State Highway 121 Project Agreement Completed

By Sam Lopez nnd Lara Rodriguez - NTTA & NCTCOG - Aug. 23, 2007
North Texas – In the true spirit of teamwork, representatives from the Dallas District of the Texas Department of Transportation (TxDOT) and the North Texas Tollway Authority (NTTA) have finalized a historic project agreement. The NTTA will develop, finance, design, construct, maintain and operate State Highway (SH) 121 from McKinney to Coppell for the next 50 years. Staff representatives of the Regional Transportation Council (RTC) participated in the negotiation of the major terms of the project agreement and quantified the anticipated public benefit.

Today, the Texas Transportation Commission (TTC) approved a Minute Order authorizing TxDOT’s Executive Director to enter into the project agreement with the NTTA, subject to environmental clearance of Segments 1 through 4 of the SH 121 toll project. That clearance is expected in September 2007.

The SH 121 project agreement has now been signed by Jorge C. Figueredo, NTTA Executive Director, and submitted to TXDOT. When TxDOT’s Executive Director signs the agreement, the NTTA will then have 45 days to achieve the “financial close” and to deliver a $2.5 billion upfront payment to TxDOT. An additional $833 million upfront payment, representing the current value of 49 future annual payments, will be made at TxDOT’s direction to the RTC for regional transportation projects. The RTC has already received proposals from cities and counties and will decide how the $3.3 billion will be used for additional mobility projects throughout North Texas.

“We are nearing the final execution of SH 121 project agreement and I thank all of our partners who have worked tirelessly and expeditiously to complete it,” said Paul N. Wageman, Chairman of the NTTA Board of Directors. “The NTTA looks forward to delivering the upfront payment to TxDOT and the RTC in the near future. The real work begins when our team of designers and contractors complete this critical roadway for Collin, Dallas and Denton counties.”

“The motor fuel tax can no longer keep up with the growth we are experiencing in North Texas and falls short of meeting our transportation needs. TxDOT has a plan to make up the financial shortfall and it involves doing exactly what occurred on SH 121. This included seeking innovative solutions, working with partners like the NTTA and empowering local communities and the RTC to help fill the transportation funding gap," said Bill Hale, P.E., District Engineer, Dallas District of the Texas Department of Transportation.

“This region, like the rest of the nation, is facing a tremendous shortfall in transportation funding,” said Michael Morris, director of transportation of the NCTCOG. “This agreement with NTTA will mean freeway, thoroughfare, passenger rail and air quality projects can be built years ahead of schedule. Keeping up with the tremendous growth and transportation needs of the region is a high priority.”

On June 28, the TTC, the Board that oversees TxDOT, instructed the NTTA and TxDOT staff, in cooperation with the RTC, to prepare a project agreement term sheet within 60 days. The three partners worked diligently to meet the demanding schedule.

The SH 121 toll project is a 25.9 mile all-electronic toll road through Collin, Dallas and Denton counties from McKinney where SH 121 intersects with U.S. 75 west to near the Tarrant County line. Segments 1 and 2 run east from 0.23 miles east of Business 121 to the ramp pair on the east side of the Hillcrest Road overpass. Segment 3 runs east from the ramp pair on the east side of the Hillcrest Road overpass to the ramp pair on the west side of the Watters Road overpass. Segment 4 is the ramp pair on the west side of the Watters Road overpass through the north, east, and south limits of the construction required to complete the U.S. 75/SH 121 Interchange. Segment 5 is the Dallas North Tollway interchange.

NTTA gets OK for 121 toll project

State board must still approve deal
By MICHAEL A. LINDENBERGER and JAKE BATSELL - The Dallas Morning News - Tuesday, June 19, 2007

The North Texas Tollway Authority won the strong support Monday of local officials charged with deciding who will build the lucrative but controversial State Highway 121 project.

The Regional Transportation Council voted 27-10 to recommend that the state reverse course and award the contract to the tollway authority – and not to the Spanish construction firm Cintra.

The decision marks a reversal from last winter when the Texas Department of Transportation had tentatively awarded the contract to Cintra, which had beat two other private bidders with a promise to pay the state government nearly $3 billion for the right to collect tolls on the 26-mile road for the next 50 years.

"It's probably been the toughest decision that I've had to make in the 10 years I have been on this committee," Tarrant County Judge Glen Whitley said just before casting his vote for NTTA.

