NTTA agree to stick to private sector toll caps for SH121
Posted Thu, 2007-07-26 17:35
A draft "project agreement term sheet" approved today by the North Texas Tollway Authority board commits it to adhere to the toll rate caps of the private sector concession with TxDOT. However it provides few enforcement teeth - no binding arbitration or termination for default.
First up it requires Texas DOT to renounce their private sector procurement that led to the selection of Cintra/JP Morgan earlier this year by acknowledging that there are "no restrictions on TxDOT or any other party to construct and operate" the SH121. It then requires TxDOT to "fully authorize" NTTA to take over the toll project which would be added as a "turnpike project" to the "DNT system" as the local toll authority terms its network for system financing purposes.
The agreement provides for NTTA to toll SH121 for 50 years after which it is handed back to TxDOT, as in the private sector
concession. It also provides for concession payments by NTTA to TxDOT and it uses the term "concession payment" which is to be as follows:
- $75m deposit within 5 business days of execution, which if forfeited goes to the region
- $2.5 billion upfront payment within 45 days of the project agreement being signed
- $833m extra upfront payment in place of annual guaranteed payments
New one - NTTA must keep to private sector toll caps
New is a NTTA commitment to adhere to comply with the "maximum base toll rate schedule" of the private concession contract. Previously NTTA has insisted on the unfettered right to set toll rates.
NTTA pledges to cooperate with peak period pricing on SH161.
A non-binding dispute resolution process!!!
However uniike a private sector concession TxDOT would have no right to find NTTA in default and terminate the concession, meaning this is a rather toothless contract as compared to a private sector concession.
There is a "non-binding dispute resolution process" and no provision for what happens in case of unresolved disputes.
Payment default merely provides TxDOT the right to claim interest (LIBOR plus 2 percentage points), not to get its road back.
NTTA's privileged position as compared to a private concessionaire is summed up here: "Termination of this agreement only with mutual consent or completion of responsibilities."
see the draft agreement here
TOLLROADSnews 2007-07-26
A draft "project agreement term sheet" approved today by the North Texas Tollway Authority board commits it to adhere to the toll rate caps of the private sector concession with TxDOT. However it provides few enforcement teeth - no binding arbitration or termination for default.First up it requires Texas DOT to renounce their private sector procurement that led to the selection of Cintra/JP Morgan earlier this year by acknowledging that there are "no restrictions on TxDOT or any other party to construct and operate" the SH121. It then requires TxDOT to "fully authorize" NTTA to take over the toll project which would be added as a "turnpike project" to the "DNT system" as the local toll authority terms its network for system financing purposes.
The agreement provides for NTTA to toll SH121 for 50 years after which it is handed back to TxDOT, as in the private sector
concession. It also provides for concession payments by NTTA to TxDOT and it uses the term "concession payment" which is to be as follows:- $75m deposit within 5 business days of execution, which if forfeited goes to the region
- $2.5 billion upfront payment within 45 days of the project agreement being signed
- $833m extra upfront payment in place of annual guaranteed payments
New one - NTTA must keep to private sector toll caps
New is a NTTA commitment to adhere to comply with the "maximum base toll rate schedule" of the private concession contract. Previously NTTA has insisted on the unfettered right to set toll rates.
NTTA pledges to cooperate with peak period pricing on SH161.
A non-binding dispute resolution process!!!
However uniike a private sector concession TxDOT would have no right to find NTTA in default and terminate the concession, meaning this is a rather toothless contract as compared to a private sector concession.
There is a "non-binding dispute resolution process" and no provision for what happens in case of unresolved disputes.
Payment default merely provides TxDOT the right to claim interest (LIBOR plus 2 percentage points), not to get its road back.
NTTA's privileged position as compared to a private concessionaire is summed up here: "Termination of this agreement only with mutual consent or completion of responsibilities."
see the draft agreement here
TOLLROADSnews 2007-07-26
| Attachment | Size |
|---|---|
| NTTA&TxDOT121termsheet.pdf | 2.84 MB |