Hwy 121, Hwy 183, I-820, I-635 and now I-35W are chokepoints that represent some of the most congested roads in the Metroplex, and four of the five were handed to Cintra without competitive bidding.
By Terri Hall l October 24, 2012
The Texas Department of Transportation (TXDOT) just announced that it inked a deal with Spanish toll operator, Cintra, for yet another toll project in North Texas – this time on Interstate 35W in Fort Worth. That brings the total toll projects in the hands of a single company in just Dallas-Ft. Worth alone to five: Hwy 121, Hwy 183, I-820, I-635 and now I-35W. These chokepoints represent some of the most congested roads in the Metroplex, and four of the five were handed to Cintra without competitive bidding.
The LBJ project on I-635 is a standalone toll project, but the North Tarrant Express development agreement known as a public-private partnership (P3) involves the other four highways, which were all awarded to Cintra in one master comprehensive development agreement (CDA) with each highway subsequently negotiated using ‘facility agreements.’
P3s are all the rage at TxDOT and they’re fundamentally transforming the way highways are financed in Texas and across the country. They do not use competitive bidding, but instead a process dubbed ‘best value’ bidding, which is fraught with potential abuses and allows contracts to be handed out to their buddies based on intangibles, not necessarily the lowest price or the best deal for the taxpayer. There’s no apples-to-apples comparison of one bid to another since the final design is not completed until AFTER the company’s been awarded the contract. P3s always cost the taxpayer more than a traditional publicly-owned toll project – 50% more according to Dennis Enright, a P3 expert with Northwest Financial.
How can paying 75 cents PER MILE to access these toll lanes, which are partially subsidized with taxpayer dollars, be a good deal for anyone? Paying a premium to drive does not foster economic growth, or prosperity, it hampers freedom of mobility and puts the power to tax in the hands of a private corporation, whom the public cannot hold accountable. There’s no way to sugar coat it – it’s fascism.
“Fascism is Socialism with a capitalist veneer,” writes libertarian academic Sheldon Richman. “Where socialism sought totalitarian control of a society’s economic processes through direct state operation of the means of production, fascism sought that control indirectly, through domination of nominally private owners.” Cintra serves as that nominally private owner where the State of Texas under its governor, Rick Perry, commands the legislature to finance a globalist view of transportation infrastructure construction toward the goal of achieving dominance through economic integration with Mexico and Canada.
Prohibiting ‘free’ competition
P3s also include manipulative non-compete clauses that prohibit or penalize the expansion of free roads surrounding the private toll project, guaranteeing congestion on the free routes. Cintra landed the P3 for SH 130 from south Austin to just east of San Antonio and it has a financial incentive that encourages the artificial manipulation of speed limits to drive more traffic to Cintra’s toll road. The Texas Transportation Commission increased the speed limits on SH 130 to 85 MPH, the highest in the country, and decreased the speed limits on the adjacent freeway, Hwy 183 in Lockhart, from 65 MPH down to 55 MPH. TxDOT received an additional $100 million from Cintra for doing so.
It’s plain to see the graft involved with P3s. Every single P3 in Texas has been awarded to the same company – Cintra. Former Senate Transportation Committee Chair Sen. John Carona recently criticizedTexas Governor Rick Perry for politicizing TxDOT by stacking it with political appointees. Texans have cried foul at the prospect of foreign-owned toll roads which put the kibosh on Perry’s grand plans for the construction of the Trans-Texas Corridor, but Perry’s push for P3s has continued to slither its way into TxDOT.
Why wouldn’t it when his former legislative director, Dan Shelley, who lobbied for Cintra, then worked as Perry’s liaison in the Texas legislature where he secured Cintra the development rights for the Trans-Texas Corridor, then went back to work for Cintra. TxDOT’s new Executive Director, Phil Wilson, is another Perry political appointment who’s enjoyed five other state posts before heading the agency.
Wilson’s former employer, Energy Future Holdings Corp., donated over $1 million to Perry through the Republican Governor’s Association. It’s the first time a lobbyist, rather than a professional engineer, has been tapped to run the highway department. With such brazen revolving-door cronyism infecting road policy, Texas taxpayers can’t possibly get a fair shake.
Cintra’s monopoly gained with ‘Monopoly’ money
Each of Cintra’s P3s are heavily subsidized with taxpayer money, whether federal TIFIA loans and PABs (private activity bonds) or state gas tax revenues, taxpayers are footing the bill regardless of whether they can afford to actually access the lanes or not. The new federal highway bill, MAP-21, increases the TIFIA loan program by nearly a factor of ten.
There is no dedicated revenue source for these federal dollars, and they’re funded by borrowed money from the Federal Reserve. So TIFIA loans are lending private toll operators borrowed funny money that we don’t have in the first place, for projects that can’t pay for themselves or stand on their own without taxpayer bailouts. TIFIA loans are almost exclusively doled out to private P3 toll projects in what amounts to corporate socialism with a capitalist veneer.
P3s are structured the same way as the loans that begat the subprime mortgage crisis, so it won’t surprise you to learn that Fannie Mae and Freddie Mac were also public-private partnerships. Ditto for Solyndra. In every case, the taxpayer is left holding the bag.
In Texas, P3s last for up to 52 years, so Cintra has locked down a monopoly over six major highways in Texas, including portions of two interstates, for multiple generations. The Texas Constitution prohibits monopolies and perpetuities, yet Perry and the Texas Legislature continue to sell-off Texas sovereignty for a half century at a time to a sole private developer.
Perry’s mantra seems to be ‘name your price and I’ll sell you Texas.’ Nowhere can this be seen quite so clearly as with the proliferation and abuse of P3s and Texas’ road policy. Buyer beware!
Terri Hall is the founder of Texans Uniting for Reform and Freedom (TURF), which defends against eminent domain abuse and promotes non-toll transportation solutions. She’s a home school mother of eight turned citizen activist. Ms. Hall is also a contributor to