Trans Texas Corridor Will Inject Billions Into State’s Economy, Study Says

(October 30, 2006)—The multi-billion-dollar Trans Texas Corridor will pump billions of dollars into the state’s economy and will create millions of jobs according to a new study by Waco-based economist Ray Perryman.

In “Moving Into Prosperity: The Potential Impact of the Trans-Texas Corridor on Business Activity in Texas,” Perryman says the project will make the state’s economy more competitive.

“Because the TTC enhances efficiency, improves logistics, and reduces transportation time and costs, it increases the ability of companies within the region to expand intrastate trade and operations, and, thus, increase market size and market share on a global basis,” Perryman said.

The report estimates the economic impact over 25-years of the Interstate 35 leg of the project at $1.4 trillion.

Over that period, the report says, the project would increase the gross state product by $665.9 billion, boost personal incomes in Texas by $376 billion and generate 3.7 million permanent jobs.

The report also says the project would reduce traffic congestion, improve safety, and benefit farmers and ranchers along the Interstate 35 leg through “enhanced efficiency and development.”

The Texas Department of Transportation released the study Monday, just more than a week before the Nov. 7 general election, in which the project has been a hot issue in the governor’s race.

Democrat Chris Bell says it’s “rife with insider dealing, cronyism and conflicts of interest.

Comptroller Carole Keeton Strayhorn, who is the most outspoken opponent of the plan, calls the corridor “the largest land-grab in Texas history.”

Kinky Friedman calls the corridor “a land grab of the ugliest kind with land being taken from hard-working ranchers and farmers in little towns and villages all over Texas.”

Work on the Central Texas portion of the project could begin within four years, the Texas Department of Transportation said last month as it released a plan identifying near- mid- and long-term phases of the privately developed toll road.

The plan identifies portions of the corridor from north of Temple to near Hillsboro and from Georgetown to Temple as among the likely near-term phases of the project, on which work could begin by 2010 and could be completed by 2013.

The Temple-to-Hillsboro leg of the corridor would cost an estimated $1.1 billion to design and build. The Georgetown-to-Temple leg would cost about $1 billion to design and build.

Tolls would range from about 15 cents a mile for cars to as much as 48 cents a mile for big trucks, which means the cost of a trip along the full length of the 370-mile toll road could cost from $56 to more than $216.

The Texas Department of Transportation signed a contract in April 2005 with the Cintra-Zachry consortium for planning on the project, the most ambitious highway construction effort since the Eisenhower administration launched the effort to build an interstate highway system.

The $184 billion plan ultimately calls for a 4,000-mile network of transportation corridors that would crisscross the state with separate highway lanes for passenger vehicles and trucks, passenger rail, freight rain, commuter rail and dedicated utility zones.

Report Released by TxDOT Inflates Economic Benefits of the TTC

CorridorWatch.org, Fayetteville, TX 78940-5468

PRESS RELEASE

For Immediate Release

Report Released by TxDOT Inflates Economic Benefits of the TTC

FAYETTEVILLE – CorridorWatch.org cautions Texans to be wary of glowing benefits predicted from construction of the Trans Texas Corridor.

The Texas Department of Transportation (TxDOT) issued a press release this week together with a report it commissioned, both tout economic benefits to Texas from the Trans-Texas Corridor (TTC).

"It is a bought and paid for attempt to justify a project that TxDOT has already committed to," says David Stall founder of CorridorWatch.org an organization that has been challenging the wisdom of the Trans Texas Corridor for more than two years. Stall contends that, "This report is a house of cards built on a foundation of questionable assumptions provided to the consultant by TxDOT." "It's just more lipstick on the pig," says Stall.

After reviewing much of the document Stall concludes that fact and fiction are woven together with some reasonable and other highly suspect projections. The end result is a misleading document that does what those who paid for it want it to do, it touts the TTC as a source of future prosperity. CorridorWatch.org challenges that conclusion.

Some of the basic premises for this report are in serious error. One example is the claim that, "traditional approaches and resources can only meet about 36% of significant needs." Stall contends that the dollar value of the state's transportation needs have been grossly inflated since 2003 and that despite the overstated expenditure requirement our traditional resources can indeed meet that need. One traditional resource is fuel tax. For more than a decade the state's gasoline tax has remained at 20-cents per gallon failing to keep up with inflation and transportation infrastructure costs. A significant increase in the state's fuel tax would pale in contrast to the average $3.85 per gallon effective tax that TTC tolls will impose on Texans. (vehicle MPG multiplied by projected 15-cents per mile toll)

Another basic premise is that the TTC will stimulate business activity and investment in areas along the corridor routes. CorridorWatch.org believes that assumption is in error. Toll roads do not produce the same kind of economic stimulus as free roads.

