The department, in a
response included in the 73-page audit, agreed
with most of the auditors' observations and
recommendations. But the department defended its
decision to withhold for more than a year
portions of its contract with corridor developer
Cintra-Zachry. And
it said the auditor was wrong to conclude that
the contract commits the department to guarantee
Cintra-Zachry a 12
percent rate of return on what it spends
building a 300-mile toll road alternative to
Interstate 35.
"The 12 percent was
merely a modeling assumption," the agency's
response says.
The state plans to
delete language about a "12 percent guaranteed
return on equity" now in the master development
plan, the audit says.
The report also says
the $3 billion in payments from the developer
that the state expects to get could be reduced
to nothing if interest rates and inflation are
higher than expected. The agency in its response
did not address that assertion.
Austin state Sen.
Kirk Watson, a Democrat who serves on the Senate
Transportation and Homeland Security Committee,
in a statement said the audit should put the
brakes on the corridor project pending further
study.
"Texas cannot rush
into a project that will help define our future
when there are so many uncertainties about the
present." Watson said. "We must step back,
demand answers, and (ensure) the public is
protected before work proceeds on the
Trans-Texas Corridor."
The Trans-Texas
Corridor was proposed in 2002 by Gov. Rick Perry
as a 4,000-mile network of tollways, railroads
and utility corridors roughly paralleling
existing interstate highways in Texas. The
department in late 2004 announced that it had
selected Cintra-Zachry
to create a master plan for developing the first
and most-needed of those corridors, the twin to
I-35.
The department and
Cintra-Zachry in
March 2005 reached a $3.5 million agreement for
the partnership to create a plan, and the agency
released much of the contract. But the agency
said release of certain sections was not
required until the actual plan was complete, an
assertion that Texas Attorney General Greg
Abbott's office disputed. Perry's gubernatorial
opponents seized the opportunity to criticize.
The rest of the
contract was released last fall when the master
plan was completed.
The audit said "it
is important that the Department makes all
documents, plans, and contracts related to the
project public in a timely manner." The audit
did not define "timely." Even so, the agency
remained defiant about its decision to keep the
information confidential temporarily.
"Providing
information prior to approval (of the plan)
could jeopardize competition during the
procurement process," the agency said in its
audit response.
