Tuesday, August 1, 2017

A Track Record of Toll Road Failures at Taxpayers Expense: Putting Wall Street Over Main Street

By Terri Hall l July 24, 2017

The defunct SH 130 tollway has emerged from bankruptcy court and the news isn’t good for taxpayers.

In 2007, the Texas Department of Transportation (TxDOT) entered into a Comprehensive Development Agreement, or public-private partnership, with SH 130 Concession Company, a subsidiary of Spain-based Cintra and Zachry Toll Road 56, which had ownership dispersed among Australian and many other foreign entities. The 41-mile southern stretch of SH 130 opened in November 2012, designed to be a bypass around congested downtown Austin. But the traffic never materialized and the private concession company sought bankruptcy protection in March 2016. According to the terms that emerged from bankruptcy court, all of the private entity’s $1.4 billion debt was wiped away, leaving federal taxpayers left holding the bag for the $430 million federally-backed Transportation Infrastructure Finance and Innovation Act (TIFIA) loan given to the private entities.

Texas taxpayers feel betrayed. Former Texas Transportation Commission Chairman Ric Williamson swore under oath before the Senate Transportation Committee on March 1, 2007, that if the private entities went bankrupt, the Texas taxpayers would get the road back free and clear of any debt. Free and clear means no debt obligations, and therefore no need to continue to charge tolls for usage.

However, that didn’t happen. Instead, new owners were brought in, Strategic Value Partners, $260 million in new debt was issued, and the new private company will continue to charge tolls until the contract is up in 2062 — for a road that now owes virtually no debt compared to its original $1.4 billion........To Read More....

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