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New tricks? 'Availability payments' a public private partnership in sheep's clothing
By Terri Hall
May 8, 2013
The Texas legislature is considering another 'tool in the toolbox' to build roads, without the controversial concession public private partnership (P3) model, called ‘availability payments.’ House bill 3650by Rep. Linda Harper-Brown opens the door to this type of P3 where the private sector pays for the road and gets paid back as money is ‘available.’
The argument by proponents is that payments to the private entity are only made if money is appropriated or 'available,' and that it does not constitute a debt to the state. However, this 'tool' puts ALL Texas taxpayers on the hook for repayment of the project. Whether it’s a toll project and revenues are inadequate to repay the obligation or debt to the private company, or a non-toll project, taxpayers are obligated to re-pay the private entity, presumably with interest. Just because the debt is off the balance sheet, doesn't mean taxpayers are not obligated to pay it.
Read more: Putting lipstick on the P3 pig - 'availability payments'
A common myth believed by elected officials who foist these bad deals on taxpayers comes from the idea that the private entity brings all the money to the table for the project and hence takes on the risk if the project fails. That would be how a true private road project would be financed. However, that's NOT the case with public private partnerships (P3s) or CDAs as they're known in Texas.
Here's what the excerpt from the article says:
Hall suggested Loop 1604 isn't even toll viable, and no for-profit company would want to take that risk.
As an example, in its initial months of operation, the Texas 130 extension, which at 85 mph has the highest speed limit in the nation, drew only half the number of drivers originally expected on the toll road.
But Judge Wolff said, so what?
“That's what a concession agreement does, it puts the risk on the concessionaire,” Wolff said. “Seems like the state was pretty smart.”
Read more: Loop 1604 could be handed to private toll operator for 50 years
SOLD: Lawmakers vote to sell-off Texas roads to private corporations
By Terri Hall
Examiner.com
May 1, 2013
Yesterday, the Texas House joined the Senate in voting for SB 1730 (authored by Robert Nichols, House sponsor Larry Phillips) to hand 20 Texas highways to private corporations in controversial contracts called public private partnerships(P3s) or comprehensive development agreements (CDAs) despite public opposition. These sweetheart deals are designed to extract exorbitantly high toll rates, as high as 75 cents per mile, and guarantee profits, using taxpayers to socialize losses and privatize profits.
This crucial vote will effect the next three generations of Texans since P3s grant private, even foreign, entities government-sanctioned monopolies for 50 years. By limiting the expansion of free roads and, in effect, guaranteeing congestion on free routes through non-compete agreements, P3s hamper future transportation needs of the public -- for up to 30 years in Texas. P3s also erode property rights taking land in the name of 'public use,' but turning it into a private purpose for private gain.
Read more: TX lawmakers vote to sell-off 20 roads to private entities
Virginia Residents Protest Against Toll Roads
Virginia residents protest latest plan to convert freeway lanes into a toll road.
The Newspaper.com
April 8, 2013
About 100 residents of Alexandria, Virginia gathered Saturday to protest the conversion of the Interstate 395 high occupancy vehicle lanes into a toll road. The Concerned Residents of Landmark, a group representing eight homeowners associations in the area, are concerned that the plan includes building an elevated ramp that will raise freeway traffic up to the level of nearby homes, within 75 feet of some buildings.
The Virginia Department of Transportation (VDOT) chose to end the toll road at the Landmark location instead of running the toll lanes all the way to Washington, DC because the city of Arlington filed a lawsuit that blocked the toll road from extending north through the city.
Link to article here.
6 Reasons to Be Wary of Public-Private Partnerships
By Laura Barrett
Huffington Post
April 5, 2013
During his recent visit to Miami, President Obama praised Public Private Partnerships ("P3s") and lifted up the idea of a national infrastructure bank. While most Americans support the idea of building a sustainable economy and fixing decaying infrastructure, building up a national system of public-private partnerships is a whole other animal and needs to be carefully considered. The record on P3 agreements is mixed at best.
