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Senate poised to hand public freeways to private toll operators
(Austin, TX, April 1, 2009) Texans don’t want their PUBLIC highway system sold to the highest bidder, nor do they want corporate-run toll roads that cost commuters 75 cents a mile to get to work. Private toll road contracts are due to sunset this fall. Today, the Texas Senate will vote on whether to extend these contracts called Comprehensive Development Agreements (CDAs) in Texas also known as public private partnerships (PPPs). CDAs need to sunset. In 2007, Texans stood-up and demanded a moratorium on CDAs and sent a bill to the Governor with a combined vote of 169-4.
So what happened to our politicians? Do they think Texans have changed their mind and will choke down the loss of control of our public highways and such oppressive taxation?
Hardly. The public is largely unaware of what our politicians are about to ram through, and they think they took care of it two years ago only to wake-up to find the nightmare continues unabated.
These deals cost taxpayers 50% more, are failing all over the country, and result in extremely high tolls, like the DFW contracts just signed with Spain-based Cintra that will charge commuters 75 cents a mile to get to work. That’s $3,000 a year in new toll taxes. Especially in these economic times, that’s completely unsustainable. There were 20 lawyers present at the signing of the SH 130 CDA. TxDOT has squandered at least $18 million on legal fees alone for just the TTC-35 CDA. When TxDOT is claiming we’re out of money for roads, CDAs are the height of hypocrisy.
CDAs are the most risky and expensive method of delivering toll projects. How quickly the testimony from Dennis Enright of Northwest Financial in New Jersey before the Senate Transportation Committee March 1, 2007 has been forgotten. Mr. Enright said there is no risk transfer to the private entity and that CDAs cost the taxpayers of a minimum of 50% more than public toll roads. Mr. Enright rightly called toll roads monopolies by their very nature. He also said it’s always best to keep these projects in the public NOT private sector.
So why are CDAs being discussed at all? Public infrastructure that Texans depend on for daily living shouldn’t be under the control of private companies whose primary motive, naturally, is profit, not the public interest.
The way the current bill, SB 17, is structured, if the public toll entity cannot get the financing together to do a public toll road, they'd have to pass
the project to TxDOT who would hand it to the private developer. The bill doesn't give the public any protection, but shows TxDOT how it can just wait it out and then hand projects to the private companies. The bill also allows the whole evaluation process to be waived and TxDOT and public tolling entities can jump precipitously into CDAs. So what’s the point of the bill, if they can waive the requirements and get a free pass?
Texas examples...
The recently signed I-820 deal includes gas taxes, federal TIFIA loans, and other public money yet Cintra gets the right to toll Texans for 50 years and take all the profits out of state. In fact, TxDOT plunked down more cash for the project than did Cintra! (Read it here.)
The LBJ project to toll I-635 uses public employee pension funds to invest in the deal, which is risky and fiscally irresponsible, with toll rates of 75 cents a mile and can rise monthly. TxDOT will even pay Cintra for the loss of the "prevailing toll" revenues due to HOV users and Cintra is guaranteed 12% to 23% PROFIT!
Their models show only 10 & 11% of all traffic will be able to afford to
take these billion dollar toll lanes. The congestion or variable tolling is the most insidious of all where they jack-up the toll rates to guarantee certain speeds or pay TxDOT a penalty for slower travel times. This means they purposely price cars off the toll lanes as a financial incentive.
So what's the point of all this risky, multi-generational leveraged debt? Mobility or making money? We’re headed for an infrastructure bubble that is destined to fail, which is likely to ensure massive taxpayer bailouts when they do. All those cars not on the toll road will be sitting in traffic, contributing to our air quality issues and being late to work while still paying taxes for highways (gas tax) and not getting a thing for it!
Call your state lawmakers and tell them not to let private corporations takeover our public highways. Tell them NO to SB 17, and NO to more sweetheart deals.
Read how CDAs are failing all over the world on our CDA Fact Sheet here.
Terri Hall is the Founder of Texas TURF. TURF is a non-partisan grassroots group of citizens concerned about toll road policy and the Trans Texas Corridor. TURF promotes non-toll transportation solutions. For more information, please visit their web site at: www.TexasTURF.org.