By David Tanner
When the federal government approved a $430 million loan to private foreign investors to build a toll road in Texas, it sent up red flags at OOIDA headquarters.
“We’re skeptical of road funding schemes that involve the private sector,” OOIDA Senior Government Affairs Representative Mike Joyce said. “But this takes the cake.”
The Texas Department of Transportation chose Spanish toll operator Cintra and Texas-based Zachry American Infrastructure to finance, design, build and operate two segments of state Highway 130. Cintra officials say the company will use $686 million in bank loans and additional investor capital in addition to the $430 million loan from the U.S. Department of Transportation.
When Cintra completes 40 miles of Texas Highway 130 in 2012, it will be a tolled highway, beginning at Interstate 10 just outside Seguin, TX, and running roughly parallel to Interstate 35 up to Austin’s east suburbs.
The first four segments of Highway 130, totaling about 50 miles, were built with state and federal funding and are part of the Central Texas Turnpike System.
Truck tolls on the privately controlled segments will start at 50 cents per mile while tolls for cars will start at 12.5 cents per mile.
Under the 50-year agreement, toll revenue will be used to reimburse Cintra’s construction costs, even though TxDOT is to provide and pay for “back office” functions, including toll collectors, other staff, call center, equipment, transponders and maintenance for the roadway.
“Any privatization scheme that depends upon public (taxpayer) money is not true privatization,” said OOIDA Regulatory Affairs Specialist Joe Rajkovacz. “It’s a fleecing of the taxpayer by the private sector with willing government accomplices.”
Rendell’s former employer advising state on Turnpike lease, I-80 tolls
Pennsylvania Gov. Ed Rendell’s former employer, the Philadelphia law firm of Ballard Spahr Andrews & Ingersoll, is being paid to advise the state on transportation matters, including Rendell’s proposal to lease the Pennsylvania Turnpike to private investors, a spokesman for the governor confirmed.
Rendell spokesman Barry Ciccocioppo told Land Line that Ballard Spahr, which was hired in 2007 by the governor’s office of general counsel, had billed the state for $2.4 million and had been paid $1.8 million as of April 4 for work on a turnpike lease and a separate proposal to convert Interstate 80 into a toll road.
In addition to the $2.4 million, two law firms subcontracted to Ballard Spahr have billed the state for a total of nearly $855,000. Two additional law firms have billed for a total of about $841,000. All legal fees were for special counsel services for the transportation proposals.
The hiring of special counsel does not require a bidding process, Ciccocioppo said.
These firms were selected for their expertise in complex, bond-based transactions,” Ciccocioppo said.
Rendell was a lawyer for Ballard Spahr from 2000 to 2002, between his term as Philadelphia mayor and his election to governor. Several of Rendell’s former advisors are partners in the firm, including his former Chief of Staff John Estey and former Deputy Chief of Staff Adrian R. King Jr.
Another attorney at the firm is Kenneth Jarin, who also serves as chairman of the State System of Higher Education Board of Governors, having been nominated for the position by Rendell.
Jarin, who gave Land Line a stern “no comment” about the work Ballard Spahr is doing for the state, is married to state Treasurer Robin Weissmann. Rendell appointed Weissmann to fill the interim position when Bob Casey was elected to the U.S. Senate in 2006.
Indiana Toll Road rates increase
Truck tolls recently increased 21 percent on the Indiana Toll Road. It used to cost $22.50 for a Class 8 to run the 157-mile length. Tolls for big trucks increased to $27.25 on April 1.
State legislators built a schedule and a range of toll increases into the legislation that led to the 2006 lease of the toll road to private investors. After signing that legislation, Gov. Mitch Daniels leased the road to ITR Concession Co., which is owned by subsidiaries of two foreign companies, Cintra of Spain and Macquarie Bank of Australia. The lease is for 75 years.
State legislation that approved the lease included truck toll increases from $14.55 to $18 in 2006; to $22.50 in 2007; $27.25 in 2008; and $32 in 2009.
The minimum toll increase in any future year will be 2 percent of the toll rate at the time of annual review, but the increase would be greater if the gross domestic product or the Consumer Price Index were to grow by more than 2 percent. For example, if the GDP grew by 3 percent and the CPI grew 4 percent, the toll increase for that year would be 4 percent.
Truckers pay a single rate whether they use cash or an iZoom account.
Rates for two-axle vehicles increased from $4.65 to $8 for those paying cash but are frozen until 2016 for iZoom customers, Pierce said.
Colorado considers adding tolls to stretch of I-70 west of Denver
Legislation aimed at converting part of Interstate 70 into a toll road west of Denver is facing stiff opposition from truckers and other highway users.
Sen. Andy McElhany, R-Colorado Springs, introduced the bill, SB213, to target congestion between the Eisenhower Tunnel and Floyd Hill.
OOIDA Regulatory Affairs Specialist Joe Rajkovacz attended a hearing on the bill before the Senate Transportation Committee in late March. He testified against the proposal.
“Obviously, the Association and its members don’t believe that tolling highways is a solution to significant transport issues,” Rajkovacz said.
The Transportation Committee approved SB213 and sent it to the Senate Appropriations Committee, where it remained at press time in April. LL