Moodys: SH 130 Toll Road in 'Technical Default'

Link to article here.

Moodys: SH 130 Toll Road in 'Technical Default'
By Jim Forsyth
WOAI News Radio
Friday, July 11, 2014

  Moody's Investment Service today declared the southern half of the State Highway 130 toll road to be in 'technical default,' saying it rescheduled rather than made a June 30 payment on it's $1.1 billion debt, Newsradio 1200 WOAI reports.

  "By executing a waiver agreement, we understand that the project is not in legal default," according to a Moody's investor note.  "However, Moody's view is that the failure to meet the full payment that was originally scheduled for June 30, 2014 constitutes a default under Moody's definition."

P3 woes in India

Link to article here.

Economic Survey: Reduce tariff if toll road operators don’t deliver
Times of India
July 10, 2014

NEW DELHI: In a move to ensure that toll roads are maintained well and expanded to meet the growing traffic, the latest Economic Survey has recommended to the government to examine whether the contract can provide for "reduced tariff" if the operator fails to meet the promised services.

The report has recommended that international practices such as 'traffic trigger' and 're-equilibrium discount' could be examined to address some of the problems faced in the sector. A 'traffic trigger' clause in the contract implies that once a certain volume of traffic is reached, the concessionaire is obligated to increase the capacity so that minimum level of service is maintained. The 're-equilibrium discount' is used to reduce tariff when performance parameters are not met. In such case a table of discounts is pre-defined in the contract.

Considering the major problem in the execution of road projects on public-private partnership (PPP) mode, the Survey has recommended an alternative strategy. It said government agencies can award projects as engineering contracts to build the asset in which the construction company is protected from political and regulatory risks. In such cases, the government bodies would bear the cost of construction.

Soon after the construction is over, a second contract can be given out to a private firm to toll the asset for one year and produce data about present levels of toll revenue. "This could set the stage for a long-term, say contract combining tolling and maintenance. These projects would be able to absorb a high level of long-term bond-market financing, and thus yield low tolls," the Survey said.

It said these firms would generate cash flows for the government which would offset the original expenditure for constructing the asset.

For all infrastructure sectors, the Survey has said lack of consistency in policies needs to be addressed urgently apart from removing procedural bottlenecks. "Removing procedural bottlenecks, improving governance, and above all maintaining consistency in government infrastructure policies are some issues that need to be urgently addressed," the report said.

The document highlighted how as many as 110 out of 239 central sector infrastructure projects, each costing Rs 1,000 crore or above, have reported delays, which range up to 26 months in cases of steel, coal, power and petroleum projects.

The total original cost of implementation of these projects was about Rs 7.4 lakh crore and their anticipated completion cost is likely to be Rs 8.98 lakh crore, implying an overall cost overrun by 21.3%, it said.

The Survey mentioned that while growth in power and fertilizers segments was higher, sectors like coal, steel, cement and refinery witnessed lower growth.

Special interests lobby to rip-off taxpayers with P3s

Link to article here.

Big money's optimism is certainly warranted since they structure every deal to fleece the taxpayer and grant themselves government-sanctioned monopolies. Government is complicit in the scheme as the big money greases their wheels...our politicians are supposed to be safeguarding the public interest yet their fiduciary duty is nowhere to be found among the graft.

Big-Money Optimism but Many Unanswered Questions About Private Infrastructure Investment
By Tom Curry
Roll Call
June 24, 2014

Senate Finance Chairman Sen. Ron Wyden spoke for many transportation officials when he said recently, “There are hundreds of billions of dollars in private capital sitting on the American sidelines. Surely some of that can be invested in American infrastructure.”

Probably no topic is hotter right now in the public infrastructure world than private-public partnerships, which aim to entice the owners of those hundreds of billions of dollars of private capital to invest in rebuilding and expanding the nation’s highways, ports and bridges.

Inspector general delves into 460 in VA

Link to article here.

The corruption with P3 contracts continues...meanwhile Texas doesn't have an Inspector General to watchdog such deals despite taxpayers insisting on one. Such fraud is most assuredly happening in lax Texas.

Inspector general delves into 460
By Matthew Ward
Thursday, June 19, 2014

Virginia’s transportation secretary has asked the state Inspector General’s Office to join its internal review of the Route 460 project.

“Secretary Layne directed VDOT’s Assurance and Compliance Office to conduct a review of the Route 460 P3 project,” department spokeswoman Tamara Rollison said Thursday.

The office’s multi-pronged mission, according to VDOT’s website, includes investigating alleged “fraudulent, illegal and/or inappropriate activities.”

Cintra's SH 130 on verge of bankruptcy

Link to article here.

Report: SH 130 Toll Road Company in Danger of Default
By Aman Batheja
Texas Tribune
June 19, 2014

The company behind a privately operated Texas toll road that sports the country’s fastest speed limit is dangerously close to defaulting on its debt, according to a credit rating agency.

According to a report released this week by Moody’s Investors Service, the SH 130 Concession Company, which operates the 41-mile southern portion of State Highway 130, is low on cash and scrambling to get an upcoming payment deadline waived,

The private consortium behind the project owes more than $1 billion and lacks the funding to pay off an upcoming debt payment due on June 30, according to the report. The report adds that the company has “depleted all but $3.3 million of available liquidity reserves.”

In an emailed statement, SH 130 Concession Company spokeswoman Megan Compton did not dispute any of the findings in the Moody's report.

