006 insurance requirements until October of that year. If Cintra Zachry can’t cover its liabilities under the contract, auditors noted, “it is possible that plaintiffs could seek recovery of these damages from the state.”

The report also noted other problems: Public money would pay for 55 percent, or $16.9 billion, of the rail projects touted as part of the TTC package. The state would be responsible for collecting from toll-jumpers. Under the contracts, the state could be forced to build some segments of the corridor that the private firms didn’t find profitable.

And auditors said TxDOT may have been seriously underestimating the cost of the corridor. The agency has put the price tag of the entire 4,000-mile network at $145 billion to $184 billion, but auditors said one 560-mile stretch alone —from Laredo to Oklahoma, paralleling I-35— will cost more than $105 billion.

“I think that auditor’s report is particularly damning,” said Carona. “The most damning thing, I think, was that the governor, when he announced the Trans-Texas Corridor, said that no public funds would be used for its development. And the auditor now says that $90 million in public funds have already been used, and that number is climbing daily.”

Gilbert said that in light of the auditor’s report, Kolkhorst may ask the attorney general to investigate TxDOT over the subterfuge on TTC spending. She could not be reached for comment.

Proponents of the TTC say it remains the answer to Texas’ current and future transportation problems. Williamson, the commissioner, has insisted, publicly and repeatedly, that with Texas’ population expected to double in the next 30 years and with the shortfalls the state is facing in highway funding, allowing private corporations to build and run toll roads is the only possible solution.

His sentiments were echoed by former Fort Worth Mayor Kenneth Barr, currently a member of the TTC advisory committee. “There’s just not money available to build all of the roads that we need,” he told the Weekly. “That means that goods will not move efficiently and people will not move, and there’s a cost associated with that.” However, he said, the transportation agency has done a poor job communicating that to the public. “There is an awful lot of dialogue that needs to be held that hasn’t been held,” he said.

Terri Hall, founder and director of Texans Uniting for Reform and Freedom, a statewide group fighting the TTC, said the situation is worse than that. “TxDOT continues to operate in complete denial of the reality of the situation. The governor’s Business Council’s own report — done by the Texas Transportation Institute — says that toll roads are not necessary. The sky will not fall if we don’t build the TTC.”

Link to Bracewell & Giuliani press release here.
 
I think it’s pretty safe to say Presidential candidate Rudy Giuliani is in favor of privatizing toll roads.

Firm Advises Cintra in First Privatization of Toll Road in Texas
03/01/2007

DALLAS (March 1, 2007) Bracewell & Giuliani LLP advised Cintra Concesiones de Infraestructuras de Transporte, S.A., a Spanish transportation company, in its successful bid to develop State Highway 121 into a toll road through Collin and Denton counties. The award to Cintra, approved by the Texas Transportation Commission, is the first privatization of a Texas toll road.

Bracewell is acting as project counsel to Cintra with respect to the 50-year concession from the Texas Department of Transportation. Cintra will pay a $2.1 billion upfront and annual lease payments totaling $700 million.

“Cintra was awarded this project because of its proven expertise and competitive proposal,” said Thomas O. Moore, partner with Bracewell & Giuliani. “This is the largest transportation deal of 2007. This is one of only five deals in the country.”

Three firms have competed for the Comprehensive Development Agreement for State Highway 121 since last summer. The proposals were reviewed and scored based on selection criteria set forth by the Regional Transportation Council, the metropolitan planning agency for the Dallas-Fort Worth area.

This CDA is a public-private partnership that allows the provider to handle all facets of developing the toll road, including completing construction and operating and maintaining the corridor.

Cintra, a subsidiary of Grupo Ferrovial specialized in toll roads and car parks, is one of the world’s leading private-sector developers of transport infrastructure.

Bracewell & Giuliani attorneys that advised on this matter include:

Partners: Thomas O. Moore, Roger D. Aksamit, Kevin A, Ewing, George Y. Gonzalez, Jason B. Hutt, Nancy Jo Nelson, Andrew M. Taylor and Jose Luis Vittor.

Associates: Todd G. Amdor, Eamonn K. Bakewell, Patrick A. Caballero, Erik E. Petersen, Lisa A. Smith and Trevor Wommack.

Link to blog here.