Mr. Whitley said the authority's bid promised even more up-front money to the state than Cintra.

"If we go with Cintra, we do leave money on the table," he said. "We leave money on the table up front, we leave it on the table in the payments over the 50 years. ... So, sure it is a risk, but this the crown jewel of toll projects in the state, and maybe even in the country."

The Texas Transportation Commission is expected to render a final decision on the project at its June 28 meeting in Austin.

Over the last two weeks, Cintra had tried again and again to underscore the risks it said were inherent in the NTTA bid. The authority offered more money up front, Cintra said, but it did so at a risk of increased toll rates in the future if traffic volume forecasts are not met.

Many of those casting the 10 votes in favor of Cintra seized on those arguments, and on analyses by the Texas Department of Transportation and global accounting firm Price Waterhouse Coopers that reached similar conclusions.

"We cannot gamble on this," Denton County Commissioner Cynthia White said. "We have to go with what is a for-sure deal. Cintra comes out ahead against NTTA, and that is the cold hard facts. Theirs is the only proposal that guarantees a [financial] return to the region at the end of the contract."

NTTA chairman Paul Wageman had countered earlier in the day, however, that council members should go with the bid by the entity they know best, and with the project that paid the biggest amount of money up front.

"In the end, I think it was that our proposal was a superior financial deal, and because of our track record in this region,"

a smiling Mr. Wageman said after the vote.

Jose Lopez, the president of Cintra's North American operations, said the bidding process was fair. But he said his company's proposal was clearly better.

"We will just have to wait and see what the TxDOT commissioners have to say, since they are the ones that have the final say," Mr. Lopez said. "We respect the decision by the RTC, but we still are certain that our proposal was better, way better, for the region."
The Texas Transportation Commission's five members, all appointed by Gov. Rick Perry, are not bound by Monday's vote.

That worries state Sen. Florence Shapiro, R-Plano, who attended Monday's vote.

Ms. Shapiro noted that the two Transportation Department's representatives on the Regional Transportation Council voted in favor of Cintra's bid. Last week, TxDOT's chief financial officer said his department would recommend Cintra for the contract – if commission members asked for an opinion.

"That's probably pretty indicative of what they're going to do on the 28th," Ms. Shapiro said. "I am very concerned about it and intend to be there to listen and to watch and to see how it's handled.
"The commitment that ... [Texas Transportation Commission members] made – and I heard it with my own ears – was that whatever the region decided was what they would move forward with. This was overwhelming, 27-10, and I think that is a very strong message to take to TxDOT."

Bill Hale, one of two TxDOT employees on the council, said he expects Texas Transportation Commission Chairman Ric Williamson to give great weight to Monday's vote.

"That's what he has said in the past they intend to do," said Mr. Hale, the top engineer on TxDOT's Dallas-area staff.

Mr. Hale, who voted in favor of awarding the contract to Cintra, said he will now support NTTA's involvement in the project.

Ms. Shapiro's concern reflects the mood of many state lawmakers.

The transportation commission gave Cintra preliminary approval for the Highway 121 contract in February. Immediately, lawmakers reacted angrily to the prospect of signing a lease with a foreign company to operate toll roads that will span generations. And they quickly pressured the RTC to invite the NTTA to submit a bid, paving the way for a rival to Cintra.

"It is exactly what I had hoped would happen," Ms. Shapiro said. "We gave them the opportunity today, but they had to perform and they had to produce. And they did."
Fort Worth City Council member Wendy Davis said that if the contract ends up with NTTA, North Texas may lose out on private investment in the future.

"What we are going to do today is not just going to impact our decision on Highway 121, but I can assure you that it will impact our ability to attract private businesses in the future," she said. "If I was Cintra, I would learn a valuable lesson. And that lesson is that no matter how many steps are put in place to make sure the process is fair, the deck is going to be dealt in such a way that favors" a public entity such as NTTA.

Still, Richardson City Council member John Murphy, who voted for NTTA, encouraged his colleagues to feel good about the vote, no matter which side they favored.

"This is about the future and the future has changed for us," Mr. Murphy said. "Not long ago we were at a point where we were saying, 'Oh my gosh, where are we going to get the money to build roads?' Now, we're saying instead, 'Show us the money.' "