Home > ShortCuts > Archives > 2009 > October > 07 > Entry
TxDOT on hook for $1.2 billion? Not so much
Gov. Rick Perry has always had political luck in terms of his opponents. For instance, Hank Gilbert, who would like to be the Democratic candidate for governor next year.
Gilbert, a long-time opponent of Perry’s Trans-Texas Corridor road-and-rail plan, put out a press release today noting that the state has already been paid $1.2 billion by Cintra-Zachry and is now on the hook for that money because the corridor plan has been ditched. Which would be shocking and disturbing were it true. Only it’s not.
Cintra-Zachry has paid TxDOT $25 million, with an “m,” not $1.2 billion, and that was for the right to build and operate (and profit from) a road it is in fact busy building right now: the southern 40 miles of Texas 130.
Gilbert’s $1.2 billion figure comes from 2004, when the Interstate 35 leg of Perry’s corridor plan made a big splash. TxDOT had decided to award a development contract for a tollway twin of I-35 to Cintra-Zachry, a consortium led by Spanish toll road builder Cintra and San Antonio road contractor Zachry Construction Co. That contract involved Cintra-Zachry creating a development plan for the 300-plus mile road, and gave it first refusal rights on segments of the road up to $400 million.
The prediction then was, were Cintra-Zachry to build the whole thing, its concession payments to TxDOT (essentially paying TxDOT for the right to build sections of the road and then collect tolls on them) would amount to $1.2 billion.
That’s fine, except that only one of those sections, just those 40 miles, is going to be built. And the state and Cintra-Zachry signed a separate facilities agreement for that portion of the road, which is now actually just a part of Texas 130 tollway (49 miles built by TxDOT are already open) rather than a Trans-Texas Corridor road. TxDOT announced Tuesday that it would recommend to the Federal Highway Administration that no action be taken on the rest of the I-35 twin, effectively killing it.
In that facilities contract, Cintra-Zachry agreed to pay TxDOT $25 million (much less than in the earlier estimate that was part of that $1.2 billion figure) and then to give TxDOT between 4.7 percent and 9 percent of the revenue initially. It could even go to 50 percent later if the road has enough traffic.
Gilbert says the Cintra-Zachry contract with the state has all sorts of termination clauses and that it will take lawyers months to determinate what TxDOT might owe. That might be true, although Gilbert offered no specifics.
But the $1.2 billion paid by Cintra-Zachry earlier and now due to be paid back by TxDOT? No, that’s just not true.
One rule of politics: If you’re going to blast someone using figures, it’s best not to be off by that many zeros.
Permalink | Comments (12) | Post your comment Categories: TxDOT
Comments
Austinites love to be heard, and we're giving you a bullhorn. We just ask that you keep things civil. Leave out the personal attacks. Do not use profanity, ethnic or racial slurs, or take shots at anyone's sexual orientation or religion. If you can't be nice, we reserve the right to remove your material and ban users who violate our Visitor's agreement. Click here to report comment abuse.
By RedStateDem
October 7, 2009 10:43 AM | Link to this
hey Ben,
Flack for Perry much?
By jpt51
October 7, 2009 11:20 AM | Link to this
What’s true is that Zachry, with close connections to the Bush family, would be building all of the TTC if Perry had his way. Perry has made many back room deals to the detriment of taxpayers. The latest to make the headlines is the deplorable management in the food stamp program. We need a new governor.
By Trey McAtee
October 7, 2009 11:31 AM | Link to this
Ben, that’s precisely the problem. From the start, TXDOT has never been clear about contingent liability with regard to these CDA’s. In fact, they’ve released minor details only because of the threat of lawsuits. Still, we don’t know what’s out there. Gilbert’s number is based off the publicly available data.
What I find more interesting is that it’s a candidate for office actually taking the time to dig into this and not the press.
Specifics? How can Gilbert offer specifics when the state won’t release them? The one thing we do know is that TXDOT has never been clear about these CDA’s and what liabilities we face from them.
By Bob
October 7, 2009 11:41 AM | Link to this
RedStateDem, reporting the news isn’t flacking for Perry. Take your blinders off (you and all the right wingers who normally post this kind of tripe).
By GhettoMan
October 7, 2009 11:43 AM | Link to this
TxDOT is not on the hook. The taxpayers are on the hook. We always are!
By jimmy
October 7, 2009 12:52 PM | Link to this
Zachry + A&M + Perry = taxpayers $$$! There is a definite connection.
By RedStateDem
October 7, 2009 1:12 PM | Link to this
@Bob,
You should look up the definition of “flak”, I think. I “might” be a left-winger (really a moderate Dem) but certainly NOT a right-winger.
The author of this piece is pushing the “won’t cost that much to get out of this contract with Cintra-Zachry” in defense of Rick Perry’s bad judgment on this toll-road money pit. Pretending that taxpayers are not on the hook for hundreds of millions of dollars because he doesn’t understand the contract isn’t journalism…. it’s flaking. …
By todd
October 7, 2009 1:16 PM | Link to this
We should not be surprised about bogus numbers being thrown around by uninformed Perry opponents. The fact is that Texas has the best highway system in the country and Perry will be re-elected in 2010. Texas will continue to be the most prosperous state in the country.
By TxKat
October 7, 2009 1:47 PM | Link to this
iCaled this article for future hilarity.
TXDOT has already refuted Ware’s spin in part. Ben Ware an example of why I no longer pay to read the Statesman.
By Alan
October 7, 2009 1:57 PM | Link to this
Apparently, if you repeat a lie early and often enough, it is (perceived as) the truth. RedStateDem is just flacking for Gilbert.
By Eyeball
October 7, 2009 11:13 PM | Link to this
$25 million with an ‘m’ is still a lot of money. They throw these million dollar figures around like it’s just peanuts. That tells me they are out of touch and not frugal with our tax money. To me it’s $25 million down the drain. That’s enough money to put $50,000 into 500 kids pocket for college. And in this day and age of Texas paying out so much in unemployment benefits, that money would come in handy. Heck, I could use $25 hundred with a ‘h’ right about now.
By Eyeball
October 7, 2009 11:22 PM | Link to this
Obvioiusly Todd doesn’t live in one of the paths of the TTC, esle he would be so supported of the Governor. Perry would take his grandmother’s land against her will and sell it to some foreign business constituent for them to make a profit. Perry tries to take your land mid term and preaches about protecting our property rights during election time. He plays both sides. He needs to go. He puts his business constituents before the welfare of Texans, and to me that is his greatest downfall. What kinkd of Texan would do that to another Texan? One sorry Texan I would say. I do not like the selling off of parts of our Texas infrastructure to any private owner, but especially not to foreigners.