*Availability Payments* for Texas Toll Roads- Lipstick on a Pig? Somervell County Salon-Glen Rose, Rainbow, Nemo, Glass....Texas


 

*Availability Payments* for Texas Toll Roads- Lipstick on a Pig?
 


13 August 2007 at 12:58:59 PM
salon

So, let's see. The Texas Lege (except for a bunch of exceptions, including the Trans-Texas Corridor) did away with the concessions for private entities, such as Cintra, that build and lease toll roads. What can the Po Po TxDOT do to get around that? Ric Williamson knows. Change the way the concessions are called by saying they're *availability payments* that just happen to look like concessions. Who'll know if TxDOT has its way?

Availability payments — you gotta love the perfect bureaucratic inscrutability of that name — are an attempt to split the difference between government-run tollways and the privately financed and operated toll roads that had the public and Legislature steamed up earlier this year. In theory, it would be a best-of-both-worlds thing, tapping the private investment sector's purportedly bounteous piggy bank while leaving full ownership and operation of tollways in public hands.

In theory, this would stand in contrast to concessions. With those, a private entity (like Cintra-Zachry, which is building the next 40 miles of the Texas 130 tollway) gets a long-term lease from the government to finance, build and operate a tollway, including the right to set the tolls (within contractual limitations). Concessions can be accompanied by upfront payments to the government, money that can be used for other transportation projects.

The Legislature said it didn't like concessions and put a two-year moratorium on them, although the promise of those upfront payments and quickly getting critically needed roads built moved lawmakers to allow about a dozen exceptions across the state.

How would availability payments work? The private entity (probably some sort of consortium) would use its own money to design, build and maybe even maintain the road. In return, its contract with the state or a local toll authority might guarantee minimum and maximum payments.

The size of those periodic payments would be based on how well the toll road performs, fluctuating based on the money "available." Thus, the name.

But here's the kicker. Or shall I call it "The Scam"

There could, of course, be endless variations on this theme, limited only by the seemingly limitless capacity of financial experts to structure deals. The private entity, for instance, could instead get a percentage of toll revenue, Transportation Commission Chairman Ric Williamson said last week. But that starts to look uncomfortably similar to a concession, and one imagines that a percentage partner would want some contractual say in toll rates.

Williamson said an availability payment scenario could even include the beloved upfront payments


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