"We remain committed to our long-term investment in SH 130 and are confident that this first-class roadway will play an increasingly important role in relieving congestion along the gridlocked I-35 corridor as Central Texas continues to grow,” Compton said.

The southern portion of SH 130 between Austin and Seguin opened in October 2012 to much fanfare. Along with boasting an 85 mph speed limit, the fastest in the country, the SH 130 Concession Company had signed a first-of-its-kind-in-Texas deal to build and operate the toll road for 50 years in exchange for a portion of the toll revenue.
Yet the company’s projections for traffic and toll revenue were overly optimistic. In October, Moody’s downgraded $1.1 billion of debt tied to the project by five notches, from B1 to Caa3, considered junk status. The financial situation has not markedly improved, according to the rating agency’s latest report.

“Fiscal 2013 revenue performance was about 60 percent below original forecast and fiscal 2014 is likely to be 70 percent below the original forecast,” the report states.

Company officials are working with the project’s lenders on waiving a portion of this month’s debt payment while not triggering an official default, according to the report. The company is also attempting to restructure its debt based on a new traffic and revenue study, according to the report.

SH 130 was designed to allow drivers a route to travel through San Antonio and Austin and avoid the traffic on Interstate 35. The consortium spent $1.3 billion to build the southern portion of SH 130, known as Segments 5 and 6. The northern portion (Segments 1-4) is publicly funded.

State officials have expressed hope that the road will someday relieve congestion from Interstate 35, particularly trucks for Mexico passing through the region and headed north. Company officials have also predicted that future development in small towns along the toll road’s route would boost traffic over the life of its 50-year contract.

For most of 2013, TxDOT subsidized trucks to use the road at a discounted rate. That turned out to be a lasting boost to the road’s performance as commercial traffic levels have not dropped since the discount ceased, according to Moody’s.

“Commercial traffic levels have held since the discount ceased and with the strengthening credit profile of Mexico … commercial traffic along SH 130 is likely to grow over the long-term,” the report states.
__________________________________

Link to article here.

SH 130 tollway, now deep in debt, seeks refinancing deal
By Robert Grattan
Austin Business Journal
June 23, 2014

The tollway company that built a section of State Highway 130 is negotiating with several banks in order to refinance much its debt, according to a report by a debt rating agency.

SH 130 Concession Company borrowed $1.18 billion to build the road and was projected by Moody's Investor Service to not be able to make its June 30 debt payments after seeing revenue reach only about 30 percent of original projections. Still, with a refinancing deal in the works with banks that lent the money, default is unlikely, the Austin American-Statesman reported.

The concession company is a partnership of Spanish company Cintra and San Antonio's Zachry Construction Co. SH 130 is the first privately funded, built and operated state highway in Texas. The road is owned by the state, but operated and maintained by Concession Company in keeping with a 50-year agreement worked out with the Texas Department of Transportation.

SH 130 has been cited as an economic development driver for the cities east of Austin. However, the despite the high speed limit and traffic free drive, the road hasn't met revenue expectations.

A company spokeswoman told the Statesman that the road would play an important part in Central Texas as an alternative to the congested I-35.

SH 130 Concession Co.'s debt was not downgraded by the recent Moody's report, though Moody's has lowered its grade in the past.

In its report, Moody's indicated TxDOT could take over the highway in the event of an extended relief event such as a default by paying "a senior debt termination amount." It wasn't clear how much that amount would be, the Statesman reported.

Congress meets with investment bankers profiteers about P3s

Link to article here.

Members of congress are sitting down with investment bankers to ask them how well public private partnerships are working out for the taxpayers. Really? These are the very scoundrels ripping us off charging toll fees in excess of $23/day and congress gives what they say credibility with this charade?

No Simple Calculation in Comparing Public, Private Investment
By Tom Curry
Roll Call
June 17, 2014

When members of the House Transportation and Infrastructure Committee conferred with investment bankers in New York on Monday, one question they wrestled with was how to compare the cost-effectiveness of traditional infrastructure investment (states or other government entities issuing bonds to pay for projects) with public-private partnerships — PPPs or P3s — that give private investors stakes in toll roads and other projects.


Rep. Scott Perry, R-Pa., asked a panel of investment bankers and one academic urban planner “how public infrastructure projects and facilities are evaluated for efficiency and, if there is such a model, do you folks have it?” He wondered, “Are we just now starting to figure that out” and “is there any metric” that determines cost, risk, and efficiency for public projects compared to private ones.

Cintra facing bankruptcy on Indiana Toll Road, too

Link to article here.

Indiana Toll Road operator facing debt woes
Associated Press
Indianapolis Business Journal
June 19, 2014

A state agency says it is monitoring the Indiana Toll Road operator's finances as it works to make an upcoming debt payment on the financing of its $3.8 billion lease payment to the state eight years ago.

The Indiana Toll Road Oversight Board has asked the Spanish-Australian investor group Cintra-Macquarie about the status of the payment it owes this month after state officials made similar inquiries after news reports that it was struggling last year to make an interest payment, board Director James McGoff told The Times of Munster.

Pocahontas reverts to its creditors

Link to article here.

Pocahontas 895 toll road under a new operator
Australian company previously controlled Pocahontas 895
BY MICHAEL MARTZ
Richmond Times-Dispatch
June 17, 2014

Pocahontas 895 has a new operator, a year after an Australian company walked away from a long-term concession for the underperforming toll parkway across the James River between Henrico and Chesterfield counties.

