Transportation News

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AUSTIN—Concession deals for privately operated toll roads present a number of potential problems, according to a new report by TexPIRG. The report examines deals to grant long-term control of roads to private operators who seek to profit off toll revenue. TexPIRG analyzed tollway deals in other states and independent investment bank research on concession bids for a Texas’ State Highway 121.

“The public would give away future toll revenue and flexibility in managing future transportation policy,” noted TexPIRG’s Colin McKellips. “We need to approach proposed deals with great caution. The bad effects may not be evident for a few years, but the public will suffer for decades,” he added.

The report concludes that no toll-road deal should be signed that does not satisfy six basic conditions:

• Public control retained over decisions about planning and management
• Fair value guaranteed so future toll revenues won’t be sold off at a discount
• No deal longer than 30 years because of uncertainty over future conditions and because the risks of a bad deal grow exponentially over time
• State-of-the-art maintenance and safety standards instead of statewide minimums
• Complete transparency and accountability to ensure proper process
• No budget gimmicks because a deal must make long-term sense

“We call on the Governor to steer clear of any toll road deal that doesn’t satisfy these basic safeguards for the public,” said Cathie Adams, President of the Texas Eagle Forum. “He should sign HB 1892 and take the next two years to re-think Texas’ transportation future.”

The report notes that these same principles must be met if a public toll road authority constructs a roadway using funds borrowed from private investors in return for a share of future toll revenues. In that case, the danger of losing public control is far less than with a private deal. The North Texas Tollway Authority was initially excluded from placing its own bid for State Highway 121. After public hearings, the public authority was allowed to enter its own bid which, according to independent research, would save the public over $3 billion dollars.