While we’d prefer to see the Legislature KILL CDAs altogether, this is a HUGE step in the right direction, and with this kind of support, should become law very quickly. The trouble is in the House and the Governor. If the Legislature can pass it with two-thirds of each house (which they clearly have on the Senate side), it would become law immediately. Then the next roadblock becomes this Governor who could veto the bill. But his veto would likely be overturned if it’s passed with two thirds in each house since I believe that’s what’s needed to override a veto. Timing is everything and Carona’s hearing and our rally couldn’t have happened at a better time to give these legislators the “cover” they need from citizens to go head to head with this Governor!

The best news is that every San Antonio Senator signed onto this bill! Call your State Representative NOW (find out who represents you here) and urge them to support Kolkhorst’s CDA Moratorium bill, HB 2772, in time to save 281/1604 from being turned over to a FOREIGN COMPANY! While you’re at it, thank Kolkhorst for filing the bill as well as her bill to KILL the Trans Texas Corridor (HB 1881)!

Big-time toller says whoa
By Pat Driscoll
Express-News
March 6, 2007

Robert Nichols supported toll-road plans when he served on the Texas Transportation Commission just two years ago, but as a new state senator he says it’s time to apply the brakes and look closer.

The Jacksonville Republican filed a bill today, SB 1267, that would slap a two-year moratorium on privatization of toll roads, including those in the Trans-Texas Corridor.

The bill calls for setting up a group to study the long-term impacts of the state enlisting private corporations to build and operate toll roads in exchange for collecting profits. The governor, lieutenant governor and the speaker of the House would appoint the group.

Nichols, who stepped down from the Transportation Commission in 2005 to run for the Senate, isn’t flying alone.

Twenty-five of the Senate’s 31 members are sponsoring the bill, including several from Bexar County. And Rep. Lois Kolkhorst, R-Brenham, filed an identical bill, HB 2772, in the House.

“We must closely evaluate private toll contracts before we sign away half a century of control of our transportation system,” Nichols said. “Many provisions in recent toll contracts are alarming.”

Nichols said he’d like to ban agreements that restrict construction of state roads when they compete with tollways, and enact safeguards for reasonable toll rates and predictable buy-back costs of private toll leases.

Not wanting to stop there, he also filed SB 1268 to outlaw any conversion of an existing free lane to a toll lane, regardless of whether local voters sign off on such a switch.

Auditor questions TxDOT development pacts
by Christine DeLoma
Lone Star Report
March 5, 2007

It’s been a rough couple of weeks for Transportation Commission chairman Ric Williamson, who has been publicly skewered by lawmakers over his agency’s handling of the controversial Trans-Texas Corridor (TTC) toll road plan.

Adding to the agony, the State Auditor’s Office is raising serious questions about the corridor’s cost to taxpayers.

Giuliani’s Investment Bank Is Sold
Published at Deal Book.com
March 5, 2007

Giuliani Capital Advisors, the investment banking arm of former New York City mayor Rudolph W. Giuliani’s consulting business, will be acquired by Macquarie Group of Australia, Macquarie said early Monday. The sale, which was expected, comes as Mr. Giuliani embarks on a run for the presidency, raising questions about the fate of his various business endeavors.

Financial terms of Monday’s deal were not disclosed. But analysts had previously estimated that the business, which advises on mergers and restructurings, could fetch $80 million to $100 million in a sale. Giuliani Partners, the consulting group founded by Mr. Giuliani, bought the business in late 2004 from Ernst & Young, the accounting firm, for $9.8 million.

Giuliani Partners decided to sell its investment banking unit to prevent its clients’ activities from being used against Mr. Giuliani in a presidential campaign, a source told The New York Times in January, speaking on condition of anonymity.

A source at Giuliani Partners, also asking not to be identified, disputed that suggestion Monday, telling DealBook that the divestiture will allow Mr. Giuliani to focus on his campaign.

After the deal closes, Giuliani Capital will become part of Macquarie’s broker-dealer unit in the United States. The deal will give Macquarie an additional 100 investment banking professionals in North America, for a total of about 450, Macquarie said.

While not a top player in the mergers and acquisitions business, Guiliani Capital has a strong restructuring practice and has played an advisory role in several large bankruptcies in recent years. The bankruptcy business has been slow lately, but some analysts expect the number of corporate defaults to increase as access to credit for refinancings tightens.

“GCA provides Macquarie with an opportunity to build upon and expand our existing U.S. capabilities, particularly in corporate restructuring transactions,” Murray Bleach, head of Macquarie’s investment banking group in North America said in a news release Monday.