DBi Services, based in northeastern Pennsylvania, quietly assumed control of the parkway — the first road built by public-private partnership in Virginia — on May 15 and informed local government officials two weeks later.

The company took over operation from Transurban, an Australian company whose board of directors voted last June to transfer control of the highway to a consortium of European banks that holds $300 million in debt on the project, not including a $150 million federal loan that must be repaid.

Indiana Toll Road Remains Contentious Infrastructure Financing Case

Link to article here.

Indiana Toll Road Remains Contentious Infrastructure Financing Case
By Tom Curry
Roll Call
June 17, 2014

For Rep. Michael E. Capuano, the senior Democrat in a group of House Transportation Committee members that met with New York investment bankers Monday, the key private infrastructure investment case that needs explaining is the 2006 lease of the Indiana Toll Road by a group of investors including Macquarie Atlas Roads, created by the Macquarie Infrastructure Group, an Australian firm.

As states take a keener interest in public-private partnerships to pay for infrastructure, “the first major one in the country that I remember was the Indiana Toll road and, as I sit here today, I still do not have answers” on the benefits and costs of that deal, Capuano, D-Mass., said during the discussion.

“It’s a relatively straight-up project, it’s not like a water project that might be complicated, it’s not unique” and yet, he complained, there’s not enough data on the cost of the project.

“I need to be able to compare how many cars and how much toll money was being generated before it was sold, and how many cars and how much toll money now. Kind of simple. And we [the Transportation and Infrastructure Committee] haven’t gotten them.”

“If the cars aren’t there [on the toll road], where did they go? And if they’re going on to another road, is that road now need more infrastructure upgrades? Does that other road now have time constraints, now people are being backed up? What about its impact on the rest of our infrastructure? I don’t know the answer,” he said after the event.

Karl Kuchel, chief operating officer of Macquarie Infrastructure Partners in New York, did give the committee members some insights at the roundtable event Monday.

The traffic numbers for the Indiana toll road “are below the projections that were used for the original transaction” in 2006, Kuchel said.

When the Indiana Toll Road transaction was financed, private investors made a $3.8 billion payment to the state of Indiana. Traffic “has not performed to the level of our expectations — no surprise given the economic conditions from when the transaction was completed in 2006 to today.”

But he said, “None of that downside reverts to the public sector. That [loss] goes to equity in the first instance and then to the lenders. So it’s a private-sector risk at the time the transaction was financed. A view was taken on traffic. The present value of that was paid over [to the state] in the purchase price — and the equity and debt holders have to live with that.”

He said the Brisbane, Australia, tunnel example cited to the committee by Columbia University urban planning Professor Elliot Sclar as a case of another private infrastructure investment gone awry was in the same category. It was financed with private money, the project was delivered “and then traffic did not meet projections. From the public-sector perspective, if you wanted to be glib, you would actually say that they [the public] received a piece of infrastructure at well below the cost of its procurement. Because the private sector took the risk on traffic, financed 100 percent of it, and as it turns out, the traffic is not sufficient to justify the return.”

He added, “This is what risk is – and the private sector tries to price it.”

Despite some disappointments, there are still reasons to do private-public partnerships, Kuchel suggested.

He argued that “competition is a powerful driver of efficiency in these transactions. As somebody who invests private capital, PPP transactions can take sometimes years and millions of dollars just to submit a bid. You want to know as you’re going through that process, what the parameters are … and you want know that you will be competitive and hopefully successful. That drives you constantly to be looking at ways in which you can deliver the project more efficiently” – and the cost savings hopefully can be paid through to the taxpayers.

Cintra grabs I-77 public private partnership in NC

Link to article here.

I-77 tolls could be $9 to $11, study says
By the Charlotte Observer
Monday, June 23, 2014

A Mooresville-to-Charlotte round trip on planned Interstate 77 toll lanes is projected to cost $9 during the morning rush hour and at least $11 in the afternoon, according to state documents obtained by a Lake Norman area citizens group.

Widen I-77, which opposes tolls on N.C. interstates, obtained the documents through a Freedom of Information Act request.

The documents predict that Mooresville-to-Charlotte tolls will jump to at least $20 one way by 2035, according to the group.

Lawmakers on collision course with taxpayers on transportation

Link to article here.

Lawmakers on collision course with taxpayers on transportation
By Terri Hall
Examiner.com

It’s been quite a week for transportation in Texas. Senate Transportation Committee Chair Robert Nichols held two interim hearings on highway funding. The first was a lovefest over public private partnerships (P3s) that hand public roads to private corporations who extract extremely high toll rates. The committee, which barely gained a quorum, heard invited testimony from the Texas Transportation Institute (TTI) and three toll authorities about various P3 projects that are advancing. You would think P3s are the greatest thing since cars were invented. The second was a hearing on the state of transportation funding in Texas, the same song as the House Transportation Committee hearing a few weeks ago about the fiscal cliff coming in 2015.

Cintra teetering on edge of bankruptcy on SH 130

Link to article here.

