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Texas Hold ‘Em: Will the State Go “All In” on Public Private Partnerships and Lose $2 Billion?

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In January of 2007 the Texas Department of Transportation (“TxDOT”) received bids for a to-be-built toll road in the Dallas area. The winning bidder was Cintra, who was also part of the winning bids for the Chicago Skyway and Indiana Toll Road Public Private Partnership (“P3”) concession deals done in 2005 and 2006 respectively. TxDOT decided to exclude the regional public toll road authority – North Texas Tollway Authority (“NTTA”) – from bidding for the concession even though the proposed roadway directly intersected with an existing NTTA toll road. This exclusion from bidding resulted in the Texas Senate Transportation Committee, chaired by Senator John Carona, to hold hearings and obtain testimony concerning the public monetization option and how that compares to the P3 option. As a result of these hearings legislation was proposed to create a 2-year moratorium on P3 concessions in Texas where they are known as CDA’s (Comprehensive Development Agreements). The State Senate panel also asked the public authority, NTTA, what it could pay for the concession rights. The response from NTTA indicated that it would provide a price worth billions of dollars more than the Cintra bid.