State seeks partnership for Grand Parkway
A recent law gave the Texas Department of Transportation the go-ahead to explore using public-private partnership agreements to accelerate development of the Grand Parkway and other projects.
SB 1420, which continues and modifies the state transportation agency beyond its scheduled demise later this year, revives public-private agreements as a way to develop and maintain specified highway projects as tolled roads. The agreements could be applied to design, construction and potential financing, operation and maintenance.
TxDOT is seeking ideas from stakeholders and private firms on how the agreements might help deliver the Grand Parkway and a managed-lane project in Dallas as quickly as possible. Its "requests for information" on the two projects were issued June 10.
"The general concept behind this public-private agreement is that a private entity will basically take some of the risk and put their money in it," Harris County Judge Ed Emmett said.
He acknowledged that the concept "got a bad name" when it was applied to the Trans-Texas Corridor but said it has been used successfully all over the world, including in Texas.
"The idea behind the legislation, and Sen. Tommy Williams of The Woodlands was instrumental in it, is to have companies present creative ideas about what they would do to help TxDOT build these roads more quickly," Emmett said. "Clearly, after this legislative session the state doesn't have the money to do some of these things, but the key is the state is maintaining control of this."
In addition to the parkway, SB 1420 authorizes TXDOT to use the public-private partnerships, also called comprehensive development agreements, to develop Texas 249, U.S. 290, Texas 288 and seven other specified projects in the state. Except for the parkway, that authority expires for projects that fail to obtain environmental clearance by August 2012.
The Grand Parkway, or Texas 99, is a proposed 180-mile outer loop highway around the Greater Houston area that traverses seven counties.
It is divided into 11 segments, designated A through I-2, two of which are open, including Segment D from U.S. 59 to Interstate 10 and Segment I-2 from SH 146 to I-10 East. Tolling is expected to begin on Segment I-2 this fall.
According to its request for information, TxDOT is exploring a potential partnership to cover maintenance and operations for portions of Segments D, G (I-45 N. to U.S. 59 N.) and I-2 and all of segments E (I-10 W. to U.S. 290), F-1 (U.S. 290 to Texas 249) and F-2 (Texas 249 to I-45 N.) and to cover financing, development, construction, operation and maintenance for Segments F-1 and F-2 and all or part of Segment G. The segments total about 70 miles of the 180-mile project.
The process will examine using a full concession agreement, a design-build or design-bid-build agreement using tax-exempt toll revenue bonds or an availability payment structure that reimburses a developer for capital costs, operating and maintenance costs and financing to build the roadway, with a return on equity. Reimbursements would be from toll revenue and potentially from state highway funds, with restrictions.
TxDOT's deadline to receive ideas for the Grand Parkway is July 6. It's tentative time line for the process indicates requests for qualifications and proposals could follow through the summer and fall, and conditional award of an agreement could be made in a year.
Contact TxDOT's Government & Public Affairs Division at 512-463-8700 or visit www.dot.state.tx.us/business/partnerships/rfi.htm for information.