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State Highway 130: A Model For Public–Private Partnerships
05/16/2007
The agreement negotiated by the Texas Department of Transportation stipulates that Cintra–Zachry provide the necessary financing to complete the toll road from Austin to Interstate 10 in Seguin. Cintra–Zachry will also pay for the necessary right of way for the project with the title of any property purchased to be held by the state. This removes the financial burden, estimated at $120 million, from Caldwell, Guadalupe and Travis counties.
The terms of the agreement give the state a $25 million up front concession payment to be used on projects in the Austin–San Antonio region, and a share of the toll revenue over the next 50 years, beginning with the first dollar earned on the toll road. The state's share of the toll revenue over the next 50 years is estimated to be $1.6 billion. The transportation commission will approve the methodology for setting the tolls, as defined in state law.
Additionally, the agreement transfers key risks to Cintra–Zachry, such as construction cost, overruns, construction delays, traffic and revenue risks, and financial risks.
The mandatory environmental work for the 40-mile stretch of SH 130 is expected to be completed this year. Upon receiving environmental clearance, Cintra–Zachry will begin right of way acquisition.
The SH 130 agreement is an example of how innovative methods used to finance transportation projects can accelerate the construction of badly needed roads in the state of Texas. By using private investment the state highway fund remains intact and the transportation assets of Texas are increased.
"This public–private partnership is a sign of good things to come and a preview of future transportation financing in Texas," said Michael Behrens, executive director of the Texas Department of Transportation. "It's a huge private investment that will go a long way toward helping us accomplish our transportation goals: reduce congestion, enhance safety, expand economic opportunity, improve air quality and increase the value of transportation assets."
