Spanish firm to build and run new PFI toll road in Texas

International Construction Review ^ | 25 August 2006

[AnimalLover]

Grupo Ferrovial, Spain’s construction, infrastructure and services giant, had a busy summer acquiring airports in the UK and Peru. Now it has a concession to build and operate a Texas superhighway.

Construction of the new toll road project, designed to develop an alternative route to Interstate 35 as part of the planned Trans-Texas Corridor is due to start early next year.

This is has been agreed by the Texas Department of Transport under a comprehensive development deal with the Spanish company Cintra - Concesiones de Infrastructuras de Transporte, a member of the Ferrovial group.

Cintra’s partner for the five-year road building programme is the San Antonio-based contractor Zachry Construction Corp, but Ferrovial’s construction company Agroman is getting a share in the business.

Zachry joined with Cintra in a scheme to provide private investment worth $6 billion. The assignment is to design, build and operate a four-lane toll road covering the 500 km distance between Dallas and San Antonio, bypassing the State capital at Austin.

For this concession Cintra is paying the State of Texas $1.2 billion. It gives them the right to build and operate this initial segment of the intended Trans-Texas Corridor.

This would be part of the ‘super-highway’ spanning the United States from the Mexican border at Laredo, making its way through Texas, Kansas and Oklahoma and connecting with the Canadian highway system north of Duluth, Minnesota.

Because it would provide a connection all the way between Canada and Mexico, the project is also described as the North American Free Trade Area (NAFTA) super highway.

The project as conceived by Cintra and its partners and endorsed by the Texas transport department is certainly ambitious. They have talked about developing a corridor providing two lanes for high speed trucks and three for passenger vehicles in each direction, plus high speed and freight railway lines, possibly also telecommunication cables and oil, gas and water pipelines in an adjacent utilities corridor.

But a corridor of this overall width – maybe as much as 360 m - has alarmed people who stand forced to surrender property in land and buildings to the project. This concern has been sharpened by the disclosure that, citing a recent U.S. Supreme Court ruling, the developers intend to exercise the principle of ‘eminent domain’ in land acquisition proceedings on the grounds that they are acting as agents of a public authority.

The developers apparently believe that such rights, once established in Texas, could then be applied across the entire 6,500 km length of the NAFTA highway. Whether that proves to be so depends on the outcome of any challenge that might be launched against such a claim.

The Cintra-Zachry partnership is however in a strong position because they have already secured an agreement granting them the right to develop the new highway in Texas. They have also put money down for the privilege.

The first concession within the Trans-Texas Corridor has already been awarded to Cintra. According to a statement by parent company Ferrovial, construction is expected to start early in 2007 once environmental and other permits have been obtained.

These initial contracts, to build two segments of the new toll road 64 km between Austin and Seguin will be performed 50 per cent each by Ferrovial’s construction subsidiary Agroman and Zachry, which has won around $180 million worth of road contracts already this year from the Texas Department of Transport.

Total construction investment in the new contracts is said to be $1.3 billion.

“The new highway”, the statement explained, “will offer an alternative to I-35 between San Antonio and north Austin, making it possible to avoid the highly congested area of central Austin on medium and long-distance journeys.

“The new high capacity road will absorb growth in long-distance truck traffic expected as a result of trade agreements between the United States, Mexico and Canada.”

Cintra has also recently taken over management of the Indiana Toll Road (ITR) after paying $3.8 billion to the State’s finance authority for the transfer of the asset. In a 50:50 consortium with the Australian bank Macquarie, Cintra now has charge of this 250 km highway which links Chicago with the eastern seaboard of the United States.

The concession will run over 75 years.

The company commented: “The project reinforces Cintra’s presence in the U.S., a strategic market for the company: it has a 99-year concession to operate the Chicago Skyway ($1.83 billion) which links with the Indiana Toll Road, and it is a strategic partner of the State of Texas for 50 years to develop the Trans-Texas Corridor, one of the most ambitious infrastructure projects ever undertaken in the United States.”

