$3.2b financial close on public-public toll concession for TX121

TxDOT's 50 year toll concession and lease of SH121 to the North Texas Tollway Authority (NTTA) reached financial close late Thursday when the NTTA wired $3,197m into a bank account of the Texas Department of Transportation. The event was made into a ceremony today with NTTA chairman Paul N Wageman presenting what NTTA's statement called "the oversized" and a "Texan sized" check to Ric Williamson, chairman of the Texas Transportation Commission, TxDOT's governing board and to Oscar Trevino chair of the North Texas Regional Transportation Council in a midday ceremony at Carrollton City Hall today.

Also participating were officials from the three counties (Collin, Dallas and Denton) and nine cities (Allen, Carrollton, Coppell, Fairview, Frisco, Lewisville, McKinney, Plano, and The Colony ) in the SH121 corridor.

Paul Wageman an ambitious political figure was celebrating the climax of his successful campaign to seize a state toll concession for NTTA, the regional government tollroad, from a private sector toll operator (Cintra) at the eleventh hour. In the process he forced out then NTTA chief executive Allan Rutter, roiled state relations with the US Government, and put the toller on a course of higher risk finances.

NTTA had declined to proceed with SH121 as a regular public tollroad before TxDOT moved to do a private concession procurement and indeed signed an agreement with TxDOT not to compete with private bidders just last year. The turnaround over SH121 was a microcosm of the larger campaign throughout Texas to retain tollroads as government operated businesses rather than moving towards the business concession model.

Wageman said today: "This is truly a momentous occasion, one that we have been anticipating since final execution of the project agreement on October 18. Late yesterday, $3.197 billion was transferred to the Texas Department of Transportation as payment for the NTTA’s right to develop, finance, construct and operate SH121 in Collin, Dallas and Denton counties."

"SH121 now becomes not just a part of our road system, but a part of our financial system, which strengthens the NTTA’s ability to deliver other critical mobility projects throughout north Texas. SH121 will bring a staggering $4.6 billion back to our region – not just the $3.197 billion delivered yesterday, but a projected $1.3 billion to be generated over the next half century that will be returned to the NTTA financial system. This is a great benefit for our region!” said the NTTA chairman.

BACKGROUND:

The SH121 toll project will be a 42km (25.9 mile) all-electronic tollroad from McKinney where SH121 intersects with US75 west to near the Tarrant County line. on building SH121. It is a 12 lane tollroad including frontage road lanes and will deploy all electronic tolling - no cash toll collection.

The NTTA now assumnes responsibility for the road and will operate it for 50 years, after which it will revert to the state.

Under the concession agreement with TxDOT, the NTTA was required to complete its SH121 financing by Dec 1. The funds, generated by the NTTA’s sale of Bond Anticipation Notes on Nov 29, were transferred to TxDOT late yesterday. The funding includes an upfront payment of approximately $2.46 billion. In place of 49 annual payments, the RTC will receive a $737m once off.

Under state legislation 792 the TxDOT proceeds of toll concessions must be spent in the region, and in this case they are being allocated by the local council of governments Regional Transportation Council.

NTTA is obligated under the agreement with TxDOT to complete construction work by 2012.

Penn Pike I-80 comparison

The other big toll concession currently in plaqy is I-80 and the Pennsylvania Turnpike Commission which developed the "public public partnertship" plan to counter the Governor's move to privatize the business of the Turnpike mainline. It too was signed as a 50 year toll concession contract with the state DOT in return for large upfront payments.

However the PTC/PennDOT toll concession on I-80 looks unlikely to be consummated. Federal grant money was used in its construction and its interstate designation makes new tolls difficult to grant under federal law. By contrast SH121 is obviously a state highway and being built without any federal funds. Also NTTA has rather a good public reputation for serving the local people, while the PTC has low public standing.

TOLLROADSnews 2007-11-30