Cintra teetering on edge of bankruptcy on SH 130
By Terri Hall
Examiner.com

It’s hard to resist the temptation to say I told you so. Moody’s reports SH 130 private toll operator Cintra is scrambling to avoid default on the first public private partnership (P3) in the state of Texas. The Spain-based company in partnership with Zachry American Infrastructure is seeking to restructure its over $1 billion in debt and delay its June payment or face default. In less than two years in operation, the southern 41-mile stretch which opened in October 2012 with much fanfare and boasting by Governor Rick Perry now faces bankruptcy.

Indiana toll road rates to double under Cintra-Macquarie


Link to article here. Notice to entice drivers into the big daddy government system of vehicle tracking/monitoring through electronic toll tags, they delay your rate hikes. Note that truckers don't get any mercy. Their rates will double, tag or no tag. Don't think that cost won't get passed on to you sand I. Considering truckers began boycotts over gasoline prices, this makes their plight to stay in business even tougher!

Toll Road rates rise

Electronic passes get drivers shorter lines, no hikes till 2016

By Angela Mapes Turner

The Journal Gazette

April 2, 2008

Angela Mapes | The Journal Gazette

Cash customers on the Indiana Toll Road, shown Tuesday near the Ohio line, will now pay $8 to travel across the state, up from $4.65. ITR Concession Co., the road’s operator, urged customers to begin using i-Zoom, an electronic toll-collection system, to save over cash rates.

For more
• To see a full toll rate schedule for the Indiana Toll Road or learn more, visit
www.getizoom.com or call 1-888-496-6690.
ANGOLA – Drivers paying cash Tuesday on the Indiana Toll Road got something extra with their change and receipt – a brochure advising them to save up to 75 percent on tolls by using an electronic pass.

Savings sounded like a good idea to Jenny Krouse of Fort Wayne who already had two financial factors on her mind Tuesday morning as she headed with her daughter to Sandusky, Ohio: High gasoline prices and Indiana’s 1 percentage-point sales tax increase.

Higher tolls were the icing on the cake.

For the first time since 1985, tolls for cars and other two-axle vehicles rose at 12:01 a.m. Tuesday, from $4.65 for the entire length of the road to $8. But car drivers using i-Zoom, an electronic toll-collection system, did not see the rate increase – and they won’t until 2016.

Vehicles with three axles or more, regardless of whether they use i-Zoom, also saw increased fees.


When Gov. Mitch Daniels’ administration agreed to the 75-year lease of the Toll Road to a Spanish-Australian consortium in 2006, a provision for increasing the toll rate was included. The consortium formed ITR Concession Co., paying the state $3.8 billion to collect all the highway’s toll revenue until the lease ends.

At the James Whitcomb Riley Travel Plaza just east of Interstate 69, the last travel plaza on the Toll Road before drivers reach Ohio, regular unleaded gasoline was $3.69 a gallon Tuesday morning. But like Krouse, many travelers were also focused on the toll increases.

Bothering Elkhart resident Paul Selman almost as much as increased tolls was the fact that the small tickets being printed out at toll booths didn’t include a toll rate schedule. Selman, headed east to see his granddaughter, had read in his local newspaper that prices were going up, but he wanted to know exactly what he’d pay.

“I’m very frustrated with that,” Selman said.

Including the prices on the tickets is just a small kink in a process that otherwise has gone smoothly, a representative of the Toll Road’s operator said Tuesday.

The toll rate schedule had to be removed to accommodate both an old system of card readers that used bar codes and a new one that uses magnetic strips, spokesman Matt Pierce said.

All but a few of the old card readers have been phased out, so when the bar code is removed, it will be replaced by the toll schedule – likely within two weeks, Pierce said.

The increased revenue from the toll increases will mainly be used for operating expenses, including health care for employees and diesel for snowplows and maintenance vehicles, Pierce said.

“We’re also looking at the needs of the shareholders,” he said.

Indiana’s Toll Road rates had been among the lowest in the nation. A trip about the length of the Indiana Toll Road on the Pennsylvania Turnpike costs a car about $11, according to a calculator on the road’s official Web site. A similar 159-mile trip on the Ohio Turnpike – from the Westgate plaza to the Strongsville/Cleveland exit, for instance – is $7, according to another calculator.

At a rest stop near Angola on Tuesday, Michigan truck drivers Jack Chapin, Gerrit Haaksma and Jack Hoffius took a break on their way to deliver vehicles to Indianapolis. He doesn’t like the idea of paying a toll in any case, but Haaksma said he hopes the money will be put into improving the Toll Road, which he called one of the worst he’s driven. Hoffius and Chapin agreed.

The truck drivers said they wouldn’t rule out taking an alternate route such as U.S. 20, which runs through the heart of Angola, if it seemed cheaper or more efficient.

That worries Angola Mayor Richard Hickman. Many in the city lobbied against toll increases when they were proposed in 2005, and Hickman said the traffic has not decreased in that time.

Hickman said his mother counted 21 trucks in 20 minutes Monday while looking out the window of Hickman’s home on U.S. 20 east of the city. Both the speed and the volume of traffic concern city officials, although police have increased some patrols and the Indiana Department of Transportation has begun monitoring truck traffic.

“We still have concerns, because the traffic has not gone down,” Hickman said.

But Steuben County Commissioner F. Mayo Sanders doesn’t believe the toll increases will cause more traffic on U.S. 20. He hopes the lower i-Zoom price rates – which come with a promise of lines three times shorter than cash lanes – will entice drivers to stick to the Toll Road.

NAFTA transportation network alive and well

Link to article here.