The primary justification for the TTC is the state's projected population growth. That growth however will occur in the state’s urban centers. The result will be more traffic concentration within the urban centers, not just more traffic passing through urban areas. As the population grows in our urban areas more trucks will depart and arrive within those areas. The major source of urban congestion however is travel between home and work. The TTC will not provide any added capacity within those areas to address that certain impact of the state's population growth.

In promoting the TTC the report points to benefits that are particularly suspect such as greater public safety and improved environmental conditions. Neither is likely to be improved. Toll roads are among some of the nations most dangerous roads. They have higher speeds which result in higher fatality accident rates. Much of the proposed TTC route will be distant from emergency services such as hospitals. Another result of higher speeds is consumption of more fuel and production of more air pollution. Couple this with the longer travel distance of the TTC between urban centers and the adverse impact to the environment compounds.

The Perryman Group previously issued a report on the economic benefits of the TTC based on what they called described in 2002 as extensive study. Between the 2002 report and this week's report the projected economic benefits have been given quite a boost. In 2002 it was projected that TTC construction activity would result in $252.5 billion in gross state product and 4.423 million person-years of employment. The most recent projections include a broader economic stimulus associated with development and benefit estimates have ballooned the earlier numbers to $1.429 trillion in gross state product and 14.829 million person-years of employment.

In this newest report the Perryman Group takes a page from the governor's office and TxDOT's public relations division and adds to the "Myth vs. Reality" debate. In his final assessment Stall says, "Clearly this report is intended as more than a serious study on the economic impact of the TTC. The liberal addition of rhetoric and fluff demonstrates that it is also a failed attempt to come to the rescue of TxDOT to defend an ill conceived project that is in danger of being exposed for what it is, a boondoggle."

CorridorWatch.org agrees that infrastructure is essential to achieving long-term prosperity and that Texas needs to enhance its highways and other transportations systems. However, the Trans Texas Corridor is neither the only solution nor the best solution for the citizens of Texas.

Toll roads top issue in race for agriculture job

The toll of a highway

Red China Opens NAFTA Ports in Mexico

by Jerome R. Corsi
Posted Jul 18, 2006
The Port Authority of San Antonio has been working actively with the Communist Chinese to open and develop NAFTA shipping ports in Mexico.

The plan is to ship containers of cheap goods produced by under-market labor in China and the Far East into North America via Mexican ports. From the Mexican ports, Mexican truck drivers and railroad workers will transport the goods across the Mexican border with Texas. Once in the U.S., the routes will proceed north to Kansas City along the NAFTA Super-Highway, ready to be expanded by the Trans-Texas Corridor, and NAFTA railroad routes being put in place by Kansas City Southern. Kansas City Southern’s Mexican railroads has positioned the company to become the “NAFTA Railroad.”

Right now, the cost of shipping and ground transportation can nearly double the total cost of cheap goods produced by Chinese and Far Eastern under-market labor. The plan is to reduce those transportation costs by as much as 50% by using Mexican ports.

Cost-savings will be realized by bringing the goods into the U.S. at mid-continent. Equally important is that the substantially reduced cost of using Mexican labor in the ports and to transport the goods once off-loaded. Mexican workers undercut Longshoremen Union port employees on the docks of Los Angeles and Long Beach, just as Mexican truck drivers undercut the Teamsters and Mexican railroad workers undercut United Transportation Union railroad workers. By using the Mexican ports, the international corporations managing this global trade are able to avoid the U.S. labor union workers who otherwise would unload the ships in west coast ports and transport the Asian containers into the heart of America by U.S. truckers or U.S. railroad ground transport moving east across the Rocky Mountains.

In April 2006, officials of the Port Authority of San Antonio traveled to China with representatives of the Free Trade Alliance San Antonio, the Port of Lazaro Cardenas, and Hutchinson Port Holdings to develop the Mexican ports logistics corridor. The goal of the meetings in China was described by the March 2006 e-newsletter of the Free Trade Alliance San Antonio:

In January of 2006, a collaboration of several logistics entities in the U.S. and Mexico began operation of a new multimodal logistics corridor for Chinese goods entering the U.S. Market. The new corridor brings containerized goods from China on either Maersk or CP Ships service to the Mexican Port of Lazaro Cardenas. There, the containers are off loaded by a new world class terminal operated by Hutchinson Ports based in Hong Kong. The containers are loaded onto the Kansas City Southern Railroad de Mexico where they move in-bound into the U.S. The containers clear U.S. customs in San Antonio, Texas and are processed for distribution.