[peyton randolph]

I remember when conservatives were generally in favor of privatizing non-essential governmental functions, and not fighting for the "right" to increase their tax burden.

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There is a difference between privatizing non-essential governmental functions and having private entities pay/bribe the government to use its eminent domain power to build something that is not needed. If the market needed this travesty, the private sector would pay for it without using the State to confiscate property. The State is in essence forcing property owners to sell at values far below what would have to be paid if this was a purely private venture.

[1rudeboy]

Interesting standard. Chicago has "needed" a third airport for years. You suggest Chicago does not "need" one badly enough because private firms are unwilling to get the ball rolling?

[peyton randolph]

What is being given to a foreign corporation?

Private property that would never sell on the open market for what the State will pay for it through eminent domain.

Will those be American leeches? Americans who will benefit from this road? In addition to the Americans who benefit from using the road? Don't tell jpsb.

Yes. But it is giving those leeches something they're not entitled to by paying/bribing the State. Individual Peter (the property owner) is getting robbed to benefit Paul (big business that has its hand out). 

Who's rights are being trampled?

In this instance, the State through eminent domain is confiscating property at discount rates to what would be paid on the open market...assuming that the owners were even willing to sell to a private buyer. Because it is a condemnation, the owner also loses the right to say no.

[deport]

Would it help if you were told that the article is wrong? They may have access to press release information from the Spanish companies, but on the Texas end none of this has been completed.

No plans for the TTC have been finalized. No land acquisition has started.

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This article mixes up several different things I think. Part of it deals with the recently signed contract with C-Z to do some 40 miles [segments 5&6] of SH130 between Seguin and Creedmoor. This will tie into the 49 miles of toll SH130 between Creedmoor and Georgetown which will be completed in the next two years. This was a $1.3 billion contract for 50 years lease with revenue sharing to the state and C-Z to put up the construction money and construct.

[peyton randolph]

Interesting standard. Chicago has "needed" a third airport for years. You suggest Chicago does not "need" one badly enough because private firms are unwilling to get the ball rolling?

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With very few exceptions, the airline industry loses money. If there was a way to make a profit, private firms would create the third airport (assuming FAA approval).

Chicago will get that third airport the traditional way...when enough politicians are bought off to use eminent domain to steal the land for it at a discount from unwilling sellers.

The concept of "need" is also relative. Who needs it? And why should their needs trump private property rights?

[jpsb]

hey, fine, build a super highway deep into Mexico connecting Chicom controled ports with America Cities, The Chicoms thank you, Islam thanks you, drug cartels thank you and so do the dirt poor millions living in Mexico and central/south America. You just made life much easier for them.

Later.

[Toddsterpatriot]

Private property that would never sell on the open market for what the State will pay for it through eminent domain.

Private property is not being given, it is being bought by the state and leased for the tollway. Glad we could straighten that out. As far as the fair market price, this is also an issue when the state takes land for schools, police stations and firehouses.

Yes. But it is giving those leeches something they're not entitled to by paying/bribing the State.

And if this was a state owned (instead of foreign company leased) toll road there would be no corruption? Thanks for clearing that up.

In this instance, the State through eminent domain is confiscating property at discount rates to what would be paid on the open market..

Sounds like someone should sue to ensure they receive fair market value.

Because it is a condemnation, the owner also loses the right to say no.

Yes, it sucks to have no choice when your home/farm/business is on the line. I guess when the Interstate Highway System was built, everyone sold voluntarily?

[1rudeboy]

The idea of public need trumping private property rights goes back to the Fifth Amendment. Kelo was a step in the wrong direction, but the good news is that a very good number of State Legislatures have passed laws restricting Kelo-type seizures. The fact of the matter is, your/our revulsion at Kelo does not abrogate the doctrine of eminent domain, as you appear to believe.

[1rudeboy]

You forget that building roads leads to traffic accidents, especially at higher speeds.