PREMEDITATED MERGER
Mexican official says NAFTA includes superhighways
'Transportation linking the United States, Mexico and Canada is key to the future'
By Jerome R. Corsi
© 2008 WorldNetDaily
March 18, 2008

While President Bush and other U.S. officials have derided fears of a NAFTA superhighway as merely conspiracy theory, a Mexican transportation expert contends the trade agreement includes plans for a network of international ship, rail and truck connections to deliver consumer goods from China and the Far East to Mexico, the U.S. and Canada.

"Transportation linking the United States, Mexico and Canada is key to the future of NAFTA," Eduardo Aspero, president of the Mexican Intermodal Association, told a recent luncheon sponsored by the Free Trade Alliance San Antonio.

In transportation economics, the term "intermodal" refers to the ability to move a container by crane to different modes of transportation, including ship, truck and railroad, without having to unpack or repack the container.

"It was interesting how the NAFTA transportation network so vehemently denied by the U.S. government was alive and well in Aspero's speech and openly discussed in San Antonio," said Terri Hall, founder of the San Antonio Toll Party.


WND reported President Bush, while attending the third annual summit of the Security and Prosperity Partnership meeting in Quebec last August said in an internationally televised press conference that those who believe the SPP might lead to NAFTA superhighways or a North American Union are "conspiracy theorists."

Hall, who attended Aspero's San Antonio speech, is a political activist whose website, TexasTurf.org, is dedicated to fighting the Trans-Texas Corridor and the expansion of toll roads in the state.

Aspero focused on plans by the Chinese firm of Hutchison Ports Holdings to develop the deep-water Mexican ports of Lazaro Cardenas and Manzanillo, on the Pacific Ocean south of Texas, to bring containers from China into North America.

As WND has reported, Hutchison Ports Holdings is paying billions of dollars to deepen Mexican ports such as Lazaro Cardenas and Manzanillo in anticipation of the arrival of post-Pamamex mega-ships capable of holding up to 12,500 containers currently being built for Chinese shipping lines.

WND also has reported how the U.S. southern border is being blurred for the benefit of global trade, with the official website of the Mexican northeastern state of Nuevo Leon disclosing plans to extend the Trans-Texas Corridor south through Monterrey to connect with Pacific ports in Mexico.

Aspero noted that currently 400,000 containers a year are being transported by truck and rail from Mexican ports on the Pacific into the U.S.

"The purpose of ports such as Lazaro Cardenas is to facilitate the cost-efficient transportation of container goods from Asia into the United States," he explained.

"Lazaro Cardenas is the new hope for intermodalism in Mexico," Aspero said, noting that Lazaro Cardenas is Mexico's deepest port at 49 feet, capable of accepting virtually any cargo ship in the world.

"Aspero noted that the largest markets for the Chinese-manufactured goods are at the center of the United States and in the Northeast," Hall said.

"He was trying to explain why multi-national corporations engaged in global trade continue to pressure the Bush administration," she continued. "Their goal is to cut loose American longshoremen on the West Coast in favor of the cheaper Mexican labor that can get goods into the interior of the United States through the southern route from these Mexican ports on the Pacific."

Aspero also argued the Automated Manifest System (AMS) put in place by U.S. Customs in 2002 is a key development in North American intermodal transportation.

"AMS allows cargo from Asia to go through Mexican ports virtually without any physical inspection," he explained. "AMS pre-clears cargo at the point of origin, not at the border when the container enters the United States."

Spanish firm using loan from U.S. to build segments of Texas toll road

Link to article here.

Spanish firm using loan from U.S. to build segments of Texas toll road
By David Tanner
Landline Magazine
March 13, 2008
Officials with the Spanish toll road operator Cintra have announced that the company has secured $430 million in loans from the U.S. government to build and operate two segments of a toll road in central Texas.

Cintra officials announced the company’s financial plan for the $1.36 billion Highway 130 segments on Monday, March 10.

OOIDA Senior Government Affairs Representative Mike Joyce told Land Line that the Association does raise red flags when federal dollars are used to subsidize private investors. Officials with the Owner-Operator Independent Drivers Association are not, however, categorically opposed to a state using future toll revenue to pay off bonds.

“I’m skeptical of any funding schemes that involve the private sector,” Joyce said.

Truck tolls on Segment 5 and Segment 6 of Highway 130 are contracted to be 50 cents per mile when the road opens. The 50-year contract includes a formula for increases. Tolls for cars will start at 12.5 cents per mile.

Cintra and its partner in the project, Texas-based Zachry American Infrastructure, signed a contract a year ago to design and build a 40-mile portion of Texas Highway 130, a tolled bypass of Austin running parallel to Interstate 35 in the Austin-San Antonio corridor.

The first four segments of the Highway 130 project, totaling about 50 miles, are part of the Central Texas Turnpike System constructed from 2002 through early 2008 with bonds issued through the Texas Transportation Commission. Tolls on those sections are being used to pay the bonds on the first four segments.

The Cintry-Zachry consortium, formed in 2005, expects to begin construction next year on Segment 5 and Segment 6 of Highway 130 on rights of way leased from the Texas Department of Transportation. The 40-mile section is scheduled to open in 2012.

A similar Cintra-Zachry partnership is designing the first leg of the Trans-Texas Corridor, a proposed 4,000-mile network of toll roads and railway lines to increase the flow of freight and people from South Texas to the U.S. heartland.

