2004.09.09

The Camino Colombia Toll Road (CCTR) in Laredo began operations Sept 8 as a state owned road. No tolls are being collected until Nov 8 when a $2 toll for cars and $2/axle toll will be collected for use of the 35km (22 mile) road - which provides a stright shot between I-35 and the Colombia-Solidarity Bridge to Mexico. Texas DOT paid $20m for the pike in May. It had been sold for $12m in a bankruptcy sale at the Laredo Court House Jan 6, 2004.

$90m was spent by investors to build the road, a mix of 2x2 lane and 2-lane road which opened Oct 18 2000. Local businessman and landowner Carlos Y Benavides III and neighboring property owners put up about $15m of their own money and land, and John Hancock insurance and New York Life insurance put up $75m in loans.

They grossly overestimated the competitiveness of their route versus competing city toll bridges closer in to Laredo.

The CCTR's tolls of $16/tractor-trailer attracted less than 100 rigs/day compared to 1,500/day in forecasts by URS. Toll revenues were about $0.5m/year versus $9m projected, barely covering operating costs. There was no prospect for any debt service.

The investors were banking on exclusive hazmat traffic through the tollroad which bypasses the builtup area of Laredo to the north, leading to the Colombia-Solidarity Bridge known as Bridge 3. They were also counting on US implementation of its obligations under NAFTA that would allow through-trucking between the US and Mexico with the same driver and tractor taking the most direct route between shipping points deep in Mexico and US destinations. But the old drayage system remains in effect at the border - in which Mexican tractors and drivers deliver trailers to the border, and US tractors and drivers pick up the tractors after drayage between customs agents on either side. The customs agents and yards are clustered closer in to Laredo and more convenient to the city of Laredo's World Trade Bridge (Bridge 4).

Also part of the CCTR fiasco was that City of Laredo interests managed - after the CCTR was in construction - to negotiate with the Texas and US governments unexpectedly good new connections for Bridge 4 to I-35 with a high level interchange and freeway spurs (Loop 20) built at taxpayer expense. Instead of heavy congestion on the untolled route there is free flowing traffic and scant reason for trucks to go north to pay tolls. Bridge 4 which opened around the time of the tollroad has drawn the vast bulk of the truck traffic in the region, whereas URS forecasts were that the Colombia-Soliarity Bridge 3 at the end of the tollroad would maintain most of its traffic. In fact traffic at Bridge 3, feeding the tollroad, has dropped drastically.

The pike was never able to service its debt to the two insurance companies and they moved to foreclose on it late last year. Hancock bought the pike property for $12m at the courthouse sale but it was always clear this was a temporary ownership. TxDOT had bid $11m, the maximum it had been authorized at the time. The $20m purchase in May was negotiated.

Tractor-trailer tolls will be $10 versus $16 under private ownership. Connections on the Mexican side of the border are being improved which should help a bit. But traffic seems certain to continue light, and revenues barely sufficient to cover operations costs, until there are major structural changes in border crossing conditions. TOLLROADSnews 2004-09-09