Houston commission rejects toll-road privatization

| Monday, June 26, 2006

The local Texas toll-road authority in the Houston area will hold onto its assets, a commission has decided, despite a growing trend around the U.S. to lease infrastructure to the highest bidder.

The Harris County Board of Commissioners voted unanimously June 20 for the local toll authority to continue operating the 83-mile toll-road system.

June 20 was the same day the Indiana Supreme Court ruled in favor of Indiana Gov. Mitch Daniels and the Indiana Finance Authority in an appeal by plaintiffs in a lawsuit over Daniels’ “Major Moves” transportation plan. The plan includes the 75-year, $3.85 billion lease of the Indiana Toll Road to ITR Concession Co., a Spanish-Australian consortium of Cintra-Macquarie.

The vote in Texas was based on a recommendation gathered from a $1 million financial feasibility study, which concluded the local toll authority is better off regulating its own toll increases, revenue and expenses rather than handing that power over to a private investor.

In the financial study, JP Morgan-Popular Securities concluded the Harris County Toll Road Authority could have attracted up to $10 billion with a 50-year lease and up to $13 billion over 75 years.

Another financial analysis company, Citigroup-Siebert Brandford Shank & Co., found that county control of the road would be economically beneficial in the long run, and that the steady revenue stream from tolls provided leverage for expansion.

Commissioner Steve Radack was quoted in the Houston Chronicle as saying the commission was strongly opposed to a private lease.

“Now we can erect a sign on the toll roads: ‘Not for sale, not for lease,’” Radack said.

david_tanner@landlinemag.com

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