Mr. Giuliani is also a name partner at Bracewell & Giuliani, a law firm based in Houston that represents many energy producers.

Protest at the Capitol
By JOANN LIVINGSTON
Daily Light Managing Editor
March 3, 200

AUSTIN - Protestors of the Trans-Texas Corridor capped two days at the state’s Capitol with a march up Congress Avenue and rally on the south steps Friday afternoon.

The event was a combined protest against not only Gov. Rick Perry’s massive transportation plan but also against a proposed mandate that would require animal identification and tracking.

“I stand here today with one message for our governor,” Peyton Gilbert said. “Help us with our education and health care, but don’t tag Texas.”

Gilbert is the teen-aged son of one of the rally’s organizers, former ag commissioner candidate Hank Gilbert of Troup.

At the conclusion of the three-hour rally, Gilbert said he was pleased with the turnout, estimating it at several thousand, and not including about 1,000 people he said had attended the previous day’s public hearing with the Senate Committee on Transportation and Homeland Security.

“I think between the Senate hearing and today, we’ll see some results,” he said. “If not, you can bet in the 2008 elections, we’ll see results.”

Participants staged south of the Capitol to march up Congress Avenue, with the march six blocks in length and including not only people, but a variety of farm animals and equipment.

“I think we had a good cross-section of the state here,” said Gilbert, noting he met with people everywhere from the Panhandle to South Texas. People also had come in from out-of-state, he said, because of their concerns as to what was happening in Texas. Linda Curtis of Independent Texans agreed that the people at the rally represented all walks of life.

“I think the legislators are getting the message,” she said. “But we can’t sit back and say that. The legislators do have a problem, and that is the governor.”

Acknowledging the governor’s veto power, Curtis said her organization would be prompting legislators to make sure their legislation is voted on in time to still have time left to override a Perry veto.

Independent Texans also has other “cards to be played,” she said, adding also that if officials don’t heed the concerns, they will “get un-elected.”

Throughout the rally, different speakers voiced their concerns on the two issues of toll roads and animal tagging, often drawing thunderous cheers and chants.

“We’re here from everywhere and we’re here to send a message,” Gilbert said in addressing the crowd. “And what’s that message?” “Don’t tag Texas,” yelled the crowd, several of who carried replicas of the Gonzalez flag bearing the words, “Come and take it.”

Farm and Ranch Freedom Alliance spokesman Judith McGeary, who was among the event’s organizers, voiced her opposition to animal tagging and tracking mandate and thanked everyone for their attendance.

“You are making your voices heard by being at this rally,” she said.

Jimmie Vaughan of the Fabulous Thunderbirds said he was in opposition to the animal IDs and toll roads before singing a new song written especially about the issues.

“ ‘Down with Big Brother,’ I said, ‘Shame on Big Brother,’ always trying to track and trace me,” Vaughan said as many in the crowd joined in on the chorus.

Several legislators joined the list of those speaking, including state Reps. Garnet Coleman, D-Houston; Nathan Macias, R-Bulverde; and Lois Kolkhorst, R-Brenham.

“I want to thank you all for exercising your rights as citizens and telling the man (Perry) in that office right there that he’s wrong,” Coleman said, noting efforts in the previous session to make some changes and noting also legislation filed this session, several of which call for the outright repeal of the Trans-Texas Corridor.

“We can stop this because of your work,” he told the crowd, saying that Texas shouldn’t be a state where “you’re going to have to be rich to drive on our highways.”

Saying there is still “a long way to go in this process,” Coleman expressed his appreciation to state Sen. John Carona, who heads up the Senate Committee on Transportation and Homeland Security. “I want to thank him for going against the grain to make sure Texans are treated properly,” Coleman said of Carona’s holding of the public hearing. “We want to make sure that you won’t have to drive on roads that you’ve paid for twice.”

Kolkhorst discussed the legislation she has filed, and acknowledged lawmakers erred in passing the bill that enabled the Trans-Texas Corridor.

“This session will see more aggressive efforts to take the Trans-Texas Corridor out of the code,” she said. “This is just one of many things to take away our freedom.”

The issues are not Republican nor Democrat, Kolkhorst said, saying, “This is a Texas issue. It’s about the United States. ‘Don’t mess with Texas’ is right.”

She said she had met with the lt. governor and House speaker - and both were listening.

“I think you’re going to be amazed at some of the things that come out,” she said. “We’re going to take our roads back. We’re going to take our mistake back and take our nation back. No North American Union."

