NTTA Takes $5 Billion Tollway From Cintra - NCTCOG regret at not mentioning that Price Waterhouse Cooper worked for Cintra on TTC Bid

"Eastland said that he regretted that he had not mentioned that Price Waterhouse Cooper had worked for Cintra on the Trans-Texas Corridor."
by Richard Williamson - The Bond Buyer - June 19, 2007 Copyright 2007

DALLAS — In a dramatic reversal, the North Texas Regional Transportation Council yesterday handed a $5 billion toll project to the North Texas Tollway Authority less than four months after it originally selected private development team Cintra/ JPMorgan.

The vote must be seconded by the Texas Transportation Commission, which had already approved Cintra’s bid in February — before the competition with the NTTA.

Despite the NTTA’s late-entry to the bidding, top officials said the authority could quickly catch up to Cintra’s plans for completion of the road by 2010.

“We’ve already commenced work to ensure on-time delivery,” said NTTA executive director Jerry Hiebert. “We’re certain NTTA will be on time for the financial close.”

The battle between the NTTA and Cintra was set up in March, just days after the 23-mile tollway in Denton and Collin counties north of Dallas was awarded to Cintra. Cintra emerged as the favored bidder after three years of developing its proposal.

By contrast, the NTTA developed its 800-page proposal in less than a month after state Sen. John Carona, R-Dallas, persuaded the RTC and Texas Department of Transportation to reopen the bidding to the toll authority, a division of the state.

While the NTTA proposal appeared to trump Cintra’s bid by about $100 million, analysis by TxDOT and the auditing firm of Price Waterhouse Coopers showed that Cintra’s proposal netted out as the better value due to a variety of factors.

In its presentation to the RTC board Thursday, NTTA board chairman Paul Wageman and Hiebert sweetened their original offer of $2.5 billion in an up-front payment and $833 million over the life of the project. At the board’s request, the NTTA would make the entire $3.3 billion payment for the project up-front, they said.

The authority, which operates 64 miles of toll roads in the Dallas-Fort Worth area, has complained of unfair treatment of its proposal and of conflicts of interest involving Price Waterhouse Coopers. After PWC issued its report favoring Cintra, it was revealed that the firm was working as auditor for Cintra, the Spanish developer whose full name is Cintra, Concessiones Infraestructuras de Transporte.
PWC and Cintra claimed that there was no conflict because the PWC auditors in Spain were a separate team from those who conducted the analysis for the RTC.
But Wageman disagreed, pointing to the fact that PWC also worked with Cintra and its partner Zachary Construction of San Antonio on development of the Trans-Texas Corridor, a proposed network of tollways in Central Texas whose final cost could reach $150 billion.

“How can Price Waterhouse Coopers possibly be unbiased and fair in evaluating its partner’s proposal against a competitor’s?” Wageman asked.

The NTTA originally passed up the SH 121 project when the 23-mile toll project was under discussion for financing in 2004, according to TxDOT. Cintra was one of the private developers that responded to financing proposals.

The NTTA has acknowledged comments from the three rating agencies that its credit rating will likely fall as it more than doubles its debt to build SH 121. But officials say they can stay within an A-range.

“We’re going to see a decrease in our credit rating,” Hiebert said. “But the inverse of that would be to just take our money and sit on it.”

Under a protocol agreement with TxDOT and Cintra last year, the NTTA was designated the toll collector and operator for the SH 121 project while Cintra was in charge of construction and financing.

Asked at Thursday’s RTC meeting why the authority earlier had ceded the project to Cintra, Wageman pointed to legislation favoring comprehensive development agreements with private developers in order to preserve bonding authority for government entities. That position was reversed last week with Gov. Rick Perry’s signing of SB 792, which gives toll authorities first shot at projects in their regions.
“We thought the better part of valor was to step back and accept a process that SB 792 has now extinguished,” Wageman said. “This has been an imperfect process.”