Cintra also has a 55-percent share of the lease for the Indiana Toll Road and a 50-percent share of the Chicago Skyway lease. The company partnered with companies affiliated with Macquarie Bank of Australia for those deals.

For the Highway 130 segments being built by Cintra-Zachry, TxDOT has agreed to provide and pay for “back office” functions including toll collectors, other staff, call center, equipment, transponders and maintenance for the roadway.

Cintra’s financing will come from a 35-year, $430 million loan from the Transportation Infrastructure Finance and Innovation Act of 1998 – a U.S. Department of Transportation program for jump-starting construction – along with a $686 million private bank loan and $197 million in shareholder equity. Cintra will also draw on other equity accounts, officials stated in a press release.

The TIFI Act program is designed to match a certain percentage of the cost for a road built using private sector money. U.S. Transportation Secretary Mary Peters stated in a press release that the TIFI Act loan will give Highway 130 “the push it needs.”

OOIDA’s Joyce points to the comparison between Cintra’s 35-year loan from the federal TIFI Act program and the 50-year concession agreement for Segments 5 and 6.

“We know that they’re looking to turn a profit,” he said.

Click here to read some quick facts and figures posted by Cintra about Highway 130.

Click here to read contractual documents on the project posted by the Texas Department of Transportation.

U.S. DOT violating the law by continuing Mexican trucking program

Link to article here.

It shouldn't surprise any of us that those eroding our sovereignty and those who care more about NAFTA than they do their own country's citizens think they're above the law. Here, here, Senator Dorgan. There had better be a consequence for such a flagrant violation of the law by President Bush and Secretary of Transportation Peters!

Senator questions allowing Mexican trucks in U.S.
Associated Press / USA Today
March 11, 2008

WASHINGTON (AP) — A senator wants Congress' investigative arm to determine whether the Transportation Department has broken the law by spending federal money on a program allowing Mexican trucks on U.S. roads.
Sen. Byron Dorgan, D-N.D., called for the investigation by the Government Accountability Office a few hours after Transportation Secretary Mary Peters warned of economic losses if Mexican trucks are prohibited from driving deep into the U.S.

Peters has been fighting in court to prevent the program's end. But Dorgan and others say Congress prohibited spending money on the program last year.


"When Congress passes a law that says no funds can be used for this program, we mean no funds can be used for this program," Dorgan said in a news release. "The Department of Transportation cannot simply pick and choose which laws they want to follow and which laws they want to break."

Dorgan said the agency is violating the Anti-deficiency Act, which prohibits spending federal money that has not been authorized or appropriated.

The North American Free Trade Agreement gave Mexican trucks greater access to U.S. roads beginning in 1995. But the U.S. only opened the roads to a few trucks when the pilot program began last September.

Long-standing opposition from labor and safety groups had kept the trucks off most U.S. roads. Without the program, Mexican trucks are confined to about 25 miles beyond the border, where goods they bring are picked up by U.S. truck drivers.

Peters said Monday the agency is not violating the law. The law prohibits using funds to establish the program, she said, but the money is being used on the existing program. The agency has made similar arguments in the 9th U.S. Circuit Court of Appeals, which is considering an appeal by the International Brotherhood of Teamsters to stop the program.

The action was a prelude to a potentially bitter Senate committee hearing on the program planned for Tuesday, with Peters scheduled to testify.

Earlier Monday, Peters said U.S. business would suffer if the trucking program is stopped.

"Should Congress ... end the cross-border trucking, Mexico has every right to impose fees and tariffs on the very goods we see before us this morning and many more," Peters told a news conference. Before her were tables loaded with apples, ham, soybeans, rice, eggs, canned chili and meat, beef, milk, whiskey and other products.

Todd Spencer, vice president of the Owner-Operator Independent Drivers Association, called Peters' claims "economic fear-mongering."

"The program is supposed to work both ways across the border, and yet there are very few signing up on either side," Spencer said in a statement. "Big businesses want the cheap labor, but for a number of reasons trucking companies on both sides of the border don't want to get involved."

The latest numbers from the Transportation Department show 18 Mexican carriers with 62 trucks and six U.S. carriers with 46 trucks are participating in the program. Up to 500 trucks from 100 Mexican carriers can participate.

Mexican trucks have made 322 crossings into the U.S., while U.S. trucking companies have made 683 crossings into Mexico.

James Hoffa, president of the International Brotherhood of Teamsters, said he does not buy Peters' argument that Mexico will sanction U.S. goods with higher tariffs in retaliation. Mexico has a $70 billion trade surplus because of NAFTA and "they'd be foolish to do it," Hoffa said.

Ricardo Alday, spokesman for the Mexican Embassy in Washington, said Mexico is keeping its options open.

Feds give Cintra-Zachry taxpayer-backed, low interest loan for private gain

Link to release here.
.
Read about the public-private partnership the State of Texas inked with Cintra, a Spanish company, and Zachry, a San Antonio Construction Company, here. The low interest loan mentioned below is backed by the U.S. taxpayers and represents about a third of the cash brought to the table for the SH 130/TTC-35 project. It also exploits the taxpayers in order to benefit a private, for-profit company!

