Slower I-35 helps TxDOT in tollway deal
State agency says limits based on traffic volume, not economics.
ASSOCIATED PRESS
Tuesday, November 06, 2007

The state's deal with private contractors to build and operate a toll
road from Austin to Seguin would reward the state for lowering the
speed limit on Interstate 35.

The state's privatization contract with Cintra-Zachry for the 40-mile
stretch of Texas 130, which will run parallel to I-35, includes the
option for the state to lower the amount of money that it could have
to pay the toll operator in the future by taking measures to push
traffic from free state roads to Texas 130. That includes by lowering
I-35 speed limits, the San Antonio Express-News reported Monday.

But a spokeswoman for the Texas Department of Transportation said the
agency won't do that, even for financial gain.

"We don't expect to be reducing speed limits on I-35," spokeswoman
Gaby Garcia said. "They are set by traffic engineering studies and not
by economic gain."

If that is the case, Garcia was asked, why include the provision in
the contract at all. And given that I-35 is exempted from other so-
called "noncompete" provisions in the contract - the state is free to
expand the interstate as it parallels the Cintra-Zachry portion of
Texas 130 - why even mention I-35 speed limits in the contract?

The Transportation Department in a statement issued Monday by Garcia
said the contract covered " 'what if' situations."

"With the population growth and resulting transportation demand, we
were covering our bases to ensure taxpayers get the fairest deal," the
statement said. "We were considering what impacts traffic volume may
have on existing and future roadways. The reference in the contract in
no way requires any adjustment in speed limits and does not bind TxDOT
to make any such changes, unless it is necessary due to traffic
volumes."

The agency did not address why I-35 speed limits became part of the
compensation discussions.

The state signed the Texas 130 deal in March with a consortium made up
of Cintra of Spain and Zachry Construction Corp. of San Antonio.

Under the deal, Cintra-Zachry will finance, build and operate the $1.3
billion tollway in the hope of eventually turning a profit.

The company expects to start construction in the next two years and
open the road in 2012.

The contract includes a provision that the Transportation Department
would pay Cintra-Zachry for lost profit if some state projects
interfere with Texas 130 toll traffic in the next 50 years.

For example, the state would be penalized for widening or building
competing roads, other than I-35.

Critics fear the deal will result in interference with regular traffic
on I-35.

"Our highways are being hijacked for private interests," said Terri
Hall of Texans Uniting for Reform and Freedom. "Who's going to rein in
this agency? It just baffles me."

Garcia said that speed limits are not arbitrarily set and that the
department changes speed limits after studying motorists' driving
patterns and safety conditions.

The contract requires the department to pay Cintra-Zachry for any toll
losses if the speed limit on I-35 is increased.

Conversely, the private company would have to pay the Transportation
Department more for higher speed limits on the toll road.

Cintra-Zachry will pay the department $25 million upfront if the limit
is set at 70 mph but will increase that to $92 million for 80 mph and
$125 million for 85 mph, according to the contract.

The department could instead choose to take a bigger portion of the
profits.