Read more: Reasons to be wary of public private partnerships
Rating Action:
Moody's downgrades the ratings on SH 130 Concession Company Senior and TIFIA loans to B1
Global Credit Research - 12 Apr 2013
Downgrade affects $1.1 billion of outstanding debt
New York, April 12, 2013 -- Moody's Investors Service has concluded the review period for the ratings of the SH 130 Concession Company. The rating on the Senior Bank Facility, which has $686 million outstanding have been downgraded to B1 from Baa3. The Transportation Infrastructure Finance and Innovation Act (TIFIA) loan, which has $451 million outstanding to B1 from Ba1. The outlook on both ratings is negative.
Read more: Moody's downgrades Cintra's credit rating on SH 130 for foreseeable future
Greenway Toll Hikes Decried At SCC Hearing
Leesburg Today
Wednesday, April 10, 2013
In the first of two State Corporation Commission public input sessions held yesterday at Loudoun Valley High School, a number of speakers decried the toll raises granted to Dulles Greenway’s owners, Toll Road Investors Partnership Trip II.
Opposition came on several fronts—slamming Greenway management Australian hedge fund Macquarie Group for excessive and speculative financial practices; the SCC for not taking a firmer line to control Macquarie’s repeated calls for toll raises; the plight of commuters facing ever-rising tolls; and the intention of some Northern Virginia politicians to assume ownership of the toll road through a budget amendment in the 2014 session of the General Assembly next January.
Study Documents Optimism Bias In Toll Road Traffic Forecasts
Study finds toll road industry plagued by inaccurate traffic forecasting.
The Newspaper.com
April 10, 2013
Toll roads around the world are struggling. Moody's Investment Services on March 21 warned of a possible downgrade of the SH130 toll road in Austin, Texas because the 50 percent fewer people used the road than projected. In Australia, toll operator BrisConnections finally went bankrupt in February after its $4.8 billion Airport Link toll road in Brisbane failed to deliver. In Virginia, the newly opened 495 high occupancy toll lanes have continued to disappoint officials.
President's budget strong on transportation, with a catch
By David Tanner, Land Line associate editor
April 11, 2013
President Obama’s proposed budget shows the administration’s commitment to funding transportation and infrastructure. But while the numbers look good for roads and bridges over the short term, critics say the document lacks a long-term funding solution and gets off track in areas such as sharing highway money with rail and expanding the cross-border trucking program.
Traditionally, a presidential budget request is a wish list, and the one President Obama delivered on Wednesday, April 10, is no exception. The wish list calls for an immediate $50 billion in upfront spending for structurally deficient bridges and other needs.
Read more: Obama pushes more tolls, public private partnerships
Greece On The Auction Block: Country Seeks Bidders For Sale Of Its Railroad Infrastructure By Early 2014
By Angelo Young | April 01 2013
International Business Times
The Greek government has been trying in recent years to sell everything short of its historic Parthenon in an attempt to climb itself out of a massive debt hole.
Now, facing mounting pressure from international lenders to speed up its national yard sale, the government has announced it would begin the tender to sell the Hellenic Railways Organization, known by its Greek acronym OSE, by the end of the second quarter.
Read more: Greece selling off infrastructure to get out of financial trouble
Obama Plans to Sacrifice Ordinary Americans Yet Again in “Public/Private Partnership” Infrastructure Scam
Naked Capitalism
March 31, 2013
Apparently Obama’s idea of a Holy Week sacrifice is to feed American citizens to rapacious bankers, this time through the device of “public/private partnerships” to support infrastructure spending. Some NC readers were correctly alarmed by a speech by Obama on Friday on using public/private partnerships to fund infrastructure spending. This is not a new idea; Obama first unveiled it in his Statue of the Union address. But it is a singularly bad idea, that is, if you are anyone other than a promoter of or investor in these deals.
Toll Roads and Double Taxation: The Left and Libertarians Converge
By Rachel Alexander
Town Hall.com
4/1/2013
Toll roads are appealing to many on the right, because the fees don't look like taxes; motorists are charged for the voluntary action of driving on a specific road. Toll roads appear to be run by private entities, not the government. Also known as turnpikes, they are becoming an increasingly popular way to raise money to build roads, instead of increasing gas taxes which have traditionally paid for highways. Gas tax revenues only have about one-third the buying power they did a decade ago, insufficient to build new roads or maintain existing ones. There are now 5,244 miles of toll roads in the U.S., operating in 35 states.
Link to article here.