[jpsb]

Typical adolescence response, I am not at all impressed, just more of the same idiotic comments I have come to expect.

[Sandy]

build a super highway deep into Mexico connecting Chicom controled ports with America Cities,

You're really not making any sense. Are you under the impression that there are currently no routes from Mexican ports to the U.S.?

[1rudeboy]

Well, when you ignore my substantive responses such as my #49 with insults, or greet me to the thread by calling me a "ChiCom," you shouldn't expect to be treated like an intellectual giant.

[Dane]

Well, when you ignore my substantive responses such as my #49 with insults, or greet me to the thread by calling me a "ChiCom," you shouldn't expect to be treated like an intellectual giant.

Want to get the buchanan faux conservatives in a real tizzy.

Just tell them it was Margaret Thatcher who first said "we can do business with Gorbachev" back in 84.

Sheesh I mentioned President Reagan's quote of "Mr. Gorbachev, tear down this wall" on a Mark Levin thread and the people who usually post ont that thread went nuts, all because of Ronald Reagan's words.

[1rudeboy]

I don't think even Pat Buchanan would argue in favor of using taxpayer funds to build the road over private money. But who knows? It might sell some books.

[jpsb]

Your 49 was a complete fraud of an argument, no where did I say this highway could not be lawfully build, yet you try to characterize that as my position. Your entire debating style is a fraud, ridicule and obcusation (sp).

My objections are 1) US nation security 2) US economic interests. Period.

[1rudeboy]

Your comment that, "Texas land can be taken from Americans and given to Spanish developers for the benifit [sic] of Chinese communists . . ." is patently absurd, and could only be more emotionally-driven if it was accompanied by a backtrack of America the Beautiful. The statement from Gov. Perry's office was an attempt to bring the conversation back to a rational level.

[Dane]

I don't think even Pat Buchanan would argue in favor of using taxpayer funds to build the road over private money. But who knows? It might sell some books.

I am somewhat leery of posting a below link from David Brock's website "Media Matters", but even Pat Buchanan in the video provided in the below link, admits his appearance on pissy Chrissy Matthews's "Hardball" will keep pat's book at #1.

Link

Pissy Chrissy and Pat are somewhat sad beings in their public cabal against President Bush, IMO.

[jpsb]

"buchanan faux conservatives"

another lie from the king of liars. But Dane knows that I have never voted for Pat in any election, never send pat any monies, he knows I have never supported Pat in any manner. I do not make him out to be the great Satan as yall do, he is an interesting columnist that I sometimes agree with and sometimes don't. But Dane would rather use the FR boggie man Pat B to paint all those opposed to his (borrowed) Utopian neo-con dream of an Global community as fascists, when in fact we are Constitutional Conservatives. Constitutional Conservatives would like to see the USA remain a strong sovereign nation.

We resist assimilation into the politically correct Borg that our masters wish to force upon us.

[jpsb]

LOL, not at all absurd, that is the current plan! please point out where I mischaracterized any of it.

(1) The Texas portion will be build in Texas ergo, Texas land will be (lawfully) taken. (2) The (toll) highway will be build by Spanish developers and will belong to them (in fact, not in name) for 75 years. (3) The purpose of the highway is to enable Chinese shippers to avoid US ports and use Mexican ports instead.

So my characterization is hardly absurd, not entirely accurate perhaps, maybe only 80% accurate. But I had to sum it all up in a couple of sentences.

[1rudeboy]

Neither Texas, nor its citizens are giving-up their interest in the land. In fact, not only is their interest in the the land legally-protected, it is inviolable. As for Chinese shippers using the Mexican port in order to avoid U.S. ports, the same can be said of U.S. shippers. (Did you know that Texas is the largest exporter in the Union??

In any case, you should re-consider your position based on the following: you oppose the road because it will be built without your money, and you won't have to pay for it unless you use it. Unless you argue that the road is not needed at all, the counter-argument is that the road should be built with your money, and you should pay for it even if you do not use it.