Posted on 12/16/2004 6:51:41 PM PST by BobL
State approves bid for I-35 toll alternative
Spanish group led by Cintra and Zachry would pay for $6 billion of turnpikes, and give state a $1.2 billion concession payment.
By Ben Wear
AMERICAN-STATESMAN STAFF
The Texas Transportation Commission, not prone to staring at the mouths of gift horses, today chose a consortium to build an alternative to Interstate 35 that pledges to construct most of that road on its own dime.
Actually, the partnership led by Spanish tollroad operator Cintra and Zachry Construction corporation would spend $6 billion worth of its dimes to lay down a four-lane toll road from San Antonio to Dallas — and give the state $1.2 billion to boot.
Cintra and Zachry would construct more than 300 miles of highway, leaving a gap only for Texas 130. The corridor road would tie into the south and north ends of Texas 130, a tollroad currently under construction by Lone Star Infrastructure. Lone Star's primary partner is Fluor Enterprises Inc., one of the two losing bidders today.
The Cintra-Zachry consortium would then have a concession to charge tolls on the road for the next 50 years. The toll rates would be subject to approval by the transportation commission.
If the Texas Department of Transportation and the Cintra-Zachry group can work out a final contract in the next two months, then officials expect construction could start on the first segment from Austin to San Antonio by 2007. The other four segments would begin in 2009 and 2010, with completion of the entire route by the end of 2014.
Cintra and Zachry, along with about 16 other subcontractors, would also build other segments of the I-35 alternative and might participate in freight rail relocation projects, as well as other elements of the corridor project in decades to come.
Gov. Rick Perry, who proposed the 4,000-mile Trans-Texas Corridor during the 2002 election campaign, made an unusual appearance at today's commission meeting, joining the commissioners on the dais for a long presentation on the I-35 alternative. At the end, Perry, who has taken hits from every direction for what many saw as an unrealistic pipe dream, took a few minutes for a rhetorical victory lap.
"When our hair is gray, we will be able to tell our grandchildren that we were in a Texas Department of Transportation meeting room when one of the most extraordinary plans was laid out for the people of Texas," Perry said. "I hope there are a lot of people in this room that are knocked back on their heels saying, 'I can't believe it.' Well, believe it."
Just how Cintra and Zachry can afford to lay out all of the money, give the state $1.2 billion for the right to operate the roads, and then make money, remained unclear Thursday.
Jose Lopez, United States and Latin America director for Cintra, said the toll rates would be comparable to current Texas toll rates, generally between 10 cents and 20 cents a mile for passenger cars and three to four times that for large trucks. And he said the company's financial plan did not include making money off concessions along the roads such as fast food joints or gas stations.
Cintra and Zachry, simply put, believe that if they build it, the drivers will come. One possible incentive: The 2003 legislation that allowed the state to build the Trans-Texas Corridor, or let someone else build and operate it, allows speed limits on the road of up to 85 miles per hour.
The bottom line:
Tolls will have to be imposed on I-35 (currently a freeway), simply because Governor Perry's White Knight will require it. Otherwise no sane CEO would ever drop that kind of money.
If you want to know why the Republican Governor here is about to get creamed in the Primary, this is a prime example.
TTC Ping
7 billion dollar contract could make every politician in Texas
a millionaire several times over.
What a vehicle for corruption this deal is.
Sounds like a horse swindle to me.
The I35 corridor between San Antonio and Austin is in the Final stages of upgrade to 4 Lane, New Braunfels and San Marcos being the few remaining bottlenecks, But this portion is already close to capacity, IMHO. But, living in Texas most my Life I do smell a RAT here. Thats a lot of money, someones gonna pay and it will probably be the taxpayers of Texas if the past is any indication.
I'm suspicious too, but do you really think I-35 is underutilized? I drive the section between Austin and Dallas fairly regularly, and feel I'm taking my life in my hands with every white knuckled trip. It's congested and dangerous, and road rage seems to be on the increase.
Know anything about this?
"I'm suspicious too, but do you really think I-35 is underutilized? I drive the section between Austin and Dallas fairly regularly, and feel I'm taking my life in my hands with every white knuckled trip. It's congested and dangerous, and road rage seems to be on the increase."
Yes, there is heavy traffic on that stretch at times, but even so, is the traffic bad enough to drive people off of I-35 and have them pay 15 to 20 cents per mile - to pay off a $7 Billion investment. I can't see how. Maybe 20 or 30 years from now there could be some spillover traffic, but no company in its right mind would wait that long for its return on investment.
Familiar - thanks.
Cintra
Ferrovial-Agromán
Zachry Construction Corporation
Earth Tech, Inc.
PriceWaterhouseCooper
JP Morgan Securities
Bracewell & Patterson
Pate Engineers, Inc.
Aguirre & Fields LP
Rodriguez Transportation Group
OTHON, Inc.
Railroad Industries Incorporated
Amey
Mercator
Public Resources Advisory Group
Southwestern Capital Markets
National Corporate Network
HRM Consultants
It's going to get worse.
The politicians are taking more and more liberties in the way they act towards the "people".
They can get away with just about anything, these days, and they know it.
They and the "elite" think they are some kind of royalty with God given rights to take anything they want.
Yes. This is part of the Trans-Texas Corridors project. Go to the Texas DOT website and click on the appropriate links.
Mostly underutilized? Have you driven between Dallas and Austin on I-35? Add a few hundred Mexican trucks a week thanks to NAFTA, and you'll have folks more than willing to pay the cost of a tank of gas to ride a tollway at 85 mph.
There certainly will be people willing to pay to get out of the traffic - but will there be enough people to do that, for this company to get anything close to a reasonable return on investment? I just can't see how - unless the state removes the freeway option for the same route ($7.2 Billion is LOT of money).
I certainly wouldn't invest any of my money in such a project. Most of the tollways around urban areas such as Dallas, Houston and Atlanta seem to make more sense economically (although the Hardy toll road would make more sense if it actually went anywhere).
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