FOR IMMEDIATE RELEASE
Monday, March 10, 2008
Contact: Nancy Singer
(202) 366-0660
FHWA 06-08

U.S. Department of Transportation Approves $430 Million Loan to Complete New Alternative to Congested I-35

WASHINGTON, DC - A $430 million loan from the U.S. Department of Transportation will give Texas the financial push it needs to help complete a new north-south highway as an alternative to the congested I-35 from Austin to San Antonio, U.S. Transportation Secretary Mary E. Peters announced today.

"We're helping give this project the push it needs so commuters can experience less congestion, shippers less delays and the region less headaches," Secretary Peters said.


The new southern portion of the four-lane highway is scheduled to link to the already opened northern one in 2012. When complete, the 91-mile SH 130 corridor will be entirely tolled and provide a new route to take traffic off the most congested section of I-35 in the central United States.

Cintra and Zachry American Infrastructure will finance the $1.36 billion project through the USDOT loan, bank loans and investor capital. Electronic tolling will make it possible for drivers to pay the toll without having to use cash at a tollbooth.

The loan was made possible through the Department's innovative Transportation Infrastructure Finance and Innovation Act (TIFIA) loan program which encourages private sector participation in the financing of highway projects with flexible repayment terms.

Secretary Peters added that the Texas project was another example of the private sector's readiness to invest in U.S. transportation infrastructure and of an evolving federal approach to financing major capacity improvements.
# # #

First highway under foreign control, TxDOT inks deal for 1st leg of Trans Texas Corridor


Link to article here.

It's referred to as SH 130 in this story, but it's also the first leg of Trans Texas Corridor TTC-35. Anyone who still thinks privatized toll roads speed up construction and save us money needs to look no further than the third paragraph of this story which states: "Hundreds of documents and over 20 lawyers were involved last week representing TxDOT, private equity people, banks, mostly European, the TIFIA loan group from FHWA (Federal Highway Administration), and Cintra and Zachry."

Twenty lawyers? The waste of taxpayer money and the time it takes to negotiate these contracts is OUTRAGEOUS! TxDOT first announced Cintra-Zachry was being awarded the SH 130 contract in March of 2007. Here it is a year later and they're just now inking the deal?

Cintra/Zachry complete legal work on $1.36 billion financial close with TxDOT on SH 130
Toll Road News
March 10, 2008

SH 130 Concession Company LLC finalized the legal details of a financial close with Texas DOT on a $1,360m toll concession to build SH130 segments 5&6 Thursday and Friday last week in bankers' offices in New York City - at Orrick, 666 Fifth Avenue. The actual money flows should occur on Thursday or Friday (Mar 13 or 14) this week, Jose Maria Lopez de Fuentes, president of Cintra North America, told us this morning.

Hundreds of documents and over 20 lawyers were involved last week representing TxDOT, private equity people, banks, mostly European, the TIFIA loan group from FHWA, and Cintra and Zachry. SH 130 Concession Company LLC is the special purpose company is owned 65% Cintra, 35% Zachry.

Lopez told us: "The details were all done and the champagne was brought out (by Friday afternoon). It was hard work. But it was good. Everyone was there wanting to be helpful. There are now two or three business days for due diligence (before the money moves)."

Despite "constriction" in financial markets

In a statement Lopez is quoted: "This is an exciting milestone in the development of a much-needed roadway in Central Texas. This financial achievement on the part of our team is especially noteworthy given the current constriction in the financial markets. We now look forward to developing a state-of-the-art expressway system that will provide drivers congestion relief and greater safety."

 The concession contract was signed in June 2006. However it could not be brought to financial close until permitting was complete.

The concession company has paid TxDOT the $25.8m upfront concession fee for the right to collect tolls on the new road for 50 years. It has a contract with associated companies Ferrovial Agroman and Zachry Construction for construction of the 40 mile (64km) 2x2 lane expressway which will extend the TxDOT constructed SH130 segments 1 thru 4 from the the interchange with TX45 South, on southeast edge of Austin to I-10 at Seguin. Seguin is not far outside San Antonio in a northeasterly direction.

Final design and land acquisition is under way and construction work should start early 2009, Cintra says. Completion should be by 2012 or earlier.

The road will be an all electronic tollroad - no cash collected.

On completion segments 5 and 6 will turn SH130 into an alternative route to I-35 for traffic between Georgetown and San Antonio - constituting a bypass of the Austin metro area and many other settlements that have clustered along the old interstate.

Cintra says the new expressway will "serve not only regional traffic but also offer an alternative to Interstate Highway 35 (I-35) between San Antonio and north Austin, making it possible for medium- and long-distance drivers to avoid the bottlenecks that are becoming increasingly common in Central Texas. This new high-capacity expressway will also help absorb existing and expected growth in long-distance truck traffic, further relieving congestion on I-35, Texas’ primary north-south route."

Skeptics say the new tollroad will not even attract 5-digit - let alone viable 25k+ - daily traffic volumes for many years and that it is too dependent on congestion on I-35 and on development occurring close-by it. Only on the northern end of the new tollroad will there be much local traffic oriented for trips into the rest of the Austin region and that traffic will have free alternates.

The road does seem to make most sense as part of a longer route from the Dallas area to San Antonio and beyond - to the Trans Texas Corridor 35 (TTC35). In any case the investors are putting their money, as the saying goes, where their mouth is. Central Texas gets a valuable new highway without expense to taxpayers.

