Tuesday, July 8, 2008

Talk is Cheap, the Devil’s in the Details, and the Details are in the Contracts.....

........and we don’t see them until after they are signed.

For those of you who live in the proposed TTC-69 footprint and may have breathed a sigh of relief last week when you heard TxDOT was pulling back to the proposed I-69 footprint, recommending that only existing right of way be used, I draw your attention to the article below. If you aren’t interested in reading a very long article about Virginia toll roads (although you should because it is exactly what will happen in Texas if the private partners have their way) then I draw your attention to one particular paragraph:

"Finally, the contract insists that if any homes happen to lie in the way of the construction of the new lanes, Transurban will pay no more than the current market value to purchase the land in question. If the owner refuses to move, VDOT will condemn the property and confiscate it for the use of the private, for-profit company through eminent domain. The Beltway project, however, was designed to be built within existing VDOT right-of-way to ensure the exercise of this power would not be needed." (emphasis added)

Why is that language necessary? Why does VDOT's concessionaire need the ability to take land through eminent domain? Because when their plans change, that's exactly what they will do and the assurances of VDOT that the project was designed to fit in the existing right of way will go right out the window.

The very assurances that we are hearing from our own TxDOT: "existing right of way". But the real decisions lie in the terms of the contract. And right now, who looks over the TxDOT contracts before they are executed? Anyone outside of the agency and their commission? Will the assurances of our supposedly cash-starved transportation department be abandoned when the contract negotiations heat up? Will the "design" no longer fit inside the existing right of way when the private partner begins looking for enhancements to its revenue stream? (You remember revenue enhancements, the ancillary facilities that HB3588 allows, for which additional land may be taken.)

As we have for several years, CorridorWatch will continue to advocate that the Legislature put some protections in place so that no single agency executes this type of agreement without peer agency review and legislative oversight.

The whole story (illegal political donations, and new semantics games) is below- Read it and weep, kids, that's the future in Texas, unless the 2009 Lege stands up.


Article from: www.thenewspaper.com/news/24/2458.asp

New Virginia Toll Lanes Designed to Create Congestion

Illegal political donations helped give Australian company full control over Virginia transportation until the year 2087.

Illegal political contributions helped an Australian firm land a lucrative toll road deal that grants the company unprecedented power over Northern Virginia's transportation future. Last week, Transurban wrote and asked state lawmakers to return checks that the Melbourne-based toll road operator had written in violation of federal campaign laws (details). But the deal these contributions helped bring about has already been finalized.

In June, the US Department of Transportation created a first-of-its-kind $1.6 billion financing package that consisted of tax-free bonds, loans and state taxpayer grants to support the project that will add a pair of High Occupancy Toll (HOT) lanes to the Interstate 495 Capital Beltway just outside of Washington, DC. To this amount, Transurban only added $349 million of its own capital -- less than the cost of interest -- toward the construction of the toll lanes (details).

In return for that small investment, Transurban received from Virginia officials the right to demand payment from state taxpayers any time that improvements are made to a number of free roads near the Beltway. In effect, the contract between the Virginia Department of Transportation (VDOT) and Transurban is designed to ensure the area remains sufficiently congested so that motorists will have an incentive to pay to use the toll lanes.

For example, VDOT can make no changes, expansion or improvements to the free lanes on the Beltway until the year 2087 unless the agency first consults Transurban. VDOT agreed that if any such changes were made to the general purpose lanes without Transurban's explicit approval, they would at least be made in such a way as to guarantee the company maintained a high level of profit.

"If the department [VDOT] determines that additional traffic lanes on the Capital Beltway Corridor are in the state's best interests, the department shall consult with the concessionaire [Transurban] as to an appropriate strategy to implement such additional traffic lanes," the contract states. "At the department's sole discretion, [it shall] permit the construction of additional lanes as part of the project with a view to minimizing any detrimental impact on the project or its ability to generate revenues..."

In the past, most toll road deals included "non-compete" clauses that strictly prohibited transportation departments from making improvements to nearby, competing roads. They did so because free-flowing traffic on alternative routes would hit the toll road's bottom line. Simply put: why take a toll road, when there's a free alternative?

Explicit non-compete provisions have become politically controversial, and as a result companies have recently embraced a more subtle approach that accomplishes the same goal. For example, the contract for the State Highway 130 toll road in Austin, Texas included a provision giving the Texas Department of Transportation a financial incentive to lower the speed limit on the nearby Interstate 35 freeway. As first reported by TheNewspaper last year that, this provision was designed to create congestion and inconvenience for the motorists who choose the free alternative route (details).

For the Beltway project, improvements such as adding additional free lanes to the highway are absolutely permitted -- for a price. The contract considers any improvement to the Beltway to be a "Department Project Enhancement" which means that Virginia taxpayers must pay Transurban for the right to improve the free portion of the highway. Given VDOT's stated lack of funding, adding an extra monetary premium to the cost of any improvements effectively gives the foreign company the ability to prevent such projects from happening.

The effect is not limited to the Beltway. The contract specifies that payments called "compensation events" must be made in the event that the state decides to improve the connections between the Beltway's general purpose lanes and the Dulles Toll Road or any "improvements to I-66 outside the Capital Beltway Corridor" made over the course of the next eighty years.

An "independent engineer" determines how much compensation Transurban will receive by calculating an expected traffic impact. This means that the more the public is likely to use a free alternative, the more Transurban is paid. In Sydney, Australia, for example, the Lane Cove Tunnel toll project contained a provision requiring the state government to narrow the lanes of a nearby free road to generate congestion that would drive motorists into the tunnel. After the state decided to postpone the narrowing until after an election, the toll road concession was paid A$25 million (US $24 million) for that compensation event.