Hutchinson Whampoa, a diversified company that manages property development and telecommunications companies, with operations in 54 countries and over 200,000 employees worldwide, is also one of the world’s largest port operators. Hutchinson Ports Holding (HPH) owns Panama Ports Co., which operates the ports of Cristobal and Balboa which are located at each end of the Panama Canal. HPH also operates the industrial deepwater port of Lazaro Cardenas in the Mexican State of Michoacan, as well as the Mexican port at Manzanillo, also along the west coast of Mexico, north of Lazaro Cardenas.

The Free Trade Alliance San Antonio was created in 1994 to promote the development of San Antonio’s inland port. The Free Trade Alliance San Antonio and the Port Authority of San Antonio are both members of NASCO, an acronym for the group’s formal name, the North American’s SuperCorridor Coalition, Inc. A Kansas City Star newspaper article posted on the website of the Kansas City SmartPort, another NASCO member, shows the importance of San Antonio’s inland port to the developing NAFTA Super-Highway and NAFTA railroad corridor emerging along Interstate I-35. According to reporter Rick Alm, San Antonio envisions the opening of a Mexican customs office in their inland port, a move that has been pioneered by Kansas City SmartPort:

Under this area’s arrangement [establishing a Mexican customs facility in the Kansas City SmartPort], freight would be inspected by Mexican authorities in Kansas City and sealed in containers for movement directly to Mexican destinations with fewer costly border delays. The arrangement would become even more lucrative when Asian markets that shipped through Mexican ports were figured into the mix. “We applaud the efforts of Kansas City and the Mexican government in developing a Mexican customs facility there,” said Jorge Canavati, marketing director for Kelly USA [former name for San Antonio’s inland port established on the former site of Kelly Air Force Base]. He said a Mexican customs function for KellyUSA “is something that is still far away … We may be looking at that” in the future.

A world map on the North American Inland Ports Network (NAIPN) on the NASCO website graphically highlights in yellow the trade routes from China across the Pacific ocean, to Mexico at the ports of Manzanillo and Lazaro Cardenas, entering the U.S. through San Antonio.

A Free Trade Alliance San Antonio 2005 summary of goals and accomplishments documents the direct involvement of the Bush administration into the development of San Antonio’s inland port NAFTA plans. The following were among the bulleted points:

* Organized four marketing trips to Mexico and China to promote Inland Port San Antonio and met with prospects. Met with over 50 prospects/leads during these trips.

* Continued to pursue cross border trucking by advocating a pilot project with at least two major Mexican exporters as potential subjects. Worked with U.S. Department of Transportation, Dept. of Homeland Security and U.S. Trade Representative on this concept.

* Working with Mexican ports to develop new cargo routes through the Ports of Manzanillo and Lazaro Candenas.

* San Antonio is on the route of the Trans-Texas Corridor planned to be built along I-35 from Laredo, Tex., on the Mexican Border, north through Dallas, en route to the Oklahoma border.

The development of a China-Mexico trade route reflects a fundamental shift since the passage of NAFTA. At the peak in the mid-1990s, there were some three thousand maquiladoras located in northern Mexico, employing over 1 million Mexicans in low-paying, assembly sweat-shops. Today, even Mexican labor is not cheap enough for the international corporations seeking only to maximize profits. According to the Federal Reserve Bank of Dallas, that bubble has burst and the maquiladora activity is down over 25 percent from the peak as the international corporations have found even cheaper labor in China.

As the Port of San Antonio evidences, linking NAFTA inland ports with NAFTA super-highways and NAFTA railroads is an important part of the development plan for the emerging global free trade economy. San Antonio officials by working with the communist Chinese to open Mexican ports for NAFTA trade evidence that plan. International capitalists are now determined to exploit cheap Mexican labor, not so much for manufacturing and assembly, but as a means of saving port and transportation costs in the North American market.

The Bush Administration seems on-board with the plan, aiming to increase corporate capital gains in NAFTA markets rather than worrying about the adverse consequences to Mexican low-skilled workers or to the U.S. labor movement that transferring increasing amounts of manufacturing and assembly to China entails.

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