The planned $175-billion Trans-Texas Corridor could be a financial windfall for contractors worldwide.
Texas Gov. Rick Perry proposed the TCC in 2002 as a multi-use, statewide network of transportation routes that will incorporate existing and new highways, railways and utility rights-of-way. It will consist of nearly 4,000 miles of mostly toll lanes capable of carrying high-speed freight and commuter trains in addition to personal and commercial vehicles and will be built largely with private money.
In December, the Texas Transportation Commission selected the Spanish organization Cintra, an international group of engineering, construction and financial firms, and partner Zachry Construction Corporation of San Antonio to develop the Oklahoma-to-Mexico portion of the project.
The team was among three that presented proposals to the commission.
“We thought that they had brought the best value in their state proposal,” said Mike Bahrens, executive director of the Texas Department of Transportation. He said proposals were accepted on an international level.
The vast majority of those working on Cintra/Zachry’s TTC project — contractors, workers, suppliers and others — will be Texan.
“Our door is open for business,” Bahrens said. “We’re willing to listen to them and do business.”
Interstate 35 is NAFTA’s main transportation artery, linking Mexico with the United States and Canada, and will be part of the first phase of Cintra’s proposal. The consortium plans to develop $6 billion in new roadways parallel to the interstate by 2010. Work could begin immediately after right-of-way acquisition.
Cintra will also give the state $1.2 billion for additional transportation improvements between Oklahoma and Mexico and to extend the corridor into the Lower Rio Grande Valley.
The most unusual aspect of the TTC project is its private financing. The state would own the rights-of-way to the roads, but private contractors would pay to build them. Contractors could charge concessions such as tolls for as long as 50 years to earn back their investment.
“Each project will stand on its own merit,” Bahrens said. “Some may pay off earlier. Some may not generate as much as anticipated.”
Bahrens said most contractors would study the project and their options prior to submitting bids. It will likely take one year to work out agreements for individual sections of the corridor’s construction, he said.
The Perryman Group, an economic and financial analysis firm in Waco, Texas, estimates the average annual impact of construction activity associated with the TTC in the first 25 years to be more than $5 billion in total expenditures. It will also create more than 44,000 jobs in that area alone, with more than 176,000 expected in all industries affected.
“This is sort of the first of its kind [in the U.S.],” Bahrens said. Comparable construction projects in other countries have been financed in similar ways.
Ric Williamson, chairman of the Texas Transportation Commission and part of the five-person group that unanimously selected Cintra, said the project’s private funding would change how major transportation assets in the state are built and paid for.
“The private sector is willing and able to invest in transportation improvements,” Williamson said. “Without a doubt, the private sector is knocking at our door with a nearly incredible opportunity for Texas.”
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Patrick Beeson can be contacted at [email protected].
