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Follow TURFPerry pushes toll agency to sell, privatize I-35 in Denton
It's significant to note that Deirdre Delisi is Chairwoman of Perry's Texas Transportation Commission and running his presidential campaign at a time when she has the power to direct billions in state contracts to potential campaign donors, like the corporations who will benefit from privatization. The NTTA already knows this project isn't toll viable, so why is Perry's Commission pushing to have it privatized? How will they make money? The same way they all do -- taxpayer subsidies, or public money for private profits.
Gas taxes would build it, but can't use it without paying again through toll taxes:
"With half-a-billon dollars in public money (note: total project cost $3 billion), TxDOT could attract private firms to build the tolled portion of the project -- ie, the two managed lanes in each direction -- and perhaps a small portion of the improvements to the main lanes first. The revenue from those toll lanes would then, supporters hope, be sufficient to help finance the subsequent improvements."
This also shows how diabolical Perry's highway department remains, even after two scathing and a 628 page management audit sunset reviews that could have abolished the agency altogether. So now that the sunset review is over, they're up to their usual bullying that got them into trouble in the first place. Commissioner Ted Houghton even promised TxDOT was no longer in the business of toll roads and that it would defer to the LOCAL toll entities to do it, if they chose. Now that the sunset review is over, TxDOT is NOT deferring to the LOCALS and is foisting its agenda upon them with the MOST expensive way to fund roads that result in toll rates as high as 75 cents PER MILE!
The most shocking statement in this article:
"NTTA executives said this morning that there is no way NTTA could borrow enough to pay for the road because it would take decades before its projected toll revenues would be enough to pay both the debt service on the necessary loans and the operations and maintenance of the road -- even if it is built in stages."
With pressure from state, NTTA board poised to clear way for privatization of I-35E toll project to Denton
By Michael Lindenberger/Reporter
Dallas Morning News
9:50 AM on Wed., Sep. 21, 2011
Free lanes would be expanded; new tolled managed lanes added to I-35E
Update: The board voted 9-0 to waive its rights to develop the project, with the controversial caveat deleted.
Should the NTTA waive its right to develop the Interstate 35E project between Dallas and Denton?
It's a $3.2 billon construction project, and would stretch 29 miles and cover two tolled lanes in each direction, two to three frontage roads lanes in each direction, and between three and four lanes of rebuilt interstate lanes -- big enough, in other words, to make it the largest and most expensive project in NTTA history.
Support for the project is near unanimous from Dallas to Denton to Arlington to Austin. And expectations are high that work on at least part of the project could get underway in the next couple of years, despite its high costs.
But those costs and a strong preference for privatization on behalf of the Governor and his appointees who run the Texas Transportation Commission have likely sidelined NTTA for this project.
Here's why: NTTA executives said this morning that there is no way NTTA could borrow enough to pay for the road because it would take decades before its projected toll revenues would be enough to pay both the debt service on the necessary loans and the operations and maintenance of the road -- even if it is built in stages.
So the staff has recommended to the board that it formally waive its rights to develop the road and by doing so let TxDOT work with local officials to attract a private investor who would finance the road in return for the right to collect tolls. That's an approach that was outlawed by the Legislature in 2009, but given new life again in 2011.
TxDOT wants that project badly enough that Gov. Rick Perry's chief transportation advisor, chairman Deirdre Delisi of the Texas Transportation Commission, called NTTA chairman Victor Vandergriff last night urging him to support the waiver and get his agency out of the way of the project.
The board hasn't voted yet -- though it appears certain they will support the waiver -- because the proposal made by the staff includes a caveat that the waiver would be rescinded if TxDOT kicks in significant tax dollars to make the project more attractive to the private sector. The thinking at NTTA has been if TxDOT is willing to heavily subsidize the project with tax dollars, then why should such funds only be available to the private sector.
The amounts are huge. CFO Janice Davis told board members that a private firm eager to build the project would likely need government assistance to back its debt -- giving it a lower borrowing costs -- as well as upfront payments of hundreds of millions of dollars, and annual payments to assist it in paying its loans.
Of course, TxDOT and other backers of the project are smart enough to see that a caveat that rescinds NTTA's waiver in the event of such assistance is tantamount to no waiver at all, since the assistance is necessary.
That's likely the message Delisi delivered to Vandergriff last night.
So where's that leave the project? NTTA is going to consultant with its lawyers in a few minutes and will likely delete the caveat. If it does, it will give the project to TxDOT.
That will be a mixed blessing for the state, which wants to showcase the power of private investment in highway infrastructure. But as Michael Morris, the transportation chief at the NCTCOG said this morning, with only about $500 million to $600 million in public money available for the more than $3 billion project, the challenges in funding the project through any means will be significant.
What's also clear, however, is that once NTTA moves out of the picture, the state will be free to pump as much money as it can find into the project to secure the interest of a private sector partner. What that means for folks like Denton Judge Mary Horn, who has been pushing for a rebuilt link between Denton and Dallas for years, will likely look like this:
With half-a-billon dollars in public money, TxDOT could attract private firms to build the tolled portion of the project -- ie, the two managed lanes in each direction -- and perhaps a small portion of the improvements to the main lanes first. The revenue from those toll lanes would then, supporters hope, be sufficient to help finance the subsequent improvements.
NTTA has attempted to keep its finger in the pot long enough to get back into the game if the project turns into a primarily toll project. That's the kind of prospect TxDOT wants to avoid, and it is likely what it is going to get once the board meets with its attorneys this morning.
When it meets with its attorneys, the overriding reality will be financial, not legal: With so little money to bring to the table, NTTA is likely to find that it simply can't afford to stay in the driver's seat for the Interstate 35E project.