Posted on 02/24/2007 5:02:53 PM PST by Tolerance Sucks Rocks
A State Auditor’s Office report on the Texas Department of Transportation and the Trans-Texas Corridor set for public release today estimates a $105.6 billion price tag for the TTC-35 portion alone of the massive transportation project.
The TTC-35 represents 14 percent, or 560 miles, of the Trans-Texas Corridor’s proposed 4,000 miles of roadway criss-crossing the state. A 2002 estimate by TxDOT placed the cost for the entire Trans-Texas Corridor at between $145 and $184 billion.
Taken as a whole, the Trans-Texas Corridor on its completion could become “the longest network of toll roads in the world,” according to the audit. The TTC-35 portion of the project will bisect the center of the state from Mexico to Oklahoma, roughly paralleling Interstate 35.
“Although there are weaknesses in the Department of Transportation’s oversight, the department has been successful in administering certain key aspects of its Comprehensive Development Agreement contract with Cintra Zachry LP and negotiating the first road project for TTC-35,” according to a copy of the audit obtained by the Daily Light.
“Weaknesses in the department’s accounting for project costs and monitoring of the developer create risks that the public will not know how much the state pays for TTC-35 or whether those costs were appropriate. Not adequately monitoring developers also exposes the state to future financial liability.”
The audit notes that the Master Development Plan anticipates that the TTC-35 could be developed through a series of 50-year contracts, with the “near-term road projects” or 330-mile stretch of the TTC-35 running from the Metroplex to San Antonio set for completion from 2010 to 2017.
The near-term segments are planned to open with four vehicle lanes, with the audit noting that the Master Development Plan specifies that the TTC-35’s various components (vehicle lanes, truck lanes, high-speed rail lines, freight rail lines and utility right-of-way) will not be developed simultaneously.
“After analysis of traffic patterns on those (four initial vehicle) lanes, the need for additional lanes will then be evaluated,” reads the audit, which notes if high-speed rail lines are constructed, those might not be open until 2024. The utility right-of-way is not expected to be developed until 2030.
“In addition, these rail lines are not currently planned to parallel all portions of TTC-35,” the audit reads. “Instead they could be constructed from Fort Worth to Dallas to San Antonio.”
The audit’s background information notes that “financial plans associated with TTC-35 are expected to change and updates are required every six months. Changes in a variety of factors - such as interest rates, construction costs and revenue forecasts - could result in significant changes to the financial plans for TTC-35.
The Master Development Plan developed by Cintra Zachry LP notes that “the design, right of way, construction, operations, maintenance and financing costs will be provided through a developer, but in some cases these items could be partially paid by the state.
“There will be a separate contract for each segment, or group of segments of TTC-35; each contract will be between the segment’s developer and (TxDOT),” the audit notes. “As of January 2007, none of these segment development contracts had been executed, although the department is currently negotiating such a contract for State Highway 130 (segments 5 and 6) with Cintra Zachry LP.”
The audit continues, “There is a lack of reliable information regarding projected toll road construction costs, operating expenses, revenue and developer income. Auditors made an effort to sum the elements of costs, operating expenses, revenue and developer income contained within the TTC-35 Master Development Plan.
“Upon its review of the sums, (TxDOT) states that this financial information was not correct because it is not possible to accurately estimate profits due to many unforeseen variables. This report contains financial information auditors summed from the Master Development Plan for every 10 years of the 50-year life of the projects,” according to the audit, which notes the plan met the requirements of the Comprehensive Development Agreement.
A key point noted in the audit is that while TxDOT could receive $3 billion in concession payments from the developers of TTC-35, “it could be required to forgo that revenue and, instead, the state could pay from available resources for any segment to be built.”
Concession payments could be reduced if factors such as the cost of financing each road segment, inflation and interest rates increase the developers’ costs, reads the audit, adding that the development of the TTC-35 could involve the use of public funds.
Although the plan says the project will require minimal public funds, with the near-term facilities requiring no public funds, the audit writes that public funds have the potential to be used relating to costs associated with the plan, costs for two of the near-term projects, freight rail lines and high-speed rail lines.
“Additionally, the department does not define federal credit assistance as public funds,” the audit notes. “The Master Development Plan anticipates that developers may apply for $3.9 billion in federal Transportation Infrastructure Finance and Innovation Act loans to fund the construction of the seven near-term facilities of TTC-35.”
Yet another key point in the audit is that TxDOT did not initially make all documentation related to the Trans-Texas Corridor public.
Although noting the department’s reasoning for not disclosing the conceptual financial plan and conceptual development plan for 18 months, the audit writes, “Given the scope and public nature of the Trans-Texas Corridor project, it is important that the department makes all documents, plans and contracts related to the project public in a timely manner.”
The audit makes several recommendations, including that the Legislature increase the availability and reliability of financial information by requiring TxDOT to increase transparency by increasing the public’s access to information about the Trans-Texas Corridor.
The audit also recommends that TxDOT transfer the toll revenue projection function and associated resources from itself to the Office of the Comptroller of Public Accounts.
“Having an independent third party project toll revenue could play a valuable role in increasing the reliability of financial estimates,” reads the report, which also recommends that the State Auditor’s Office audit each annual financial statement for a toll road segment or combination of segments.