“You got it, baby,” Kolkhorst told the cheering crowd.

McGeary encouraged those in attendance to take the time to visit with their local legislators.

“Go in and talk to them,” she said.

Macias said it was an honor to speak at the rally.

“I stand before you here on Independence Day, and the winds of change are blowing again in Austin,” Macias said, adding, “You as Texans have chosen to stand up and speak your mind to your elected officials.”

Macias said he personally didn’t agree with the scope of the Trans-Texas Corridor or plans to toll other roadways in the state.

“Let’s work together with public, private and citizen input to solve our transportation issues, now and in the future,” Macias said.

A spokesman for Libertarian Congressman Ron Paul of Texas said the Capitol belonged to Texans.

“For those who live high on the low hill of character … we are here today to knock on their door because this is our property, too,” she said, saying the nine most terrifying words are, “I’m from the government, and I’m here to help you.”

“When someone is stealing your rights, it’s time to follow the money,” she said. “It’s time to stop the highway robbery, it’s time to stop the Trans-Texas Corridor.”

The project has connections to NAFTA and the North American Union, she said, asking the crowd, “Are you going to pledge allegiance to the flag of the North American Union?” and urging people to contact their respective lawmakers.

During the rally, concerns were expressed by several of the speakers about possible far-reaching implications of the Trans-Texas Corridor and animal identification project, especially relating to the potential for a North American Union that would unite the United States, Canada and Mexico under one flag, currency, identification card and government, they said.

“Once you can ID something uniquely, you can track it. Once you can track it, you can monitor it. Once you can monitor it, you can control it,” said Liz McIntyre, author of “Spy Chips,” a book about the use of radio frequency identification computer chips.

“It’s all about ID-ing, tracing and controlling inanimate objects, animals and even us,” she said. “There are plans afoot to chip everything … and every highway will be a spyway if we let it happen.”

Terri Hall of Texas Toll Party noted some of the testimony given during Thursday’s Senate committee hearing, saying one expert testified that it costs the taxpayer 50 percent more to have a public/private partnership.

That expert noted it “is always better to keep these contracts in the public sector,” Hall said. “These are not a foreign country’s roads. These are our roads.”

Saying that opponents of the Trans-Texas Corridor are gaining the ear of legislators, Hall pointed out questions raised by the senators on the committee, especially in light of a recent audit released by the State Auditor’s Office.

“Perry is lying when he said there is no taxpayer dollars in the TTC,” Hall said. “The audit showed $90 million of taxpayer money has already been dumped into this project. A single law firm got $18 million.”

Noting questions about the Texas Department of Transportation’s coding of expenses - some of which could be illegal under law - Hall said an investigation by the State Attorney General’s Office should be conducted and any wrongdoing found should result in prosecution.

Corridor Watch co-founders David and Linda Stall said progress was being made in the fight against Perry’s transportation project.

“It’s about money, all of this is about money,” David Stall said. “It’s not about transportation. It’s about revenue-generating. We have to stop this, and we can’t stop now.”

Saying Carona had referred to TxDOT as a “rogue agency,” Stall said the Trans-Texas Corridor has become a “hot topic” and grown into a national issue.

“Texans can either stand up and show what we are about or we can become the laughingstock of the nation over the corridor,” he said.

“We have momentum,” Linda Stall said. “You have been heard. We have to keep pushing.”

Wharton County Commissioner Chris King said the Trans-Texas Corridor will change the face of rural Texas.

“It’s going to change the way we live in rural Texas, and I tell you right now, I’m not for it,” King said. “Rick Perry is not my governor.”

Former state attorney general candidate David Van Os told the crowd to “say no to corporate hogs at the trough.”

One-hundred-seventy-one years after Texas’ Independence Day, the government shouldn’t be talking about handing over commerce and transportation to private, foreign corporations, Van Os said, noting the “Come and take it” message of the several Gonzalez flags being displayed in the crowd.

“Say no to all of it,” he said. “We the people own this plot of ground. We the people own our beautiful state of Texas and we’re not going to let crooks and robber barons take our Texas away from us.”

In his closing remarks, Gilbert told those at the rally that they represent “thousands of people” back home and for each of them to have others who weren’t at the rally to also contact legislators to urge the repeal of the Trans-Texas Corridor.

Make the legislators commit their support to the repealing legislation, Gilbert said. “If they wont’ support it, let them know that you will make sure this is the last session they spend in Austin representing you.”