Cintra’s credit woes, speed limit hike adjacent to toll road spell trouble
By Terri Hall
Examiner.com
March 29, 2013
It’s been a rough road for Cintra, Spain-based global toll operator, ever since it opened its first privately-operated tollway, State Highway 130, in Texas last fall. Yesterday, the Texas Transportation Commission voted to increase the speed limits on US Highway 183 to 60 MPH through Mustang Ridge and up to 65 MPH on the southern leg that runs through Lockhart, on the freeway that now serves as the frontage road to Cintra’s high-speed tollway. When SH 130 opened, the Commission increased the speed limit to the fastest in the country - 85 MPH - while also lowering the speed limit on the adjacent freeway, US 183 from 65 MPH down to 55 MPH.
The public fury was swift and Caldwell County Commissioners passed a resolution requesting that the Commission return the speed limit on US 183 to 65 MPH. TxDOT claimed it was ‘studying’ the speed limit situation, meanwhile SH 130 experienced its first fatality due to the dramatic difference in speed when a car on the tollway collided with a car getting onto the tollway from the dramatically lower speed frontage road that’s now US 183. The speed differential was believed to be the cause of the fatal accident.
Read more: Cintra’s credit woes, speed limit hike adjacent to toll road spell trouble
Transportation commission lowers truck tolls on Texas 130, raises speed limits on its frontage roads
By Ben Wear
American-Statesman Staff
March 28, 2013
The Texas Transportation Commission unanimously decided Thursday to lower truck tolls on Texas 130 for the next year and to increase the speed limit on the tollway’s frontage roads near Mustang Ridge and Lockhart.
Starting Monday, all vehicles will pay the same toll rates on Texas 130 for its full 90-mile run from north of Georgetown to Seguin, about $17 for the entire trip (or 25 percent less for those with an electronic toll tag). Likewise, all vehicles will pay the same rates on Texas 45 Southeast. Larger trucks with more than two axles currently pay two to four times what cars and small trucks pay, and they will do so again starting in April 2014 unless the Texas Department of Transportation decides to continue the discounts.
Read more: TxDOT lowers truck tolls, increases speeds on free route
Light 130 traffic prompts credit review of toll debt
By Ben Wear
American-Statesman Staff
March 26, 2013
The privately operated section of the Texas 130 tollway south of Mustang Ridge is attracting about half the predicted traffic, according to Moody’s Investor Service, prompting it to investigate downgrading credit ratings for more than $1.1 billion in debt attached to the toll road.
Meanwhile, toll rates for trucks on the entire length of the tollway, from Seguin to north of Georgetown, will likely be lowered for one year to encourage more traffic. That move is expected to put a dent in revenue, however.
Read more: Default coming? Cintra's SH 130 may receive credit downgrade
$3 billion plan would end tolls on Texas 130
By Ben Wear
Austin American Statesman
March 20, 2013
How could the state lure people away from Interstate 35 and onto the Texas 130 tollway several miles to the east? State Rep. Paul Workman has a $3 billion answer to that question: make it free.
The solution proposed in House Bill 3682 by the Austin Republican, whose district doesn’t include Texas 130, likely faces more political hurdles than there are miles in Texas 130 — 90. Some lawmakers Wednesday referred to it as a “statement” bill, in effect no-hope legislation filed mostly to make a point.
Read more: Buy out of SH 130 tollway could make it a freeway
It shows how far off their rockers Republicans have gone...they're actually considering selling off the Capitol, the PEOPLE'S building, in a public private partnership (P3) for commercial developers to wreak havoc with and profit from, including a 47-story building, grocery stores, and tearing down the ONLY public parking garage to make way for condos!
Note that it's primarily Democrats opposed this nonsense, though they're without excuse since they all voted for this disastrous bill (that TURF tried to stop, SB 1048), which opened the floodgates to P3s with NO oversight, accountability, or ANY input from lawmakers or the public.
Guess they had to pass the bill before they knew what was in it!
Legislators addressing development in Capitol complex
By Laylan Copelin
American-Statesman Staff
February 17, 2013
Concerns about plans to build out the Capitol complex have some lawmakers reconsidering the role of public-private partnerships, including changes in state law that could afford Austin neighborhoods some protection from commercial development on state lands.