Speed/concession fee tradeoff

An innovative aspect of the TX130/5&6 concession is the arrangement for higher concession payments if higher posted speeds are approved by the legislature. Details of the concession were posted in these articles:

http://www.tollroadsnews.com/node/3433

and http://www.tollroadsnews.com/node/1535

Concessions may follow from TTC master contract

Cintra has a right of first refusal to negotiate any new concessions for Trans Texas Corridor 35 (TTC35) from near Georgetown north into the Dallas area and onto the border. Cintra was selected in December 2004 to work toward concessions on 509km (316mi) of TTC35 tollway that was said to involve a possible $6 billion worth of work. This was called a Master Development comprehensive development agreement (CDA). CDA is the unique TxDOT umbrella term for a variety of contracts that range from small consulting jobs through design-build, project development work and large multistage concessions.

http://www.tollroadsnews.com/node/953

The TTC35 Master Development CDA was only firmed up into a < $10m project development contract with TxDOT for studies and planning of the first part of TTC35 extending from the Oklahoma border through Dallas area to San Antonio, though it gives Cintra a kind of right-of-first-refusal to negotiate actual concessions.

SH130 is not formally part of TTC35 yet, but it is logically part of it, and noone has suggested any separate road would be viable.

BACKGROUND: Cintra, one of the world's largest private-sector transportation infrastructure developers, is a publicly traded company whose majority stockholder is the 100k employee Ferrovial Group. Cintra manages and operates more than 2,800km (1740 miles) of toll road, which represents a managed investment of more than $24 billion. With this project, Cintra will have a stake in companies managing 23 toll roads, in Spain (7), Ireland (2), Greece (2), Portugal (3), Chile (5), Canada (1) and the United States (3). Additionally, Cintra is Spain's leading parking lot operator and manages more than 266k parking spaces, a Cintra statement says.

Deal with Cintra in N. Carolina for I-77 will soak commuters

Link to article here.

It's outrageous that any state DOT would hand over a major interstate based on a single bid! Even worse that they'd donate the right-of-way purchased with taxpayer money and taken with eminent domain to a private corporation! Private toll roads are the MOST expensive way to expand roads and are a threat to property rights. Commuters will be fleeced with $20/day tolls by this private foreign corporation whom they cannot hold accountable in any way. Losing control of our public roads is criminal malfeasance.

NCDOT Toll Lanes Deal with Cintra Would Slam Commuters
June 10, 2014
by Kurt Naas
Watchdog Wire

In early April the NCDOT announced they had selected Cintra, a Spanish company, as the contractor for the I-77 toll lane project. As it turns out, the Cintra bid was the only one received. Under the terms of the contract, NCDOT will donate the remaining public right-of-way  and grant Cintra an exclusive concession to design, build and operate toll lanes along the Lake Norman stretch of I-77 for the next 50 years. The NCDOT noted Cintra’s proposal had been subject to an extensive review of over 300 pass/fail criteria, and the Cintra package met all of them.

TTC keeps stoking the grassroots angst over eminent domain abuse, foreign control

Trans-Texas corridor stirs controversy
Jim Brown - OneNewsNow - 2/26/2008

The debate in Texas over a proposed 4,000-mile network of toll roads that will parallel the state's existing highway system is heating up

More than 10,000 people have attended public hearings across Texas to discuss the proposed Trans-Texas Corridor, which has also been dubbed the "NAFTA superhighway." It is a project that is expected to cost an estimated $183 billion over 50 years. (hear audio report)

Terri Hall with the group Texans Uniting for Reform and Freedom warns the project will create widespread eminent domain abuse and involve foreign control of public infrastructure. "They're taking huge swaths of land, up to a million acres of private Texas farm and ranch land," warns Hall. "Some of it is prime agriculture land ... and they're going to take that land and hand it over to private entities for commercial gain."

Hall accuses Congress of pulling a "bait and switch" when they promised Texas taxpayers a free interstate. "They designated this corridor route an international trade corridor back in 1995," argues Hall. "So for Governor Perry, or any of those folks who are trying to push toll roads here in Texas, to try and say that this road stops at the Texas border ... that it's not a NAFTA superhighway ... it is an international corridor and it has been designated as such."


Hall alleges that Governor Perry is "representing the interest of private industry over the public good," noting he has accepted more than $1 million worth of campaign contributions from road contractors and the "road lobby."

But the Republican governor is dismissing the concerns of some state residents who are upset the proposed 4,000-mile Trans-Texas Corridor running from Laredo to Canada will turn operation of the public highway system over to private, if not foreign companies. (hear part two of audio report)

Critics of the proposed highway project claim it was never approved by voters, and Congressman Ron Paul (R-Texas), CNN's Lou Dobbs, and others call the project a "NAFTA superhighway" and warn it will be part of a "North American Union" between the U.S., Mexico, and Canada.

Governor Perry calls critics of the Trans-Texas Corridor "unenlightened." "Here's what's more important rather than all of the black helicopter ... conspiracy theories," argues Perry. "We have many, many multi-national groups that run various things ... in the United States as we do in other countries, and nobody is going to roll up our highways and carry them back to Spain."

According to Perry, there is a reason CEO Magazine selected Texas as the number-one state to do business. "... [U]nderstand you have to have a transportation infrastructure system in place so that people can get from point A to point B, and they don't spend all their time in gridlock instead of being with their kids at soccer practice or back home with their families," Perry explains.

Governor Perry maintains the controversial transportation network is necessary to "move [the state's] people and product around" and reduce road congestion.
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