Transurban's control goes beyond lane improvements. Although the stated purpose of the "high occupancy" part of the toll lane project is to encourage motorists to carpool, the contract contains a provision directly designed to discourage any increase in the number of motorists sharing rides."

The department agrees to pay the concessionaire, subject to Section 20.18, amounts equal to 70% of the average toll applicable to vehicles paying tolls for the number of High Occupancy Vehicles exceeding a threshold of 24% of the total flow of all permitted vehicles that are then using such toll section going in the same direction for the first 30 consecutive minutes during any day, and any additional 15 consecutive minute periods in such day, during which average traffic for a toll section going in the same direction exceeds a rate of 3,200 vehicles per hour based on two lanes," the contract states.

This means if carpooling becomes popular on the Beltway, taxpayers could end up making multi-million dollar annual payments to Transurban.

Finally, the contract insists that if any homes happen to lie in the way of the the construction of the new lanes, Transurban will pay no more than the current market value to purchase the land in question. If the owner refuses to move, VDOT will condemn the property and confiscate it for the use of the private, for-profit company through eminent domain. The Beltway project, however, was designed to be built within existing VDOT right-of-way to ensure the exercise of this power would not be needed.

Transurban shares on the Australian Stock Exchange jumped 15 cents to A$4.60 today after the company announced quarterly earnings results. On Virginia's Pocahontas Parkway, the company reported a 7.8 percent increase in revenue over the same quarter last year, despite a 6.9 percent drop in the number of motorists using the toll road. It credited the positive performance to an 11 percent toll hike in January and the cancellation of the discount previously given to transponder users.Relevant excerpts from the Transurban contract are available in a 260k PDF file at the source link below.Source: Comprehensive Agreement Relating to Route 495 HOT Lanes - Excerpts (Virginia Department of Transportation and Capital Beltway Express, 12/19/2007)Permanent Link for this item

Wednesday, July 2, 2008

TTC: Dead or Alive?

Is the Trans Texas Corridor dead?

Don’t break out the champagne too early. There is a lot of talk about the "death" of the Trans Texas Corridor. Talk is cheap.
Austin insiders say it’s dead because the unpopular project is too much of a liability for the Governor as he anticipates another campaign. Other’s say its dead because the Transportation Commission issued a rather limp promise not to do a lot of things they never planned to do in the first place, or that revenue projections no longer justify. The June 2nd "Burka Blog" cites the legitimate complaints of urban mayors about the controversial "market valuation" concept as the final straw. Congressman Ron Paul sent a constituent letter about the end of the NAFTA highway, crediting citizen outcry. (What about the citizen outcry in 2006, objecting to TTC-35, also referred to as the NAFTA highway? Better revenue projections?)
Critics are skeptical. And as I read the TxDOT press release in which Chairman Delisi refers to "a parallel corridor to I-35 and the long-awaited I-69", I am skeptical, too. That skepticism seems justified when TxDOT turned around and chose a proposer for the Corridor project south of Refugio County at their very next Commission meeting.
The tide is turning. But it will take more than public relations driven "principles" issued by TxDOT. The 2009 Legislature will have to put some law behind TxDOT’s empty promises. It is the Legislature who will put the final nails in the Corridor coffin. It is the Legislature who can mandate that TxDOT return to road building and stop lobbying, stop policy-making and stop developing their own independent revenue streams.
"Vote early, vote often". This election-season joke should be the theme for the next Legislative session. Our Senators and Representatives will have to pass bills limiting TxDOT and their love for public private partnerships early in the session, and unite against the predictable vetoes. Pass the private property rights protection bill early enough in the session to make it veto-proof.
In the meantime, the grassroots activists, the citizens of Texas, and the consumers who ultimately pay for every infrastructure decision made in Austin, must continue to speak out about the Corridor project.
TxDOT may have conceded the TTC/I-69 foot print, but they have not conceded the Corridor concept. As long as the broad authorities granted in the original HB3588 remain on the books, a Corridor is lurking in the shadows. As long as the law allows for a 1200 foot wide, multi-modal, private property devouring, auto/truck/train/utility/hotel-motel/food chain/gas station, Public Private Partnership nightmare, TxDOT will continue to plan for its development, and court private partners.

Agenda Posted for Sunset Advisory Commission Hearing on TxDOT

CorridorWatch members:

The Sunset Advisory Commission has just released the agenda for the July 15, 2008 meeting, which includes a public hearing on the Texas Department of Transportation. You can view the agenda at:

At the bottom of the agenda is advice if you wish to speak at the hearing. You will have to fill out a speaker's form. This is standard for the public hearing portion of all such committee/commission meetings. If you prepare written testimony be sure to provide additional copies. Having written testimony is a great idea. If the meeting runs very long and you have to leave before it is over, you can simply leave your written comments.

You may also want to consider making a few extra copies for any reporters or staff members who may ask for a copy of your comments.

As with all the hearings, you will probably only have 2 -3 mintues to speak. The commission is interested in your concerns about TxDOT in general. The commission Staff Report is available on our website, and the CorridorWatch response is available, too. Reading through those may help you prepare your remarks, and make the most out of your short time.

If the hearing room is full, there will be overflow rooms with closed circuit tv, so that you can watch the hearing. You will be able to hear your name called for speaking from the overflow room, and then make your way to the main hearing room.

Your attendance is important. If you choose not to speak, your presence will have an impact.

David and I will be there, and we look forward to seeing as many of you as possible!!