Public-private partnerships — commonly called P3s — aren’t going away, but powerful legislators are telling Terry Keel, executive director of the Texas Facilities Commission, that the controversial financing option might not be right for the heart of the Capitol complex.
Read more: Republicans try to sell Texas Capitol to developers for commercial development
TxDOT claims a 57% jump in trucks using SH 130 when they are offered the auto rate. A 57% jump from a base number of not too many in the first place, is still a far cry from the revenues needed to make SH 130 financially solvent.
Even with an uptick of trucks on SH 130, all I see twice a week when I drive I-35 is two lanes of bumper-to-bumper big rigs. SH 130 may be gaining a small percentage of trucks temporarily, but with diesel at over $4/gallon, the high speed (85 MPH, which means you blow extreme amounts of gas) on SH 130, and the distance one takes out of the way, it costs a whole lot more than $11 to take this bypass.
Toll cut on Texas 130 entices more big rigs
By Ben Wear
American-Statesman staff
February 13, 2013
The number of big rigs using the Texas 130 tollway has jumped almost 57 percent in the eight days since tolls for multi-axle vehicles were cut by two-thirds, Texas Department of Transportation officials said Wednesday.
Cars and pickups also are using the toll road in greater numbers, compared with the same period a year ago, even though tolls for those vehicles are unchanged, said James Bass, TxDOT’s chief financial officer.
Read more: Slash in toll rates attracts bump in trucks using SH 130
The primary thing to look at with these privately-run toll express lanes is the difference between the forecasted traffic and the actual traffic. Though Toll Road News is cheerleading for the success of these toll lanes, the expected traffic is off by 64% and revenue is 85% less than expected. Scroll down to the end where it tells you all the fines and fees you rack up if you can't figure out how to pay these electronic tolls without an electronic Toll Tag account. These tolls are a threat to your freedom to travel, and can bankrupt you if they mail the bills to the wrong address (which happens frequently with TxDOT).
VA495 Express Lanes report good start after 6 weeks - doing 24k weekdays
Toll Road News
January 11, 2013
Operators of the 495 Express Lanes on the Capital Beltway in the Washington DC area - a Transurban/Fluor subsidiary - report traffic has been building steadily since they opened November 17 and that they are getting "great feedback" from customers via twitter, emails, and calls to the customer service center.
They cite motorists saying the new toll express lanes are saving them up to 20 minutes on their Beltway commutes, that they are "a game changer" and "the best money I've ever spent." On startup they had some motorist confusion and minor incidents at the entry northbound from the Springfield Interchange.
Read more: Virginia's 495 Express Lanes attracting much less traffic than needed
What's TxDOT trying to hide from the public? That our boycott of Texas' first foreign-owned toll road is working?
TxDOT mum on use of new tollway section
By Ben Wear
Austin American Statesman
January 27, 2013
Maybe they should have set the speed limit at 90.
I kid.
I’m referring to the new section of the Texas 130 tollway, of course, the 41-mile stretch from Mustang Ridge to Seguin that last fall was briefly the most famous (notorious?) road in America. Having an 85-mph speed limit will do that.
But has it enticed a substantial number of drivers?
Read more: Boycott success? TxDOT keeps Cintra's early traffic data on SH 130 secret
Latest News
- Putting lipstick on the P3 pig - 'availability payments'
- Loop 1604 could be handed to private toll operator for 50 years
- TX lawmakers vote to sell-off 20 roads to private entities
- Highway Trust Fund needs to be cut 92%?
- VA Residents protest toll lanes on I-395
- Reasons to be wary of public private partnerships
- Legislators pass law to use property tax to build TOLL roads
- Trans Texas Corridor update: Hwy 59 gets I-69 designation
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Latest Press Releases
- Texas for Sale: Texas roads may be handed to private, foreign toll operators
- Texans ask for leadership to enact NEW vision for road policy
- Grassroots applaud Perry's call to end diversions, reject Rainy Day raid
- Texans call for boycott of Cintra's SH 130 tollway
- Judge rules foreign company can take Texas land using eminent domain
- Victory for open government, but not complete transparency
- Farmer challenges use of eminent domain for Keystone pipeline
- Anti-toll groups celebrate Campbell, Cruz victories