Mike Eastland, executive director of the RTC, said at yesterday’s meeting that PWC was the only viable contender to accomplish the analysis of the bidders in a short period time.
Eastland said that he regretted that he had not mentioned that PWC had worked for Cintra on the Trans-Texas Corridor. “We made a mistake,” he said. “We admit the mistake, but I do not think it is material.

© 2007 The Bond Buyer:

A cliff hanger in DFW -- suspense, intrigue, deceit and a final vote for the hometown guys on SH121

By Faith Chatham - Wed Jun 20, 2007

The NCTCOG SH 121 workshop on Thursday and the RTC meeting Monday were long and tense. The Monday meeting to vote on awarding the Contract on SH121 ran over two hours longer than orginally scheduled. Until the last 15 or 20 minutes of the meeting, I felt that the vote would probably go to Cintra. During both days, I never heard aggressive or hostile questioning of Cintra, but many members of the RTC questioned (and/or preached) to NTTA so aggressively that it seemed hostile.

Read blow by blow analysis of the the vote to let SH 121.

Citizen's observations of Thursday June 14 RTC meeting and presentations by NTTA and CINTRA

Lauri Wiss of Dallas submitted these comments to the NCTCOG RTC by e-mail following her attendence at the May 14th RTC "Workshop on SH121"

I attended the June 14 RTC Public Meeting.
I heard no mention of either the NTAA nor Cintra bid presentation regading repaying the taxpayers of the DFW region for money already expended for the SH 121 right of way.

I also heard no mention if the NTCOG or RTC will need to repay those funds to other entities.
I was shocked ethics and conflict of interests were not addressed in a knowledgeable way. · It seemed amazing that legal opinion is needed less than 4 days before a major decision is made for the region.

· Being a member of the NASCO or NTAA Board to me means a member should recluse themselves in the vote.

· I do not believe a vote should be taken prior to all 40 members filling out the necessary ethic and conflict of interest forms and putting them on the internet.

· The City Councils and the public have the right to know what Boards and Commissions a member holds office in or serves on the Board of Directors, what businesses they and their family own, as well as stocks relating to contracts let out for bid.

I was also amazed at the deceit in the numbers in the Cintra slide presentation.

· The answers to the questions asked and answered by both Cintra and Price Waterhouse should have been reflected in the slide presentation.

· Phony numbers are not something to rely on.
· If the numbers presented at this late date cannot be counted on, why should any future numbers be trusted?

· In the Cintra presentation, interoperability (a pass through) was presented as income.

· Federal taxes were presented in the slideshow as income, and the mysterious 20-30 billion dollar "future development" is not a tangible return, especially when Mr. Munos DID NOT AGREE to commit to future projects.
The PriceWaterHouseCooper speaker when asked about it by a Board member said "it is a wash" between the two bidders.
· Most importantly, the multiplier rate stated ($ 1:3) was not backed up with facts.
· This is especially true as most multiplier effects depend on the money remaining in the local economy .
· With the money simply collected then sent to other US states and overseas, the multiplier effect lessens because loan funds are not as available.

· The number of jobs provided was not broken out on whether the jobs would be spread over the lifetime of the contract or in the immediate future.


The NTAA presentation was short on substance. There was nothing that was said that seemed firm enough to make a decision on. I recognize that they did not have a lot of time to prepare, but their statement "that we will not seek federal funds today" reminded me of the Dart pledge

· I am concerned about the raising of tolls on other roadways and possible lessening of maintenance to build SH 121.

· I am concerned on whether the NTAA is using the highest construction standards, not the lowest.

· I liked the NTAA bid better because local accountability will be possible, there will be federal laws followed, and the books will be audited every three months.

I have the following questions:

· Will the NTAA bid lower the rate of toll increases or
will the the same .145 to 58 be in place?

· Why would a business move to Dallas or Tarrant County if businesses and employees will have to devote a significant portion of transportation dollars to toll costs?
Is there a commitment in the contract that a certain percentage of the money remain in the banks locally for loans?