The audit also recommends that the Texas Transportation Code be clarified to require that surplus toll revenue and other revenue paid to the department be deposited into the State Highway Fund and be subject to legislative appropriations.
TxDOT should prepare a financial forecast that includes toll revenue, construction costs, operating expenses and developer income before a contract is signed for each toll segment, according to the audit, saying copies should be provided to the governor, Legislature and the Office of the Comptroller of Public Accounts.
“(TxDOT should) account for project costs in a manner that allows the public to know how much the state pays for TTC-35 and whether those costs were appropriate,” the audit reads. “In addition, it should post these costs on its Web site in a timely manner.”
The audit also recommends that any Comprehensive Development Agreements contracts and draft agreements “to design, build, operate, maintain, lease or fianc/ sections of tolls road that will last more than four years or involved the state or another entity spending more than $250 million” should go to the Office of the Attorney General for review and approval.
TxDOT’s response to the audit is included within the report, which notes the department is generally in agreement with most of the recommendations.
Other findings and recommendations:
“Not retaining the individual scoring sheets of each committee member can lead to an appearance of impropriety in the selection process,” the audit reads.
A draft copy of the report was shared with TxDOT officials in late January, with the 62-page audit released Thursday to member of the Legislative Audit Committee, which includes Lt. Gov. David Dewhurst; House Speaker Tom Craddick; state Sen. Steve Ogden, chairman of the Senate Finance Committee; state Sen. Thomas Williams; state Rep. Warren Chisum, chairman of the House Appropriations Committee; and state Rep. Jim Keffer, chairman of the House Ways and Means Committee. Copies also were provided to Gov. Rick Perry and members of the Texas Transportation Committee.
“We found the discussion helpful and productive,” TxDOT executive director Michael W. Behrens, P.E., wrote in a letter dated Feb. 21 extending his appreciation to the State Auditor’s Office. “We share your goal of having a good audit report that is factual and understandable.”
In his letter Behrens references “the new and innovative tools that our elected officials have provides us to address the state’s transportation needs.”
“Because these tools are new, as well as complex, your report has provided significant content to help the reader understand these new tools,” Behrens wrote. “We value the audit process and appreciate the professionalism of your staff. Hopefully members of this audit team will be available for additional audits of these new tools and transportation projects.”
Click here for the full report
February 24, 2007
The Huntsville Item
AUSTIN — Two bills have been filed by state Rep. Lois W. Kolkhorst of Brenham which would terminate the state’s controversial Trans-Texas Corridor highway proposal.
If passed, House Bill 1881 will repeal the Trans-Texas Corridor from the transportation code, effectively killing the proposal by removing the enabling legislation which would have served as the foundation for any future corridor project.
“I’ve been fighting against the Trans-Texas Corridor for several years, and it’s not because I want to stop progress,” Kolkhorst said. “We need to look at new ways to fund roads, but this isn’t it.
“Some toll systems work, such as Harris County, but many do not. Plenty of people share my concerns about these private toll roads and how they’ll threaten communities, violate our property rights, and create an unregulated transportation monopoly. My bill allows Texas to scrap the Trans-Texas Corridor plan and start over.”
Kolkhorst said she has received literally hundreds of calls, comments, letters and e-mails against the Trans-Texas Corridor over the past few years.
She also has worked with the anti-corridor group Corridorwatch.org and received an A-rating from group.
Additionally, Kolkhorst filed House Bill 1880, which prohibits any public pension fund from investing in a private toll road project, such as the Trans-Texas Corridor.
The bill cuts off billions of dollars of funding that private toll road vendors, both foreign and domestic, would attempt to use in order to raise equity.
“No public money from a public pension fund should be used for a private toll road," Kolkhorst said. “It’s risky to invest our retiree pension funds into an unproven investment, especially with a foreign company. Texas doesn’t need a middle-man to build a road.
“Private companies should not leverage taxpayer dollars and then turn around and ask taxpayers and the public to give up oversight of a toll road project.”
Auditors expose holes in TTC-35
Expensive Trans-Texas Corridor PING!
Thanks for the ping!
You're welcome. :-)
BTTT
Yep.
Perry has stepped on too many people's feet and now it's coming back to bite him.
"$105.6 billion price tag for the TTC-35"
Hmmm......that will cause the charge per mile to increase about 10 fold. Who will pay to drive on any road at $5 per mile?
Very Poor Title, People aren't going to see this ----
I am dumbfounded at the number of people that don't see where this is headed. Now the Department of Transportation has authorized 100 Mexican Trucking Companies to travel anywhere in the US!!!!!!
Will Kolkhorst be able to stop this.....I hope to God he is.
I was hoping the astronomical price tag would be an eye-catcher.
I am dumbfounded at the number of people that don't see where this is headed. Now the Department of Transportation has authorized 100 Mexican Trucking Companies to travel anywhere in the US!!!!!!
I saw that in the Wall Street Journal. We're actually going to be sharing the road with poorly-paid (by our standard) Mexican truckers.
Will Kolkhorst be able to stop this.....I hope to God he is.
Kolkhorst's first name is Lois (a she).
bump.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.