Contract for southern segment increases state revenue if speed limit goes to 80 mph or beyond.
By Ben Wear
AMERICAN-STATESMAN STAFF
Tuesday, July 11, 2006
The higher the speed limit, the more money the state would collect on Texas 130's southern 40 miles under the contract recently signed with road developer Cintra-Zachry.
A highway safety advocate says that means "safety's for sale in Texas." No, the state's turnpike director says, the provisions in that contract are only a recognition that the Legislature has already allowed an 85-mph speed limit for roads included in the Trans-Texas Corridor plan, a designation that Texas 130 probably will get.
With a higher allowable speed, logic dictates that more drivers would choose the toll road, which will run east of Austin, as an alternative to Interstate 35. And more vehicles equals more toll revenue, boosting Cintra-Zachry's income.
Under that scenario, the state would be irresponsible if it did not try to recoup more revenue for taxpayers, said Phil Russell, director of the Texas Department of Transportation's turnpike division. As for the safety questions raised by that higher speed, Russell said the agency is working on design standards for the Trans-Texas Corridor, a proposed 4,000-mile network of toll roads, that would make them as safe at 85 mph as interstates are at 70 mph.
"Whatever the speed limit is, we're going to make sure our design standards can accommodate it," Russell said Monday.
Judie Stone, president of the Washington-based Advocates for Highway and Auto Safety, doesn't buy it.
"I just think it's a violation of public health responsibilities on the part of the state," Stone said. "It's the first time I've ever heard of anything like that. Following on the heels of raising the speed limit to 80 on some segments of the interstates, it's very disturbing. It sounds like safety's for sale in Texas."
In late May, the state Transportation Department changed some speed limits on West Texas interstates to 80 mph.
Although Cintra-Zachry will operate the southern 40 miles of Texas 130, the speed limits will be controlled by the state. The Texas Transportation Commission, appointed by the governor, sets those limits, but only within upper limits set by the Legislature.
None of this applies to the northerly 49 miles of Texas 130 being built from Georgetown to south of Austin-Bergstrom International Airport, some of which is due to open in December. The state, not Cintra-Zachry, is building and will operate that toll road. And it was designed several years ago, long before the Trans-Texas Corridor and its 85-mph limit was contemplated. Russell said that part will open with a 70-mph speed limit.
Not so with the southern 40 miles from Mustang Ridge to Interstate 10 at Seguin. The state last month signed a thousand-plus-page contract with Cintra-Zachry, a Spanish-American partnership, for the company to build the four-lane road at an estimated cost of $1.3 billion and operate it for 50 years.
The contract contemplates that Cintra-Zachry would pay the state an upfront concession fee of $25 million and 4.65 percent of toll revenue until total revenue reaches certain thresholds in any given year. Then the portion for the state would grow to 9.3 percent until a second revenue threshold is reached, jumping to 50 percent after that.
But that is only if the speed limit is 70 mph.
The contract says that if the speed limit is 80 mph, the upfront payment would be $92 million. At 85 mph, the payment would be $125 million.
Or the state could choose, rather than taking more upfront, to collect higher percentages of the toll revenue. The higher speed limits would have to be imposed within the road's first six months of operation for the state to get the extra money. The road is expected to open by 2012.
In 2003, when the Legislature passed a 300-page bill creating the legal framework for the Trans-Texas Corridor (and other toll road activities), it said that proposed system could have speeds up to 85 mph.
The idea is that the cross-state roads would be less traveled than the parallel, toll-free interstates and thus could accommodate higher speeds. And faster travel would be the carrot drawing paying customers.
At this point, pending an environmental review that could take two to three more years, Texas 130 is not a part of the Trans-Texas Corridor. But it falls within a 10-mile-wide study area in the draft environmental document, and most people familiar with the situation assume that it eventually will become a corridor road.
If that occurs, it would be up to the Transportation Commission to decide if 85 mph will be the limit. Despite the lure of the extra money, Stone said, she hopes that commissioners will look at the demonstrated role that speed plays in highway deaths and turn down the windfall.
"If people in the decision-making positions believe there aren't going to be consequences for people going that fast on any road," Stone said, "they're wrong."
For more TTC-related stories over the past few days:
85 mph! Yeeeeeee-ha!
Looks like Texas is thinking ahead...
How novel...
Of particular note:
Some undecided factors regarding the TTC-35 project are addressed in the Seguin/Austin private partnership agreement, which provide that Texas will receive a graduating portion of the tolls collected by Cintra-Zachry during the 50 years before the new highway diverts exclusively to Texas. The terms in that agreement place the key risks of construction costs, overruns, delays, traffic, and revenue on Cintra-Zachry. The agreement also requires that the Texas Transportation Commission approve the methodology for setting tolls, as required by state law...